It’s time to end the divorce process. The court reached a conclusion and penned the divorce decree. You start contemplating the entire procedure and result. You doubt whether what you did was the proper thing. Was it just and reasonable? Should I ratify it? Your attorney gave you guidance throughout the procedure. Was that the decision the right move at the time? Reflecting on those choices is now an intellectual exercise. The verdict or result will not be altered for you by the judge. Find out more about property distribution on your own and retrace your steps.
Click here to watch the video on Determining Fair Division of Assets Post Divorce – Michigan Law
How to determine an equitable and fair division of assets post-judgment? Have a look at the combined marital asset valuation. Determine how the 50/50 distribution of the assets will look. Consider the asset’s whole market value. Not exactly 50/50 is divided. Speak to your attorney. Get an explanation from your attorney of the formula used to determine the actual asset distribution.
In Michigan, the “equitable distribution” legal principle is used to split marital property. States that practice community property division aims to divide assets as evenly as feasible. Equitable distribution laws divide property in accordance with what is deemed fair in each situation. You have the final judgment of divorce. Now you want to know if the property division was equitable and fair. Walk through the process again. Know how property division was done. If you���re still re-tracing your steps, then divorce is not really amicable. Your property division is a result of a divorce trial.
One of two things happened when your divorce case went to trial. The judge chose how to distribute your property. The judge ordered you to sell certain assets or granted them to one of you. You and your spouse split the proceeds from the sale if the judge authorized one. If you owe more than the assets are worth, the debts were split between you.
What is being divided and distributed in property division?
It’s imperative that you comprehend Michigan’s property division laws. States are classified as “community property states” or “equitable distribution states.” Michigan comes under the latter category. Learn what it entails for the distribution of marital assets and liabilities. Assets and debts in the marriage are divided when the court distributes marital property. The term “marital property” can refer to both assets and debts.
Most assets acquired after the date of marriage are considered joint property. Separate property refers to assets obtained before the wedding. Talk to your lawyer about any exclusions to this classification as there are some.
Debts incurred through extramarital relationships, gambling, and legal restitution are not marital debts. One spouse’s education-related student loans taken out during a marriage are treated as separate property. Student loans might be viewed as marital debt if they were used to support the family. Usually, the debt associated with a piece of property is assumed by the person who gets it. The property may continue to be owned by the individual who has the means to fulfill the associated obligation.
There are properties excluded from the marital estate. It’s excluded through a legally binding prenuptial agreement. These possessions won’t be divided in the event of divorce.��
Property obtained by one partner during the marriage as a result of an inheritance or gift. A present that was not given by the other spouse and was not obtained using marital assets. Those mentioned will not be divided during the divorce process.
How do courts decide what should be subject to property division?
In Michigan, dividing marital property follows the “equitable distribution” principle.�� The term “equitable distribution” describes a method of dividing up property. It is founded on an assessment of what is right in each circumstance.
In states with equitable distribution, judges have the option to deviate from a 50/50 division. Assets are normally divided fairly and occasionally evenly by the courts.
When dividing marital property, the courts take into account a number of variables, such as:
[1] The asset’s provenance;
[2] How long the union has lasted;
[3] The requirements of the parties and children
[4] The financial capacity of the parties;
[5] Assistance in obtaining it;
[6] Factors that led to the divorce
[7] Common equity concepts; and
[8] Any other elements the court deems significant.
Divorce situations involving high-net-worth spouses or high-value divorces can be a little complex. Before we can divide them, we must first determine the asset’s value. It’s more difficult to appraise some assets than others. It will be more difficult to value some forms of property than others. This is appropriate when there are high net worth or commercial assets involved in the divorce. Property appraisers may need to work with the parties. Or to go above and beyond to determine a reasonable valuation.
All your marital property was accounted for. The marital property was divided.The majority of your or your spouse’s goods were amassed during your marriage. It doesn’t matter whose name is on a title or deed if there is one. Unless it was a gift or inheritance, these properties are still considered marital property. Anything that is marital property is owned by both of you.
The marital home.
Your residence with your spouse during the marriage constitutes your marital home. If you got the marital home as part of your final judgment, it means you can afford to keep it. Talk about this with your spouse. Typically, the spouse who owns the marital home is now liable for its costs. Maintenance, real estate taxes, and mortgage payments are all considered expenses. Only one of you got it because only one of you can afford these costs. It makes sense for that individual to stay in the home. The only choice when neither party can afford the house on their own is to sell it and divide the money.
Your pension or retirement plan.
