What is Separate vs. Marital Property in a Michigan Divorce?
The yours, mine, and ours might not matter much while you’re married. When you’re involved in an active union, both parties share the wealth, so to speak. It’s only when a couple decides to divorce (or one spouse files for divorce) that
the ownership of assets and debts becomes important. Before the divorce process is complete, a couple must determine division of property, or who gets what coming out of the marriage.
This can be difficult to determine. Ideally, spouses will reach a fair and equitable agreement on their own and the court will accept it. Unfortunately, spouses may have different ideas about who should get what, and one or both may argue that certain property does not qualify as marital property. What is marital property and what is considered separate? Here’s what you should know when attempting to divide property in a Michigan divorce.
What is Marital Property?
Marital property is characterized as any income or assets the couple accumulates during the course of the marriage. Once you marry, most gains or purchases from that point on are considered marital property, and these assets belong to both parties, regardless of who is responsible for bringing them into the marriage.
If you are the stay-at-home parent or homemaker, for example, you might worry that division of property will leave you with nothing because you contributed no tangible assets to the marriage. This is not the case. You contributed to the marriage in other ways and all wealth and assets contributed to the marriage are shared, regardless of which party was the source. If one spouse earned $100,000 and the other earned $10,000, each spouse would be entitled to $55,000, just as an example.
Marital property could include all kinds of wealth, such as income, bonuses, deferred payments, pensions (if they were granted or accumulated during the course of the marriage), annuities, investments, and more. It will also include any assets purchased with this wealth.
What is Separate Property?
Separate property includes certain wealth and assets owned by one party prior to marriage. It could also include wealth or assets inherited by one party or gifted to one party before or during the course of the marriage. If, for example, one party has a trust fund going into the marriage, or receives an inheritance from a deceased relative during the course of the marriage, an argument could be made that this wealth is separate and should not be included in division of property.
Can Separate Property Become Marital Property?
Separate property could become marital property if it is treated as marital property prior to divorce. If one spouse receives an inheritance of $50,000 and places it in a shared bank account, after which both spouses use the money, it has effectively become shared, marital property. If, on the other hand, the receiving spouse places that money in a separate account and doesn’t touch it, it will likely be considered separate property at the time of divorce.
If you are concerned about property division during a divorce, don’t hesitated to seek the advice and assistance of the qualified attorneys at The Gucciardo Law Firm by calling 248-723-5190 today.
Too much information?
We focus exclusively on family law matters so we are always available to answer your questions and help.