This article provides an overview of the complicated history of premarital and marital agreements and recent efforts made by the State Bar of Michigan Family Law Section to provide clarity through enactment of the Uniform Premarital and Marital Agreements Act, tailored for Michigan.
Before 1981, Michigan recognized only prenuptial agreements that governed the division of property upon the death of a spouse. In 1981, MCL 557.28 was enacted, providing for prenuptial agreements in contemplation of marriage:
A contract relating to property made between persons in contemplation of marriage shall remain in full force after the marriage takes place.
Special nature of agreements concerning marriage
In 1982, the Michigan Supreme Court in In re Benker Estate addressed a prenuptial agreement limiting the surviving spouse’s property rights upon the death of the other spouse.1 Benker acknowledged the statutory expansion of prenuptial agreements, and its discussion applies generally to both prenuptial agreements concerning a surviving spouse and agreements in contemplation of marriage:
Such agreements, while recognized as valid instruments, are of a special nature because of the fact that they originate between parties contemplating marriage. This relationship is one of extreme mutual confidence and, thus, presents a unique situation unlike the ordinary commercial contract situation where the parties deal at arm’s length. In order for an antenuptial agreement to be valid, it must be fair, equitable, and reasonable in view of the surrounding facts and circumstances. It must be entered into voluntarily by both parties, with each understanding his or her rights and the extent of the waiver of such rights [citation omitted]. Antenuptial agreements give rise to a special duty of disclosure not required in ordinary contract relationships so that the parties will be fully informed before entering into such agreements.2
The agreement in Benker involved a significant waiver of rights. The husband’s estate was ample compared to his wife’s; the decedent was secretive about his financial affairs; the agreement did not indicate, generally or specifically, whether the parties were fully informed of each other’s property interests; the widow was not represented by independent counsel; and the scrivener was unable to testify that full disclosure was made by the parties.3 The Michigan Supreme Court found that while the burden of proving non-disclosure relating to a premarital agreement is generally on the party seeking to invalidate, a rebuttable presumption of non-disclosure may arise depending on the factual situation. In Benker, the estate attempting to enforce the agreement did not overcome the rebuttable presumption of non-disclosure and the agreement was not enforceable. Benker emphasized the clear duty to disclose to the other party, which had been previously recognized by the Michigan Legislature.4
Almost 10 years later, the Michigan Court of Appeals in Rinvelt v. Rinvelt addressed a prenuptial agreement in contemplation of marriage and distilled review considerations based on Benker and various Michigan and sister-state decisions, including:
- Was the agreement obtained through fraud, duress or mistake, or misrepresentation or nondisclosure of material fact?
- Was the agreement unconscionable when executed?
- Have the facts and circumstances changed since the agreement was executed, making enforcement unfair and unreasonable?5
These agreements must be viewed within the unique context of family law. They are distinguishable from commercial contract relationships — with a focus on equity and protections including the special duty of disclosure so the parties are fully informed before entering into such agreements.
Statutory focus on equity in divorce
The trial court’s duty in divorce is ensuring the fair and equitable treatment of the parties. This principle of equity is codified within Michigan’s statutory scheme concerning divorce including property division (MCL 552.19, MCL 552.23, and MCL 552. 401) and spousal support (see, e.g. MCL 552.13.)6
The Michigan Supreme Court in Sparks v. Sparks explained that divorce actions are still a type of equity suit even though Michigan no longer has separate equity courts, trial courts must reach a disposition that is fair and just,7 and the statutes dealing with, for example, the disposition of property on divorce provide that “general principles of equity must be considered.”8
Historically, the general rule has been that a married couple may not enter into an enforceable contract that anticipates and encourages a future separation or divorce. In 2020, the Michigan Court of Appeals in Skaates v. Kayser discussed appellate courts affirming differing types of postnuptial agreements, including those agreements made by married couples living together (i.e., not separated or otherwise contemplating an imminent divorce).9
Skaates affirmed the agreement in that case — which had been agreed to prior to the marriage but signed after the parties married as a type of hybrid premarital/marital agreement. The controlling consideration appears to be whether such agreements promote harmonious marital relations and keep the marriage together. There is no clear approach to determining what constitutes promotion of marital harmony. Equitable considerations such as duress and disclosure apply to marital agreements.10
ALLARD v. ALLARD
In 2017, the state Court of Appeals published Allard v. Allard after remand from the Supreme Court to address the fundamental issue of trial court statutory authority to attach separate property awarded in a premarital agreement.11 In a nutshell, Allard affirmed a trial court’s authority under MCL 552.23(1) to invade otherwise separate assets of one spouse if the property awarded to either party is “insufficient for the suitable support and maintenance” of the other party and, under MCL 552.401, to award the separate property of one spouse to the other where the other “contributed to the acquisition, improvement, or accumulation of the property” regardless of how that separate property arose — including through a prenuptial agreement. The bottom line is that under Allard, the parties cannot contractually waive a trial court’s authority and duty to ensure equity consistent with the statutes.12
