What Exactly Is “Marital Property” in Michigan Divorce Law?

One of the major portions of a divorce proceeding is the division of assets. As a part of that process, the court is obligated to first create three categories of assets to be divided: a separate property pile for each spouse, and the “martial property” pile. Each separate property pile usually goes entirely to the spouse it belongs to, and as such, only the marital property really gets divided. As you can imagine, in some divorces, the categorization of some assets as ‘marital’ vs. ‘separate’ can mean a swing of hundreds of thousands of dollars toward one spouse or the other, so this is no trivial distinction.

So what exactly is martial property?

‘Rule Zero’ Applies
The ‘Rule Zero’ of divorce law is simply this: the judge has the final say in almost all matters. If a judge decides that a specific asset is or isn’t marital, you are obligated to heed that decision unless and until you successfully appeal the judgment — so don’t go assuming that anything written below is absolutely 100% certain. A judge could always decide differently.

In Opposition to Separate Property
It might be helpful to define the less-confusing notion of ‘separate property’ first. Separate property, by default, is any property that:

• Was owned by one spouse prior to the marriage,
• Was inherited by one spouse, and/or
• Was gifted to one spouse in particular, and also
• Was not ‘commingled’ — as in, the property was maintained as a separate item by the spouse who received it.

So, for example, if you inherit $100,000 from a deceased aunt, but you turn around and put that money straight into your joint bank account where it joins $4,000 and is added to and spent from for a few months before the divorce is filed, that money has been commingled, and it no longer retains its ‘separateness.’

Assets Acquired During the Marriage is Considered Marital Property…Mostly
Anything the married couple accumulates while married is considered marital property unless a specific exception applies. It doesn’t matter which spouse paid for the asset, which one participated in its maintenance or growth, or which one complained about having it around the house — if you were married when a specific thing was obtained, that thing is martial property by default.

Importantly, when it comes to money in specific, the current precedent in the state of Michigan is that the date money was earned is the relevant one — so if you sell a car in January and allow the buyer to pay you in 12 monthly amounts, your divorce in June doesn’t mean you get to pocket 100% of the payments between July and December.

Marital Intent: A New Precedent
Recently, there has been a tendency — though not an explicit ruling — that married couples that show evidence of intentionally keeping some assets divided should have those intentions honored. So if you and your wife both agree that you alone are going to pay for, maintain, and use the boat you fish in, and your wife acknowledges that arrangement, the courts are likely (though not assured) to heed it.

The Big Exception: Invasion
Far and away the most common (really, very nearly the only) reason that a separate asset is given to the spouse is does not belong to is called “invasion,” and it refers to the practice of using a separate asset to assist a spouse who is economically completely unready to live alone. If you are a hedge fund manager and your husband has been out of the workforce and tending to your home for the past few years, you can fully expect that the court will be willing to invade a portion of your separate property should there be too little marital property to get your husband safely to the point that he can re-establish himself.