Michigan law divides postnuptial agreements into three categories. The requirements and enforceability of a postnuptial agreement depends upon its classification. First, postnuptial agreements that are entered by spouses who have separated will be upheld as settlement agreements. Second, postnuptial agreements that deal with inheritance rights are valid, provided the agreement is fair, equitable, and has consideration. However, the third category, postnuptial agreements that deal with divorce rights, entered by spouses who are not already separated, are unenforceable in Michigan.
As recently as 2008, Michigan courts declared unenforceable those postnuptial agreements that are entered before separation and deal with property distribution at divorce. In Wright v. Wright, the court reiterated Michigan’s prohibition on spouses entering contracts that anticipate or encourage a future separation or divorce. Such contracts were held to be against public policy, relying on case precedent from the nineteenth and early twentieth centuries.
Generally, alimony and property settlement provisions in postnuptial agreements are considered to anticipate or encourage future separation. As stated by the Wright Court, an example of when this occurs is if the postnuptial agreement leaves a spouse in a better position in the event of a future divorce. Under this theory, the postnuptial agreement at issue in Wright was held to encourage future separation or divorce. The agreement attempted to protect the husband’s premarital assets and retirement accounts. The agreement also declared all marital property that required substantial financial investment from the husband, including the marital home, was to be the sole property of the husband at divorce.
The primary issue appears to be whether separation or divorce is contemplated when spouses enter a postnuptial agreement. Michigan did uphold the validity of a postnuptial agreement at divorce, even though it was entered before the spouses separated and it did not deal solely with inheritance rights. In the 1965 case of Randford v. Yens, a divided court upheld the postnuptial agreement because it found the agreement did not anticipate or encourage divorce. The purpose of the postnuptial agreement in Randford was to determine what property rights already existed, not to change or define future property rights. Both spouses had substantial premarital property and a conflict arose as to the status of a particular piece of property. The postnuptial agreement was entered to eliminate confusion regarding what property was separate and what was marital.
While states across the nation are changing their public policy to reflect approval of postnuptial agreements, Michigan appears reluctant to change their long-standing public policy. While the Wright case was decided by the intermediate appellate branch of the Michigan judiciary, the state’s highest court declined to address the issue. The Supreme Court of Michigan denied the original appellate request and the request for reconsideration.
Originally, Michigan viewed prenuptial agreements as a way to circumvent the legal duty to support a spouse; a view the court still holds regarding postnuptial agreements. Michigan’s support of prenuptial agreements is not likely to influence the courts’ view on postnuptial agreements in the near future. The public policy considerations that allow prenuptial agreements to be enforceable are not easily applicable to postnuptial agreements.
When Michigan changed its view on prenuptial agreements, it was for two main reasons, according to Rinvelt v. Rinvelt. The court stated that without the ability to organize finances prior to marriage, people would choose to stay in informal relationships rather than get married. Additionally, the court reasoned that dealing with finances prior to marriage would foster permanency of the marriage. These viewpoints would be hard to attach to postnuptial agreements.
Without a major change in public policy or the legislature providing for postnuptial agreements by statute, a change in enforceability of postnuptial agreements in Michigan is unlikely. Michigan has classified pre-separation postnuptial agreements as different from other marital agreements. Under current law, postnuptial agreements that anticipate or encourage a future separation or divorce are unenforceable.