Whether an asset is marital or separate property can affect the result of a Michigan divorce. This classification is an important step in determining how property, savings and other assets may be divided under Michigan’s equitable distribution laws. Identifying each asset correctly is an important step in the property division process.
Factors courts consider when classifying property in a divorce
Michigan courts review several factors to decide whether an asset is marital or separate property. These factors include:
- When the asset was acquired: Courts usually consider property gained during the marriage as marital property. Property owned before the marriage generally remains separate property.
- The source of the asset: Courts look at how a spouse obtained the asset. Retirement benefits earned during the marriage are generally considered marital property to the extent they accrued during the marriage. Gifts and inheritances given only to one spouse are separate property.
- Ownership records: Courts review deeds, purchase documents, account statements and inheritance records to confirm an asset’s ownership history.
- Financial records: Courts examine bank statements, investment records and other documents to determine whether separate property stayed separate or became part of the marital estate.
A divorce attorney can review asset records and help determine whether property is marital or separate under the law.
When separate property becomes subject to division
Separate property usually remains with its original owner in a Michigan divorce. However, courts may consider these assets during property division in certain situations, including:
- Commingled assets: Separate property may become subject to division if it is commingled with marital assets to the extent that it can no longer be clearly traced as separate property.
- Use of separate funds: Separate funds used to buy, repair or improve marital property may affect how the asset is classified or divided.
- Spousal contributions: A court may consider whether a spouse’s contributions significantly increased the value of separate property when determining whether any portion should be subject to division.
- Need for support: In limited circumstances, Michigan courts may award part of one spouse’s separate property if the marital estate is insufficient for suitable support or if the other spouse significantly contributed to acquiring, improving or accumulating the property.
Clear records help courts determine how separate property should be handled during a Michigan divorce.
Making informed property decisions
Divorce property decisions can affect financial security for years to come. Taking early steps and getting legal guidance can help prevent costly mistakes. A divorce attorney can explain property division issues and help protect your financial interests.