Skaates acknowledges that Allard applies to postnuptial agreements. Also, parties cannot attempt, by contract, to bind the equitable authority granted to a trial court under MCL 552.23(1) and MCL 552.401; any such agreement is necessarily void and against both statute and public policy codified by the Michigan Legislature.13
THE UNIFORM LAW COMMISSION AND UNIFORM PREMARITAL AND MARITAL AGREEMENT ACT
Now, every state recognizes the validity of these agreements in one form or another, although the standards for regulating such agreements vary from state to state.14 In an effort to bring about a measure of uniformity, the Uniform Law Commission (ULC), consisting of lawyers, judges, and legislators, was established in 1892 to research, draft, and promote the enactment of uniform state laws where it is desirable and practical.15 The ULC promulgated the Uniform Premarital Agreement Act (UPAA) in 1983, which was adopted in 26 jurisdictions, most of them in the 1980s or 1990s.16 However, the validity of marital agreements remained unsettled, resulting in promulgation of the Uniform Premarital and Marital Agreements Act (UPMAA) in 2012, which was adopted in two jurisdictions.17
Although family law and procedures are generally matters of specific state law, there are several examples of laws where uniformity across jurisdictions is desirable or essential.18 According to the ULC, a uniform act is one that:
seeks to establish the same law on a subject among the various jurisdictions.19 An act is designated as a “Uniform” Act if there is substantial reason to anticipate enactment in a large number of jurisdictions, and uniformity of the provisions of the act among the various jurisdictions is a principal objective.20
This is different from a model act which, according to the ULC, is a designation applied when uniformity “may be a desirable objective, though not a principal objective, and the act may promote uniformity and minimize diversity even though a significant number of jurisdictions may not adopt the act in its entirety, or the purposes of the act can be substantially achieved even though it is not adopted in its entirety by every state.”21
Currently, 28 states have passed legislation to help bring uniformity to premarital or marital agreements by codifying either the UPAA or the UPMAA; Michigan is not among the states that have done so.22
Uniformity remains elusive as states have amended the act in various ways over the years. Nevertheless, the purpose of the UPMAA remains to promote clarity and consistency among jurisdictions while acknowledging that jurisdictions differ in many respects including, but not limited to, fairness reviews based on the parties’ circumstances at the time the agreement is to be enforced; determining how to allocate the burden of proof for enforcing the agreement; and optional terms for waiving or modifying rights at divorce or death of the other spouse.23
KEY COMPONENTS OF THE UPMAA
The UPMAA aims to bring clarity and uniformity among states by codifying certain key elements. Among them:
- it does not apply to separation agreements, nor does it affect the rights of third parties when a spouse is involved in a transfer of property in which the other spouse’s waiver of rights is required;
- it affirms that normal principles of choice of law and conflict of laws apply to premarital and marital agreements;
- it declares that both premarital and marital agreements are enforceable without consideration; and
- it establishes enforcement standards, specifying that “unconscionability” and “failure of disclosure” are alternative grounds for making a premarital or marital agreement unenforceable.
Moreover, duress and lack of access to independent legal counsel are also bases to render an agreement unenforceable under the UPMAA.24
FAMILY LAW SECTION RECOMMENDATION
In 2021, the SBM Family Law Section formed a subcommittee to make a recommendation to the section council on possible legislation that would make Michigan the 29th jurisdiction to pass a version of the Uniform Act. Among the issues the subcommittee considered:
- Should the section support enactment of legislation codifying the validity of premarital agreements and, if so, should the section support a bill enacting the UPMAA?
- Should legislation address marital agreements and premarital agreements?
- How would the legislation address key Michigan case law, most notably the Allard decision?
- To what extent is it advisable to adjust the standard provisions of the UPMAA on financial disclosures and unconscionability?
The subcommittee concluded that enacting a version of the UPMAA that codified both premarital and marital agreements was appropriate. The final question — modifying the terms of the Uniform Act — remained.
Section 5 of the UPMAA states that “[u]nless displaced by a provision of this [act], principles of law and equity supplement this [act].”25 But what does that mean for the Allard decision? Would enactment of the UPMAA reopen the door and call into question the court’s authority to invade the separate property of one spouse pursuant to MCL 552.23 and MCL 552.401 based on language in the agreement waiving such rights, a question which was settled in Allard?
The Family Law Section Council concluded that a provision within Section 5 of the UPMAA codifying the Allard decision was vital to achieving certainty. The section was amended to read:
Unless displaced by a provision of this [act], principles of law and equity supplement this [act], including a court’s authority under MCL 552.23(1) and MCL 552.401, but only to the extent necessary to achieve the purposes of the statutes. Imposition of a remedy under either statute does not invalidate the entire marital agreement unless the agreement otherwise fails to meet the requirements of this act.
As stated in the revised comments, the proposed act is not intended to change the established law in Allard. Ultimately, the council concluded that enacting the UPMAA without a specific reference to Allard could potentially create uncertainty, which conflicts with the intent of the UPMAA.
The Family Law Section Council in March 2022 voted unanimously to approve a draft of the UPMAA with the above revisions.26 The next step is engaging with lawmakers and securing a legislative sponsor with the hope that UPMAA becomes codified in statute in 2023.
The authors acknowledge the extraordinary efforts of Randall Velzen, who chaired the Family Law Section Subcommittee on Premarital and Marital Agreements.