Retirement plans or pensions acquired during a marriage are considered marital property. It is a part of the property division-eligible assets. A share of the pension or retirement plan of the non-employee spouse is also due to them. Retirement plans or pensions acquired during a marriage are considered marital property. It is a part of the property division-eligible assets. A share of the pension or retirement plan of the non-employee spouse is also due to them. The parties may agree to maintain their individual retirement plans or pensions. You can avoid dividing them. It was possible to offer the non-employee spouse’s assets. Half of the retirement benefits accrued during their marriage can be the value of the asset. If you did not agree to anything, then that decision was made for you by the court.
Your debt is also in your final judgment.
Debts are part of the equitable distribution process. One spouse’s debts from before the marriage are treated separately. A student loan is one illustration. They remain that spouse’s responsibility. Debts typical of a married couple’s lifestyle are seen as joint obligations. Repayment is the joint responsibility of the couple. Consider your auto loan, credit card balance, mortgage, and medical expenses.
If got an asset, you are responsible for any debt associated with that asset. It is incorporated into the divorce settlement. The mortgage on the family house if you got it in the judgment makes you solely responsible for it. You get more assets. You also acquire debts with it.
Keep in mind that your creditors are not bound by the divorce ruling. The credit card company will still view you as being accountable. Even if your spouse is supposed to be paying off a joint credit card but neglects to do so, you are still liable. Your ex-spouse must abide by the terms of the divorce.�� Your credit score can only improve if you step up and make the payments in the interim.
The business enterprise.
Even if a company has no actual value or market value, it will still be assessed in a divorce. The “holder’s interest” should be utilized as the basis for valuing a firm, according to the family courts in Michigan. The business can be worthless to anybody but the owner. The appraiser may, nevertheless, determine a value based on how significant the firm is to the owner.
During the trial, you would have paid an appraiser. The appraiser would have examined the earnings the business owner accrued over time. The appraiser decides how much a company would pay that business owner as an employee. The appraiser increased the business’s gross value by the sum of the two differences. This increases the enterprise’s worth. This method of valuing inflated the company’s value. It made the company that has little to no value appear to be worth thousands of dollars. A few hundred thousand dollars even.
That fictitious value was used to determine the division of the business enterprise. Your spouse owning the business would have to give you the other half of this fictitious value from other assets. Here’s the only advantage if your paying alimony. The lesser income used to value the firm will be applied to calculate alimony. Child support will still be determined using the higher income.
How does the court determine the value of marital assets?
Ask your lawyer to retrace the steps taken to arrive at an equitable valuation of marital assets. To ensure equitable distribution of marital property, know the value of assets. Parties often make contrasting statements about the worth of a specific asset.
A business can fall under the category of divisible marital property in part or in its entirety. The judge is likely to award the entire business to one spouse. The court can instruct them to buy out the other spouse’s share of the business. The spouse continuing the company will make a case for a lesser business value. This will save money when buying out their spouse’s interest. The partner who plans to sell their share of the company will show that the company is worth more for better gain.
Experts use different financial or accounting principles to assess the worth of assets. These principles are applied to assets like business interests, investments, stocks, and bonds.
Show the worth of a piece of property by providing proof of the price. The price at which buyers would be willing to part with their money. The “fair market value” of an asset. Certain assets may not be marketable. The “replacement value” or “replacement cost,” may be used to prove their value.
Certain things’ values change over time. A gallon of petroleum costs different amounts today than it would in 2020. The date of an asset is one critical factor in the valuation analysis to determine value.
[ a ]�� Divorce filing date: Some assets may be valued as of the filing date for the divorce lawsuit. The amount in a bank account or its balance on the day a divorce petition was submitted can be used as an example.
[ b ]�� Date of appraisal: An appraiser, for example, is needed to determine the worth of some assets. Courts can use a home’s worth as of the appraisal date.
[ c ]�� Divorce filing date to divorce trial: When an asset’s value changes over time. Consider the average values between the date the divorce petition was filed and the day of the trial. This approach is suitable to value retirement funds and pensions.
[ d ]�� Final judgment: The court can select an earlier date. The court has the discretion to do equitable distribution using the value of an asset on the last day of trial.
Court-mandated appraisals must be exact. This was done to ensure assets can be allocated fairly and evenly. Having a bank account, for example, makes this process rather simple. Remember that you paid for the counsel of specialists during the divorce trial.
If what you have remembered and experience so far is consistent with what we mentioned here, you probably have a fair and equitable proportion of your share. If not, you probably need another lawyer.
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