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A Better Partnership
May 31, 2016

Prenups are not ironclad where divorce could leave one party destitute

Antenuptial agreements that do nothing more than divide property between marital estates and the parties separate estates do not shield a party’s separate estate from being invaded under MCL 552.23(1) and MCL 552.401, even where such an invasion is contrary to the antenuptial agreement, according to the Supreme Court decision in Earl H Allard Jr v. Christine A Allard, No. 152484. The Court left open the possibility that parties, via antenuptial agreement, may waive their ability to utilize MCL 552.23(1) and MCL 552.401, remanding that issue to the Court of Appeals.
 
MCL 552.23(1) allows a court to award either divorcing party a portion of the real and personal estate of their counterpart where the property in the marital estate initially awarded is insufficient for family support and maintenance. MCL 552.401 allows for a similar invasion of the separate estate where it is proven that the counterparty contributed to the acquisition, improvement, or accumulation of the property sought.
 
The Supreme Court also determined that assets acquired by the various limited liability companies created during the parties’ marriage were not covered by the antenuptial agreement. The Court determined that although a limited liability company member has no interest in company property, the membership itself is personal property, which is the “sole and separate property” of plaintiff’s pursuant to the antenuptial agreement, as the companies were created by and titled in plaintiff’s name only.
 
Our earlier post on the Court of Appeals’ decision can be found here.

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