Archives for November 2016

Before You Wed… Consider a Prenuptial Agreement

A prenuptial agreement is a binding legal contract between two people who intend to marry, signed before they marry. Traditionally, these agreements are more common in second marriages or in marriages where one of the parties brings substantially more assets or earning potential into the marriage. Prenups have grown more popular in recent years, as millennials wait longer and longer before tying the knot for the first time.

Why a Prenuptial Agreement?
The main purpose of prenuptial agreements is to predetermine how certain issues will be decided if the parties divorce, such as property division or spousal support (alimony). For example, the couple may agree that one spouse will not work outside the home and that the working spouse will pay spousal support if they ever divorce.

Another example would be where one or both spouses have their own business that they do not wish to divide or sell in the event of divorce. The prenuptial agreement can also cover retirement accounts, life insurance proceeds, and just about anything else that is not prohibited by law.

What’s Not Allowed?
Prohibitions include things like matters of child support or child custody. Support is based on the needs of the children and the parents’ ability to pay. Custody is based on the best interests of the child at the time the parents separate, so the spouses-to-be have no authority to “settle” these issues ahead of time.

To be enforceable, the prenuptial agreement must be “fair” and “reasonable” both at the time of signing and at the time of enforcement. If the parties’ relative situations change substantially over time, the prenup may be deemed unconscionable and thus unenforceable at the time of separation.

Other than that, the single most important factor is “full disclosure”. The parties cannot conceal assets or other relevant financial information from each other before signing the agreement. If one party fails to fully disclose their financial position to the other, the court may refuse to enforce the agreement, and let the parties “fight it out” in traditional divorce fashion

But What if You’re Already Married?
Couples who are already married needn’t feel left behind. Michigan law also allows for the enforce-ability of post-nuptial agreements, which can be signed during the marriage and are subject to restrictions similar to a prenup.

Legal costs for preparing a pre or post-nuptial agreement vary widely depending on the complexity of the matter. If you have questions, Rosi & Gardner will be glad to help.

Did you DIY Your JOD?

If you handled your divorce without the involvement of an attorney, you or your former spouse may well have prepared your Judgment of Divorce. That “JOD” sets the terms for your divorce, including the division of assets and relative responsibilities for debts.

Most people who prepare their own Judgment of Divorce are doing it for the first time. You or your ex may not have had the experience or foresight to lay out what would happen if he was not able to get the mortgage refinanced and buy you out. Or, one of you could have lost that strong, steady job and the accompanying income that you had, and have been unable to make the payments as agreed. What happens now?

If you did prepare your own Judgment of Divorce, and things have changed or not worked out as you had agreed, all may not be lost. In Michigan, divorce courts retain jurisdiction and power to enforce and, in some circumstances, even modify a Judgment of Divorce. You might not be limited to the exact language of the judgment if there is no practical way to fulfill a term or provision of it. Or, you might be entitled to use some extraordinary remedies to complete and enforce the terms of that Judgement.

What happens if your ex, who was supposed to foot the bill for your kids’ college, has taken his self-employed business and assets and fled to another state? Are you stuck? Maybe not. You might be able to use some interstate collection tools and procedures to collect what is owed to you. If you agreed to take payments over time but he hasn’t made them, can you force him out of the house and sell it? Maybe. There are some extraordinary remedies available for some cases and circumstances.

If the “strings” of your divorce are still loose, you may want to speak with a lawyer, starting with one in the state where your divorce was entered. You may need to talk with an attorney in the state where your spouse now lives also. These days, legal representation isn’t always an “all or nothing” proposition. Some lawyers, for some types of cases or questions, will agreed to deliver a la carte legal services. And maybe, just maybe (especially if you did not do your own divorce judgment), your JOD does include a provision by which you could recover some or all of the attorney fees you incur if you have to take your ex back to Court for enforcement. Maybe.