Is Michigan a Community Property State?

When you get married, what happens to your assets? Just as importantly, what happens to those same assets if you get divorced? The answers to those questions depend on whether you live in a community property state. Michigan is not a community property state, which means that the answers to these questions are complex.

Equitable Distribution

In a community property state, when you get married, all of your assets become joint property belonging to your marriage. And if you eventually get divorced, the court attempts to divide your assets as equally as possible between you and your ex-spouse.

However, in an equitable distribution state like Michigan, the rules are different. To begin with, when you marry, your assets are considered to still be individually owned unless both parties agree otherwise. Thus, if you owned a house, for example, you would still be considered the full owner at the time of your divorce.

Some assets may be considered marital property if they were acquired during the marriage and were considered joint property. For example, if you and your spouse co-signed a mortgage for a vacation home, you would both be considered part owners of the property.

What the Courts Do During Divorce

Divorce can be complicated in Michigan when there isn’t a prenuptial agreement or both parties can’t agree on how to distribute their assets. In this situation, the courts need to unravel financial situations to determine how assets are distributed.

The goal of the court is to determine which party owns every single asset. If there is a clear owner, that person will almost always keep that asset in the divorce.

When an asset belongs in total or in part to both parties, the court must decide who receives it in the divorce. The court is not required to divide such assets evenly. Instead, it attempts to make decisions based on what is fair. Fairness takes into account several factors, such as:

• How the asset was acquired
• Contributions each party made to acquiring the asset
• The length of the marriage and how long the asset was jointly owned
• Age of both parties
• Health of both parties
• Each person’s income
• Earning potential of each person
• Potential impact on children

Even if one party paid the lion’s share toward acquiring an asset, the other party might still receive it if other factors make that distribution fair. Similarly, gifts might return to the gifter if they were family heirlooms.

Because the process tends to be complicated, attorneys for both parties will present suggestions to the court. Typically, the court will support anything both parties agree to, but occasionally, a judge will overrule even that agreement.

Consult with Experienced Family Law Attorneys About Property Laws

With any luck, you will never need to understand the divorce laws in Michigan. But that doesn’t mean that you shouldn’t take precautions. Consult with an attorney about property laws before you get married so that you aren’t caught off guard if the worst happens. Contact Gucciardo Family Law today to learn more.