Matter of Estate of Benker
416 Mich. 681, 331 N.W.2d 193 (1982)

  • At 71, Charles married Elizabeth. The pair signed an ante-nuptial agreement (aka a prenup) that waived all rights each had to the other’s estate. Charles died.
    • Btw, Charles had a previous daughter (Ruth) from a previous marriage. She was appointed executor.
    • Also, Elizabeth was judged legally incompetent, but her son from a previous marriage acted as her guardian.
  • Ruth was surprised to learn that Charles had left a huge estate ($640k). No one realized he had been squirreling away money like that.
  • Ruth went to the Probate Court and asked them to determine the validity of the ante-nuptial agreement.
    • Elizabeth’s son argued that Elizabeth’s estate was far less substantial ($110k) than Charles’ turned out to be, and Elizabeth only signed the ante-nuptial agreement under the false impression that Charles had no money.
  • The Probate Court declared the ante-nuptial agreement to be invalid. Ruth appealed.
    • The Probate Court found that there was a presumption of nondisclosure, and there was nothing in the ante-nuptial agreement to rebut the presumption.
      • Basically, it was presumed that Charles had not told Elizabeth that he had a lot of money. There was nothing in the ante-nuptial agreement that referenced disclosure.
        • Since Ruth was incompetent, no one could ask her if Charles had told her about his assets.
      • If Charles had hidden assets, then the agreement would be void because it was based on fraud.
  • The Trial Court affirmed. Ruth appealed.
  • The Appellate Court reversed. Elizabeth’s son appealed.
    • The Appellate Court found that the burden of proof lay with Elizabeth, since she was the one who was trying to invalidate the contract.
  • The Michigan Supreme Court reversed and found the ante-nuptial agreement to be invalid.
    • The Michigan Supreme Court found that there is a duty of disclosure inherent in an ante-nuptial agreement.
    • The Court found that the burden of proof was on the person seeking to invalidate the ante-nuptial agreement.
    • The Court found that a presumption of non-disclosure is properly invoked when a number of facts are weighed, including:
      • A complete waiver of all rights.
      • Disproportionate estates between the parties.
      • One party was secretive about their financial affairs.
      • The ante-nuptial agreement makes no mention of disclosure.
      • The parties were not represented by independent counsels.
      • The attorney that drafted the ante-nuptial agreement testifies that there was no discussion of disclosure.
    • The Court looked at these factors and found that the presumption on non-disclosure was appropriate, and so the ante-nuptial agreement was invalid.