Separation of Assets IAQ: When Divorce Goes SoL

Last month, we did a couple of IAQs — Infrequently Asked Questions — about child custody. We got a little bit of positive feedback about that, so we decided to do a similar short series about separation of assets.  Today, we’re talking about the SoLs — that is to say, Statute of Limitations laws that affect division of assets.

The term “Statue of Limitations” is one we usually think of as related to crimes. We’ve all probably heard several different TV characters mention that there is no Statute of Limitations on murder. But in Michigan, there are Statutes of Limitations that dictate how divorce agreements can be modified. Three of them, in fact.

In general, they almost always end up relating directly to the separation of assets, either because other aspects of divorce are over immediately upon the finalization of the divorce agreement, or because they are attached to other factors such as the age of a child determining the duration of a child support arrangement.

The One-Year Limit on Suits for Divorce Fraud
(We talked in our last post about the difference between a ‘incorporated and merged’ divorce agreement and an ‘incorporated but not merged’ divorce agreement, and we mentioned in that post that we were saving one point for another time. This is that other time.)

When your divorce agreement is ‘incorporated and merged’ with your divorce decree, you sacrifice your right to pursue violations of the divorce agreement as if they were breaches of contract, and you must instead abide by a strict one-year limit on pursuing a case of ‘divorce fraud.’ So if you discover sixteen months after an ‘incorporated and merged’ divorce decree that your spouse kept their secret collection of hundreds of thousands of dollars’ worth of gemstones purchased from HGTV, there’s nothing you can do about it. Five months earlier, and you would have been able to file for divorce fraud and have the decree amended appropriately, but no longer.

The Six-Year Limit on Modifying and Enforcing a non-Merged Divorce Agreement
If your divorce agreement is ‘incorporated but not merged,’ it follows standard contract law. This means that, from the day the divorce agreement is signed, you have exactly six years in which you can go to civil court and file a petition to reopen and modify your agreement. For example, if you discover five years after a divorce that your ex- kept a hundred thousand dollars’ worth of stocks and bonds hidden from the discovery, you have to file a claim in civil court before the six-year limit is over, or you won’t get the chance to amend the agreement to include (and thus correctly separate) those assets.

This Statute of Limitations also applies to the enforcement of a non-merged divorce agreement, so if your ex decides to simply ignore some part of the agreement seven years after it was signed, there’s nothing you can do about it.

The Ten-Year Limit on Enforcing the Decree
The final Statute of Limitations applies to both of the situations above: unless otherwise specified, exes have 10 years to enforce the execution of a judgment of divorce. Note that, as our last post explains, the judgment of divorce is generally limited to spousal and child support arrangements and custody agreements. So while they can get away with violating the terms of a non-merged divorce agreement after six years, the divorce decree lasts four years longer.

In Conclusion, Your Honor,
Every divorce is different, and there’s no single ‘right’ answer as to whether or not to merge your divorce. Sacrificing four years of ability to enforce the divorce decree in order to obtain five more years of ability to modify the divorce decree isn’t an obvious decision for most couples. Gucciardo Family Law can help you understand why one path may be right for you — give us a call.