Demi Moore and Ashton Kutcher have a prenup? Do you need one?

Posted on November 21, 2011 by dfindling

Demi Moore and Ashton Kutcher have a prenup? Maybe you need one?

Even if the age gap between you and your partner is not very large or your net worth is not in excess of $290 million, a marital agreement may be for you.

A marital agreement is a contract. Common names for a marital agreement are a prenuptial agreement, if entered before you marry or postnuptial agreement, if entered after you marry. Michigan recognizes both types of marital agreements.

It is unfortunately true that every marriage ends. Statistically, ½ of marriages end in divorce and the other ½ of marriages end in death.

Michigan law provides that a properly entered marital agreement is an enforceable contract. In simple terms, the divorce and probate laws will not control your destiny, your marital agreement will.

Marital agreements are powerful tools to plan your future, determine property rights and alimony. The agreements can dictate not only what happens if you divorce, but also what happens when a spouse dies.

The marital agreement can either expand or eliminate your rights to property, probate, homestead, and the right to act as an executor and administrator of your spouse’s estate.

Another common use of a marital agreement is as a legal separation agreement. The parties enter into the marital agreement and live separately, while maintaining the financial benefits of marriage. With a marital agreement, there is typically no public record of the contract. Therefore, the parties can maintain their health insurance, tax benefits and other benefits of marriage without the necessity to live as husband and wife.

Demi Moore and Ashton Kutcher should have a prenup, maybe you should too.

Daniel

CHANGING PENSION OR LIFE INSURANCE BENEFICIARIES AFTER DIVORCE. A JUDGMENT OF DIVORCE MAY NOT BE ENOUGH!

Posted on November 18, 2011 by dfindling

Changing pension or life insurance beneficiaries after divorce. A Judgment of Divorce may not be enough!

In almost every Judgment of Divorce, the parties either award or waive an interest in the former spouses’ pension plan(s) or life insurance plan(s). However, if the benefit is governed by ERISA, a waiver in a Judgment of Divorce may not be enough and your former spouse may still receive benefits as an unintended beneficiary.

A. Pension

Recently, the U.S. Supreme Court Case, Kennedy v. Plan Adm. for DuPont Savings and Investment Plan, ruled that an ex-spouse cannot waive an interest in a former spouse’s ERISA-governed pension plan through the divorce decree alone. The Estate sued the pension plan to recover the pension benefits wrongfully paid to the former spouse under the terms of the Judgment of divorce. In a unanimous decision, written by Justice Souter the Court held that the employer did not err in paying benefits to the former spouse even though the Judgment of divorce provided otherwise.

In light of the Kennedy decision, to ensure that a divorcing spouse’s intent to waive her interest in the pension plan is effectuated, lawyers must get the proper forms from the plan administer before the entry of the Judgment of Divorce and make sure the waiving spouse signs them contemporaneously with the entry of the Judgment.

B. Life Insurance

While, Michigan law provides that a Judgment of Divorce must either extinguish or preserve in the Judgment any and all rights of a party in any policy or contract of life insurance, endowment or annuity upon the life of another, in which the spouse was named or designated as beneficiary, or to which he/she became entitled by assignment or change of beneficiary during the marriage or in anticipation of marriage.

However, in Metropolitan Life vs. Pressley, 1996 Fed. App. 0122P (6th Cir.) the Court held that the waiver in a Judgment of Divorce is not enough. A party must also affirmatively terminate his or her spouse as a beneficiary of an insurance policy because the provisions of ERISA preempt Michigan law and the effectiveness of this statutory provision. Therefore, after entry of a Divorce decree, the party should also change the beneficiary on the life insurance, endowment or annuity or risk allowing the ex-spouse to take the asset as an unintended beneficiary.

Why Kim Kardashian does not have to give back her engagement ring.

Posted on November 14, 2011 by Daniel Findling

Married for 72 days?

Keep the ring!

Etiquette books may say if a marriage has lasted less than a year, then an engagement ring should be returned. Michigan law, is not politically correct on this issue. If the Kim Kardashian divorce was filed in Michigan, she would get to keep the ring.

Under Michigan law, as long as the parties go through with the wedding, the ring is a gift and need not be returned in the event of divorce. On the other hand, if a party breaks off the engagement, the ring is returned, regardless of the circumstances why the wedding was cancelled or who cancelled the wedding.

So the ridiculously large, the reported $2 million diamond ring Kardashian received from now-ex-husband Kris Humphries, she keeps it.

Now if they only had a pre-nuptial agreement . . .

Daniel

Citation: 244 Mich. App. 697,625 N.W.2d 136,2001 Mich. App.