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Practice Area

Property Division

How is property divided in a Michigan divorce?

In Michigan, the division of marital property follows the rule of "equitable distribution". This does not mean that the property needs to be 50/50 in a Michigan divorce, but there is a presumption that the property will be fair and divided in an appropriate fashion with equity in mind. A court may depart from this presumption in a Michigan divorce property settlement, but must explain the reasons on the record.

What's the difference between separate and marital property in Michigan?

In Michigan, separate property involves assets that a party owned before the marriage, any gifts or inheritances, assets received after separation or filing, or assets or appreciation traceable to these items. This would include things like owning a car before the marriage, or inheriting money from a family member while married.

Generally in Michigan divorces, the above property will be awarded to the individual party unless the non-owner spouse can prove that they contributed to its acquisition improvement or accumulation or that absent a division of the separate property, the marital property would be insufficient for their suitable support in a Michigan divorce.

This means that if one spouse brings property into a marriage, and the other spouse does something to improve it's value, they will be entitled to a share of that property in Michigan. If the assets owned as part of the marriage are not enough to provide suitable support to the other spouse, a Michigan court could make the owner share some of their "separate property".

In Michigan divorce cases, the non-owner spouse can contribute to the value of the separate property either directly (a wife contributing to the improvement of her husband's separate property) or indirectly as a wife contributing as a homemaker, which allowed the husband to grow the value of his business. Under both circumstances, the wife might be entitled to a portion of this "separate property" as part of a Michigan divorce.

How does a Michigan divorce court decide how the marital property is divided?

In Michigan courts will use a number of factors for dividing the marital property. The court will look at the length of the marriage, the needs of the parties, the needs of the children, the earning power of the parties, the source of of the property, where the contributions toward property acquisitions came from, and the cause of the divorce, including the issue of fault in the breakdown of the marriage. Although fault can play a role in the court's decision, it cannot be the sole reason, and cannot be used as a means to punish a party for their actions. The court may also consider other factors that may be relevant to the division of marital property in Michigan.

What is considered marital property in a Michigan divorce?

In Michigan marital property begins at the wedding and continues until the judgment of divorce, regardless of when the parties cohabited or separated. If property is received after the judgment, but earned during the marriage, it will be considered marital property in Wayne County.

The value of marital property in a Michigan divorce can be difficult to determine due to the accumulation, appreciation and depreciation of property. A Michigan divorce court will use a date of valuation that is supposed to encourage rational economic behavior. The goal of the court is for the value to remain high, without either party having an incentive to affect the value.

How does a court determine the value of property in a Michigan divorce?

In a Michigan divorce, the value of different properties must be determined. When splitting up different property in an equitable fashion, the Michigan divorce attorneys and judge must be able to place a value on each individual piece of real or personal property. A party must be able to prove the value of a property to a court if a settlement cannot be reached and there is contention about the value between the parties. It may be necessary to bring in experts to determine the value of complex or rare assets like business interests, antiques, collectibles and certain real estate and other personal property in a Michigan divorce.

It is very important to take into consideration the tax consequences of real and personal property. If one party receives property with carries a large tax bill or other debt, the value is decreased. In Michigan divorces, marital debts are considered to be negative assets. It's important to note that if one party takes on a debt of the marriage as part of the settlement, the holder of that debt (third party) can still go after both parties for satisfaction of the debt.

Are Michigan property settlements a public record?

No, many divorcing couples in Michigan will come to an agreement on property division before finalizing their divorce due to a waiting period or delaying the divorce for tax purposes. A benefit of a property settlement in Michigan is that it is not a public record like the divorce judgment. A Michigan divorce judgment can simply incorporate and reference the separate property agreement without reciting all of the terms. This is done to keep the parties financial private.

A Michigan property settlement agreement can be merged or not merged with the judgment of divorce. When a settlement is merged in the judgment, it becomes part of the court order and is enforceable as an order of the court. If the settlement is not part of the divorce in Michigan, it is simply a free-standing separate contract.

Is Michigan Worker's Compensation and Social Security considered material property in a Michigan divorce?

Yes, both of these are considered marital property in a Michigan divorce because they are considered substitutes for earnings and are intended to benefit the worker and their dependents. After 10 or more years of marriage, an ex-spouse may collect benefits equal to half the benefits being paid to the other spouse, but this does not limit a court or parties from using one spouse's social security payments to provide additional child or spousal support as part of a divorce in Michigan to the other spouse.

Are stock plans/options considered marital property in a Michigan divorce?

Yes, stock options are divisible marital assets in a divorce in Michigan. Once divorced the parties may buy each other out of the option or use a constructive trust for the non-owner who will receive half of the value of the options. Employee stock ownership plans and unvested rights are also divisible in Michigan divorces.

Are vacation and sick days divisible in a Michigan divorce?

Yes, in Michigan if an employee could receive cash payment for vacation and sick time, the benefits can be divided as assets of the marriage.

Can property division be part of a prenuptial/antenuptial agreement in Michigan?

In Michigan prenuptial agreements can be used to govern property division in a divorce. The agreement to be valid must be in writing and signed by the parties, entered into voluntarily, without fraud, mistake or duress and with full disclosure, and it must be fair and not unconscionable when executed, and circumstances must not have changed so much by the time of enforcement that its later enforcement would be unconscionable.

If I commingle separate property does it become marital property in Michigan?

In Michigan if a spouse treats separate property as if it belongs to the marriage, a court may consider the property to be material property and divide it as marital rather than separate property. An example of this in a divorce in Michigan would be adding a gift or inheritance to a joint account, which is used to support the daily life of a marriage. This is a case-by-case situation depending upon the facts, type of property, purpose and length of time of commingling.

Are professional licenses and advanced degrees divisible in Michigan divorces?

In Michigan when a spouse's professional degree is the result of a "concerted family effort" in which the parties shared goals and sacrifices, the non-degreed spouse has an equitable claim for compensation for his or disproportionate sacrifices, efforts and contributions.

This is similar to restitution; the person who earned the degree pays back the other spouse for their support when the degree was being earned. So if you were in medical or law school when married and earned the degree, then were divorced in Michigan at some point, your spouse may be able to be compensated for this personal achievement. An undergraduate degree is not subject to division as a marital asset.

Compensation may be in the form of of a money award or requiring the person with the degree to pay for the other party to acquire a similar degree.

A Michigan court will examine the overall property settlement/spousal support of the case, and just how much the non-degree spouse did during the time the degree was earned; working and supporting the family, taking care of kids etc will all be considered. The money award will be considered a property payment, not spousal support in Michigan. The payment could be lump-sum or in installments

Are personal injury awards considered marital property in Michigan divorces?

It depends on the type of award. A personal injury award for lost income are considered marital property in Michigan, but a personal injury award for pain and suffering is personal to the injured party. Although an award for pain and suffering is marital, a court may take this property into account when dividing the property.

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