One of the most complicated aspects of divorce is the division of marital property. Michigan is an equitable distribution state, meaning that all qualifying property will be divided “equitably”, or fairly. It is important to remember that in this instance, “fairly” doesn’t necessarily mean “equally.” If the couple cannot come to an agreement regarding property division, the court is required to divide the marital assets after taking several factors into account to determine what exactly is fair.
Marital vs. Separate Property
Marital property includes, but is not limited to, assets like the following:
- Property that the couple purchased together
- Retirement benefits earned during the course of the marriage
- Each spouse’s income during the marriage period
Separate property, which is not subject to Michigan’s equitable distribution law, includes:
- Property obtained by either spouse prior to the marriage
- Inheritances received by one spouse
- Personal injury awards
- Gifts provided to one party
In some instances, property that was originally separate can be treated as marital for distribution purposes. For example, a bank account owned by one spouse while still single is separate property unless the other spouse also started using it to deposit their paychecks, pay bills, etc. Then, a judge may conclude that the account has been “commingled” and become part of the marital estate. If any item of separate property has increased in value during the marriage, that added value is also subject to equitable distribution.
How do Michigan courts determine what is ‘equitable’?
When determining how to divide marital property equitably, courts will consider factors like the following:
- The duration of the marriage
- The age and health of each party
- Whether or not spousal support has been awarded
- Whether or not the divorce has caused one party to lose access to health insurance or a pension
- Any contributions one spouse made to support the career of the other
- The likely financial state of each party in the future
- Whether either spouse wastefully and deliberately dissolved marital assets
Equitable distribution ultimately aims to divide marital property in a fair manner, in order to ensure that each party receives a just outcome in a divorce action.
Divorcing couples can always opt to reach their own agreement on how marital property will be divided. This way, a court-ordered distribution will be bypassed and the marriage can end on a more amicable note.
Whether you and your spouse intend to settle property division matters out of court or let a judge make the decision for you, it is important to have an experienced family law attorney on your side. Melissa Pearce & Associates, PLC will ensure that you understand your rights and help you to reach a favorable outcome, whether privately with your spouse or at trial.
~Originally published in October 2016~