Every divorce has a purpose, and the division of marital property is frequently on the table. A lot of divorces never get to trial. This indicates that most disputes, including who gets the house, are typically resolved by people’s attorneys. Now, in a divorce, can the judge order the sale of a home?
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The house usually belongs to the marital estate. When it comes to divorce, the court is in the business of liquidating assets. You can refinance it and give the other party half of the house’s value, or you can take on a loan or assume a debt to pay off the other party’s obligation. In the end, the court wants to provide each party an equitable portion that roughly equals a 50/50 split.
During a divorce, marital assets are distributed. Marital property is the majority of the possessions you or your spouse acquired while you were married. It won’t matter much whose name is actually on the title or certificate of ownership. Unless it was a gift or inheritance, it remains marital property. You both own anything that is marital property.
The Marital Property
Marital property is defined as that which is gained or results directly from the efforts and investments of the parties during the marriage and is subject to equitable partition under Michigan law.
In a divorce, the assets of the marriage are divided. The majority of your possessions—or those of your spouse—were acquired throughout your marriage. It doesn’t matter whose name is on a title or deed if one exists. Unless it was a gift or inheritance, it is still considered marital property. Anything that is marital property belongs to both of you.
Be aware that this covers property acquired throughout the marriage, even if it takes place after a divorce judgment has been issued. For instance, even if you file for divorce (or are truly divorced) before the bonus or commission is handed out, if you earn it while you are married, it will be regarded as marital property.
It is irrelevant which spouse actually earns the asset. A savings or retirement account can only be linked to the wages of one spouse over the course of the marriage. That account is still regarded by the law as marital property.
The Property Division
Equitable division refers to the distribution of marital property in a way that produces a result that is fair or equitable for each spouse; it does not mean that the property is divided evenly.
According to case law, courts will take into account the following factors, even though there isn’t a set list of them in Michigan’s statutory law:
[a] the length of the marriage; the needs of the parties;
[b] the needs of the children;
[c] the parties’ earning capacity;
[d] the source and contributions to the marital estate; and
[e] the reason for the divorce, including marital misconduct.
There are a number of issues that need to be resolved when splitting interests in a house or other real estate. For instance, it will probably be essential for the opposing party to receive a counterbalancing equity buyout if one party seeks to receive 100% of the marital rights in a couple’s house. The parties will probably have to sell the marital house and divide the net proceeds if there is not enough flexibility in the marital estate to allow one party to maintain the home and grant the other party an equity buyout adequate to meet equal division of the marital estate.
In order to distribute the property in a fair and equitable manner, the court must be aware of its value. That’s quite simple with some assets, like a bank account. You will usually need to seek advice from an expert, such as a business or real estate appraiser.
Moreover, there are other matters to consider such as the transfer of title to the property, the assignment of insurance and any escrow balance, the allocation of income tax and real estate tax benefits and liabilities, the use of security mechanisms, closing costs, the assumption of liens, encumbrances, ownership expenses, and occupancy expenses, the removal of a party’s name from third party liability (most importantly mortgage liability), the occupancy rights, sale provisions, closing costs, the apportioning of those obligations, and the assumption of those benefits.
Marital property includes the portion of a pension or retirement plan that was accrued during a marriage. In the event of divorce, the non-employee spouse is entitled to a portion of their spouse’s pension or retirement plan. Sometimes parties agree to maintain and not divide their respective pensions or retirement plans. Another alternative is to provide additional assets to the non-employee spouse equal to half of the retirement benefit accumulated by their spouse during the marriage.
Evaluating retirement accounts may be particularly challenging when they are divided prior to their pay-out period. In that case, you’ll need to determine the account’s current value, which almost definitely requires the assistance of an actuary.
The job of an actuary is to help clients reduce risk by estimating the financial effect of uncertainty using math and statistics. The risks associated with financial investments, insurance plans, and other potentially hazardous endeavors can be evaluated and managed by an actuary.
If you and your spouse feel comfortable negotiating, get together, make a list of all of your assets and liabilities, and decide how to share them. If you and your spouse have agreed, the judge will assess your settlement to ensure that it is fair and will usually approve it.
The Marital Home
The house where you and your spouse resided while you were married is known as your marital home. Think about who can afford to keep the house between you and your spouse. Typically, whoever owns the marital house is responsible for all of its expenses. Mortgage payments, property taxes, and maintenance fall under this category.
It makes sense for the person who can afford to keep the home when there is only one person who can afford these fees. Sometimes neither party can afford the house on their own, in which case the only choice is to sell the house and split the proceeds. You two might be able to come to an understanding over what should happen to the house. If you can’t come to a decision, a mediator or attorney may be able to assist you.
One of two things could occur if your case gets to trial and the judge chooses how to divide your property. The judge may order you to sell the home or grant it to one of you. You and your husband will split any proceeds from the sale if the judge authorizes one. Alternatively, if you owe more than the house is worth, the difference will be split between you.
Before a divorce is official, it’s customary for one spouse to leave the marital residence. Sometimes people believe that when they move out, their property rights are forfeited.
That is untrue.
Before getting a divorce, a spouse who vacates the marital residence retains a property interest in it.
What is very true as we have discussed here is that a judge in a family court in Michigan can order a house to be sold to resolve property division in a divorce.
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