Opinion ID: 1614117
Heading Depth: 2
Heading Rank: 2

Heading: antenuptial agreement and the duty of disclosure

Text: It is now generally recognized that antenuptial agreements which relate to the parties' rights upon the death of one of the parties are favored by public policy. [2] MCL 557.28; MSA 26.165(8) recognizes such contracts and provides that: A contract relating to property made between persons in contemplation of marriage shall remain in full force after marriage takes place. Such agreements, while recognized as valid instruments, are of a special nature because of the fact that they originate between parties contemplating marriage. [3] 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. Hockenberry v Donovan, 170 Mich 370, 380; 136 NW 389 (1912). 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. The Legislature has recognized the validity of agreements that provide for the waiver of rights by a surviving spouse in the decedent's estate, but specifically requires fair disclosure: The rights of the surviving spouse to an estate or to dower under sections 1 to 29 of chapter 66 of the Revised Statutes of 1846, as amended, homestead allowance, election, exempt property, and family allowance or any of them, may be waived, wholly or partially, before or after marriage, by a written contract, agreement, or waiver signed by the party waiving after fair disclosure. MCL 700.291; MSA 27.5291. (Emphasis added.) The duty of disclosure is recognized by numerous jurisdictions and is succinctly described in Anno: Setting Aside Antenuptial Agreement Based on Non-Disclosure, 27 ALR2d 883, 886, as follows: Where, as is usually the case, the parties to an antenuptial property settlement occupy a confidential relationship toward one another, and the agreement substantially affects the property interests which one or the other would otherwise acquire by the marriage, each is under an affirmative duty to disclose to the other the nature of his property interests so that the effect of the agreement can be understandingly assessed, and in the absence of such a full and frank disclosure, the courts will refuse to give effect to such an agreement attacked by the spouse to whom disclosure should have been made. (Footnotes omitted.)