Laws governing division of marital property in divorce vary from state to state. Michigan law requires an equitable, or fair, division of property between the spouses. Some couples are able to agree on their own about how to divide everything, while others seek the help of attorneys or a mediator to negotiate a settlement. Couples who don’t manage to resolve property issues outside of court will end up going to court to ask for a decision from an arbitrator or a judge, who will consider all relevant factors, including:
- length of the marriage
- past relations and conduct of each spouse
- each spouse’s age, health, and life status
- each spouse’s earning ability
- each spouse’s needs and circumstances
- each spouse’s contributions to the marital estate, and
- general principles of equity.
There is no set formula for application of the factors. Michigan law requires a judge to consider all relevant circumstances. For example, a judge may base an unequal division of property on spousal misconduct during the marriage, but only as one among all of the factors to be considered.
Learn more about Divorce in Michigan.
Marital Property and Separate Property
Marital property includes all assets and debts a couple acquires during marriage. Property is separate if a spouse owned it before marriage or acquired it during marriage by gift or inheritance. Separate property is not ordinarily subject to division in divorce, but judges in Michigan do have the option to include separate property if the judge determines the other spouse really needs it.
By deemphasizing the distinction between separate and marital property, Michigan law recognizes that in many cases it is difficult to determine what property is marital and what property is not. Marital and separate property can become mixed together—sometimes called “commingling.” For example, a premarital bank account belonging to one spouse can become marital property if the other spouse makes deposits to it, and a house owned by one spouse alone can become marital property, at least in part, if both spouses pay the mortgage and other expenses. If the spouses aren’t able to decide what belongs to whom, the judge will have to decide whether or not fairness requires treating any property as the separate property of only one spouse.
After determining which property is marital property, the couple, or the court, will generally assign a monetary value to each item. Couples who need help determining values can hire professional appraisers. Some financial assets, such as retirement accounts, can be very difficult to evaluate and may require the assistance of a financial professional, such as a C.P.A. or an actuary.
Dividing the Property
Spouses can divide assets by assigning certain items to each spouse, possibly with an equalizing payment if one spouse gets more than the other, or by selling property and dividing the proceeds. They can also agree to continue to own property together—this isn’t a very attractive option for many people, as it requires a continued relationship, but some couples agree to keep the family home until children are out of school. Others may keep investment property in hopes it will increase in value.
The couple must also assign all debt accrued during the marriage, including mortgages, car loans, and credit card debts, to one of the spouses.