Postnuptial and prenuptial agreements are becoming ever more popular. Guidance was provided from the Michigan Court of Appeals today for practitioners and laypersons contemplating entering into a postnuptial agreement. In Wright v Wright, 279 Mich App 291, 761 NW2d 443 (2008) decided on April 22, 2008, Plaintiff husband challenged the trial court's decision to void the postnuptial agreement. The court of appeals disagreed.
Here, both parties had consented the the agreement prepared by H's attorney. The couple was not separated at the time and had never separated during the marriage. H filed for divorce roughly eight months after defendant signed the agreement.
The court held that this particular agreement could not stand because under Michigan law, parties to a marriage may not enter into an enforceable contract that anticipates and encourages a future separation or divorce. The court stated:
"The postnuptial agreement left plaintiff in a much more favorable position to abandon the marriage. It protected his sizeable premarital assets and also any parital property for which he had provided at least 90% of the purchase price. The court said: "The contract plainly had, as one of its primary goals, defendant’s total divestment of all marital property in the event of a divorce."
The court distinguished its recent decision in Lentz v Lentz, 271 Mich App 465 (2006). Lentz dealt with a couple that had separated and wanted to divide marital assets in anticipation of their imminent divorce. Id. at 467, 473. The court went on to state:
The Court in Lentz specifically distinguished cases that involved postnuptial agreements that were not entered into by separated parties, and it specifically recognized that those cases met with much stricter legal scrutiny than postnuptial, post-separation agreements that essentially settled property issues arising in ongoing or imminent divorce litigation. Then the Court stated:
The higher scrutiny was applied to cases that involved the property rights in a spouse’s inheritance, and courts in those cases generally conditioned the enforceability of the provisions on a finding that each party, and the contract itself, expressed a desire to maintain the marital covenant. Therefore, the trial court did not clearly err by finding that the agreement contemplated and encouraged the separation and divorce of a married couple, and it correctly ruled that the agreement was void as against public policy.
You may read Wright v Wright here. Mr. Wright's application for leave to appeal in the Michigan Supreme Court was denied on July 18, 2008. His motion for reconsideration was denied on September 22, 2008.
Lentz v Lentz, a significant and published case, may be read here.