In a divorce, the courts have to sort out everything from the failed marriage. One of the most important aspects of a Michigan divorce is property division, specifically Michigan property division.
A divorcing couple should not discount the guidance of a licensed Family Law attorney. Property division laws can be complex, a specific case can get complicated quickly and lawyers have the proper training and experience to tell the judge what a divorcing spouse wants or needs from the property division.
Property Division Divorce Laws in Michigan
The purpose of Michigan property division laws is to make sure that marital property is allocated to each spouse equitably, though not necessarily in a 50-50 split. Michigan marital property is divided under the considerations of Michigan case law but the trial court judge receives great discretion when converting Michigan marital property into separate Michigan divorce property.
Michigan is an equitable distribution state. This means that with regard to Michigan divorce assets, anything the spouses had pre-marriage usually will not be included in Michigan divorce assets or Michigan divorce property. The only property that comes into the court's distribution is that which is legally classified as property of the marriage subject to Michigan case law.
What is considered Marital and Non-Marital Property?
Marital property consists of all items acquired during a marriage as well as separate items that were brought into a marriage and converted into marital property. Michigan law has a presumption that all property acquired by the parties during the marriage is marital property.
Non-marital property is property that each spouse had before the marriage or acquired individually without including it into the marital property. This also includes property the parties agree to classify as separate under a valid agreement.
Ultimately, the trial court will decide which property will be subject to the property division, whether marital or non-marital.
Dividing Assets and Debt
After the court decides which property is available for distribution, the next step is property valuation. The final step is the allocation of marital property.
Under Michigan case law, the court considers a number of factors in dividing assets and debt. Some of these are:
- The marriage's length
- The parties' age & health
- The parties' station in life
- The parties' earning abilities
- Discrepancies between the parties' assets & 1 party's income producing assets
Judges use these factors to decide how a marriage's assets should be divided. Here is a list of the most common property items and the most common allocation scheme used.
- Cash: Divided equitably among the
- Example 1: A joint savings account has $5,000. The court would most likely award the money in an equitable split to each spouse depending on the spouses' circumstances.
- Example 2: A joint savings account has $5,000. One spouse contributed $4,000 and the other contributed $1,000. The amount may be divided in a 50-50 split or in some other way if the $1,000 contributor has fewer assets than the $4,000 contributor.
- Retirement Plans: Divided based on the
duration of the marriage at the time the benefits accrued, looking at the
present value of the plan and/or survivor benefits.
- Example 1: A spouse got benefits in a retirement plan after working for 25 years and was married for 20 of those years. The ex-spouse would be entitled to a portion of the retirement plan that was acquired during the marriage.
- Example 2: A spouse has an unvested retirement plan. No division takes place until the plan is payable to the spouse who has it. It may or may not be considered marital property by the court.
- Vehicles: Divided based on the values as
determined by the court. May be sold or
given to a spouse outright.
- Example 1: A spouse owns a non-operational boat. The boat may be sold with the proceeds to be given to a poorer spouse or divided in a more equitable fashion.
- Example 2: A car has a shared title. The car may be sold with the proceeds divided among the spouses or given to a spouse outright.
- Insurance: Determined based upon each
spouse's health, availability of alternate insurance and premium payments from
- Example 1: One spouse has covered the other under health insurance paid for by marital income. The court may order the first spouse to continue covering that spouse for a set time period or order the first spouse to pay a monetary award to the other spouse for alternate insurance coverage.
- Example 2: One spouse has a life insurance policy where the ex-spouse is to get survivor benefits. The spouse may be entitled to a portion of the benefits or get to remain listed as the beneficiary by court order.
Settling Disputes in a Divorce Case with Property and Asset Division
Under Michigan case law, a property settlement award may not be modified by the court unless there was fraud, mistake or gross inequity by the trial court. However, if the spouses want to modify the terms of the agreement on their own then Michigan courts will not interfere.
The trial court's determinations will not be changed by a higher court unless there is clear evidence of an abuse of discretion.
Help From a Michigan Property Divorce Lawyer
Retaining a Michigan property divorce lawyer is key to getting the fairest result in the property division phase of a divorce. The lawyer can provide professional guidance, keep you informed of likely outcomes and help you present the best arguments and presentation to the trial judge handling the divorce.