Divorce and Your Money – Michigan Lawyers

The division of assets and liabilities happens during a divorce. Divorce and your money. You want to keep your money in your pocket as much as possible. Much if possible. In a marriage, even if you make money, your partner will keep half of it.

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You’ll need to consider it in the context of when that money was made during the divorce. Was it earned before the union? Or did you get it through your marriage? Money acquired during a marriage is considered a marital asset. The marital property gets split. The division of marital property is based on what is fair.

What are your marital assets?

All assets acquired by the spouses during the marriage are considered marital property. The asset could be tangible or intangible. Here are a few examples of what Michigan law commonly considers to be marital property: 

[ a ]  The house the couple purchased following their nuptials. 

[ b ]  The earnings the wife made while employed as a hotel cashier when the couple was married. 

[ c ]  The husband’s retirement program.

Assets acquired before the marriage are separate assets or separate property. Gifts or inheritances acquired during the marriage can be the spouse’s separate property.  The gift or inheritance was given to the spouse who purchased the asset. One spouse’s inheritance while they are still married is considered separate property. A spouse prevailing in a personal injury lawsuit and obtains pain and suffering damages. The payment for damages is considered separate property.

In rare instances, a separate asset may combine with or turn into marital property. There is enough legal precedent to explain how this happens. Here is one possible scenario. You made use of the separate property for the advantage of the family. The asset was joined with marital assets. A spouse may be eligible for a part of their spouse’s separate property. If the spouse helped pay for the property’s purchase, then this could happen. If the spouse has contributed to its development or buildup, it becomes a marital asset as well.

How does the court decide what should be subject to property division?

Community property is not recognized in Michigan. In Michigan, the “equitable distribution” principle is a framework used to divide marital property. Asset distribution is intended to be as equal or as close to a 50/50 split. They do this as is reasonably achievable in jurisdictions with community property laws. The term “equitable distribution” explains the principle of dividing up property. It is based on a determination of what is appropriate in each situation.

The marital estate must be divided equally into states with community property rules.  States with equitable distribution have the option to deviate from a 50/50 division. The courts typically split assets fairly, and occasionally equally. Michigan is an equitable distribution state despite this.

In property division, the court bases its ruling on some variables, such as:

[ 1 ]  The asset’s provenance;

[ 2 ]  How long the marriage has lasted;

[ 3 ]  The requirements of the parties and the children;

[ 4 ]  The financial resources available to the parties;

[ 5 ]  Help in obtaining it;

[ 6 ]  Circumstances that led to the divorce

[ 7 ]  Common equity principles; and

[ 8 ]  Other related factors the court deems relevant.

Divorces involving large assets or high net-worth couples can be a little complex. Before we can split the asset, we must first find out its value. Some assets are more challenging to value than others. This is true when there are a business or high net-worth assets involved in the divorce. The parties might have to work with appraisers of real estate. Or to take extra steps to determine a reasonable valuation.

It is not always simple to distinguish between separate and marital property. The court might find it difficult. More specifically, which assets belong to the marital estate, and which are distinct?  This is so especially when there is a mixing of separate and marital assets in commingling.

What debts you will share with your spouse?

Both partners receive a fair share of the debt from the marriage. This frequently implies that each individual is accountable for paying about half of the total debt. The following scenarios could result in an uneven distribution of debt:

[ a ]  The disintegration of the marriage is more the fault of one party.

[ b ]  One person has more money to spare, or

[ c ]  One partner accumulates debt, such as a partner’s gambling debt. The debt racked up without the consent of the other spouse. The spouse who gambles assumes the gaming debt.

[ d ]  On occasion, one partner will amass greater assets while accumulating more debt.

Debts incurred before marriage by one spouse are referred to as separate debts. In general, marital debt is any debt racked up while the couple was together. Whoever made the purchase or whose credit card was used is irrelevant.

This generalization is not always accurate. Debts accumulated from gambling or extramarital relationships are not considered marital debt. Restitution payments made as part of a criminal prosecution do not count as marital debt. A student loan taken out by one spouse while the couple was married is a separate debt. But, if the family was supported by student loans, then they may be regarded as having marital debt.

Typically, the debt associated with a property is assumed by the recipient. The property may stay in the person’s ownership. The owner is the one who can afford to meet the accompanying financial obligations.

How can you protect what money you have?

You now own or will inherit large assets that you want to safeguard from divorce. You can benefit from signing a prenuptial agreement before getting married. Prenuptial agreements let parties choose what will happen to their assets in case of their death or divorce.  It designates specific goods for each spouse. They also lay forth guidelines for running the household’s business. There are changes in how Michigan courts interpret prenuptial agreements. They have affected their ability to protect assets during a divorce. What was perceived as protection may no longer be as unquestionably true as it formerly was.

You must maintain the distinction between your property and the rest of your family’s cash and things. This can call for:

[ a ]  Maintaining an inherited sum in a different bank account.

[ b ]  Keeping your home and car under your sole name.

[ c ]  Not using marital funds to make improvements or repairs to inherited property.

[ d ]  Refusing your spouse’s help in keeping inherited property or managing the family business.

[ e ]  Keep up-to-date property records to prove your asset qualifies as a separate piece of property.

[f] Do not add your spouse’s name to your separate property’s certificate of title.

[g] Verify funds used to pay real estate taxes and income from these properties are credited to your account. Ensure they are drawn from sources in your name or come from checking accounts in your name. Pay the income taxes on the earnings from these different assets using the cash from the gifts or inherited property’s earnings.

Resolve the various concerns in your divorce amicably. Make up your mind about dividing your marital assets and debts. You two can agree on a solution with the help of your respective attorneys. Or, with the help of an experienced, qualified mediator. If you can come to a reasonable agreement, you can put it in writing. You refer to it as your “property settlement agreement” or “separation agreement.” You can request that the judge include it in the divorce judgment. This will enable you to save time, stress, and money.

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