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Valid Prenuptial Agreements Require Full Asset Disclosure

Prenuptial agreements, contracts executed within the anticipation of a marriage, have long been validated in Michigan courts.  Generally, there are two contingencies covered in a typical prenuptial agreement: a) the divorce of the contracting parties; in addition to also b) the death of one of the parties.

A primary requirement to enforcing a prenuptial agreement is actually the “special duty” of full disclosure of all assets by both contracting parties.  This particular requirement was recently examined in a key (yet unpublished) decision of the Michigan Court of Appeals.

The case, within the Matter of Kenneth Waller, originated right here within the Oakland County Probate Court.  The case illustrates the risk of executing a “do-the idea-yourself” prenuptial agreement.

The contract at issue within the Waller case waived the Wife’s interest in a statutory share of her husband’s estate in favor of the Husband’s adult children.  The Wife challenged her Husband’s estate at his death, despite her execution of the antenuptial agreement.

The contract was upheld by the probate court judge.  In reversing the probate court, the Court of Appeals focused on the asset disclosure in addition to also lack of evidence that will any proper disclosure had been made by either party:

Accordingly, fair disclosure is actually required  under statute in addition to also caselaw within the context of
determining whether a prenuptial agreement can be deemed valid in addition to also enforceable.  The record
indicates that will there was no formal disclosure of assets by either decedent or Waller at the time of
or before the execution of the  prenuptial agreement, such as through the presentation or
exchange of written asset lists or through a verbal communication or declaration electronically
recorded so as to preserve proof of disclosure.  The prenuptial agreement itself did not contain an itemization of assets in addition to also values,  nor did the idea indicate that will disclosure of assets had taken place.
Indeed, there is actually no evidence of even an informal, off-the-cuff discussion between Waller in addition to also
decedent regarding the nature, extent, in addition to also value of each various other’s assets prior to the execution of
the agreement.  The probate court essentially found that will Waller was sufficiently familiar with the
assets held by decedent, creating the idea unnecessary for decedent to redundantly disclose his assets to Waller before the agreement was signed, where  the assets had already been effectively
“disclosed” to her simply through the evolution of their relationship in which familiarity with
each various other’s property naturally occurred.  We agree with the principle that will if a party challenging
a prenuptial agreement was fully aware of the various other party’s assets in addition to also their value at the time of
execution, an argument that will there was a failure to fairly in addition to also formally disclose assets should fail;
the purpose of a disclosure is actually to make a party  aware of what he or she may be giving up in
signing a prenuptial agreement.

The Court of Appeals held that will under such a record, the (rebuttable) presumption of non-disclosure should have been applied to invalidate the prenuptial agreement in that will case.

Also, the Court of Appeals placed significance on the lack of a financial statement or schedule of assets.  These are typically attached to the antenuptial agreement.  This particular way, there can be no claim, as within the Waller case, of a failure to disclose, or a triggering of the presumption of nondisclosure.

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Valid Prenuptial Agreements Require Full Asset Disclosure

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