What you should know about separate property in Michigan
If you are getting divorced, chances are you have already considered the division of your property. Dividing assets is one of the greatest conflicts in a divorce, so it is wise to be prepared and understand how the process works. Michigan is an equitable distribution state, which means that the division of property should be objective and balanced.
It is also important to know that there are two types of property in a marriage: marital and separate. Knowing what qualifies as separate property can greatly affect how much you end up with in your divorce.
What is Separate Property?
While marital property is the property that a couple acquires during a marriage, separate property belongs to just one person. Separate property is usually that which one person owned prior to getting married, property obtained during the marriage by gift or individual inheritance, or property earned after the divorce judgment is entered. Additionally, the following are some other items that Michigan courts recognize as separate:
- Stock plans and options that are not yet vested or matured can often be considered separate property.
- Any interest, dividends or gains you received on property, assets or financial accounts that are separate property are counted as separate assets.
- Social security benefits are recognized as separate property. It is worth noting that they could be considered marital when factored into child support and alimony.
While marital property is eligible for division, separate property typically stays with the person who owns it. Of course there are exceptions including whether the non-owning spouse would be unable to support him or herself with a settlement that does not include the separate property. Another complexity is when separate property becomes marital property or if it contains both separate and marital elements.
When Does Separate Property Become Eligible for Division?
Usually, property that is determined to be separate cannot be taken by the other spouse. Like many aspects of divorce, there are exceptions. Assets that are considered the separate property of either party can become marital property when it is commingled. Ways in which commingling can happen include individually inherited or gifted money that is put into a joint bank account or property that a non-owning spouse helped acquire or improve.
Additionally, if the other party is able to prove that the marital property awarded to them is insufficient and that they require additional separate property as a means of support, the courts may decide to grant that division.
How To Keep Separate Property Safe?
Often when property is first acquired, couples are not anticipating the possibility of divorce. The most common way of keeping property separate is to enter into a prenuptial or postnuptial agreement in which both parties agree that certain property will remain separate. It is worth considering that property division does not necessarily need to go through the courts, and couples can attempt to reach an agreement about what is marital and what is separate. Unfortunately, asset division often becomes heated and requires legal arbitration.
Deciding how to divide your property when you go through a divorce can be difficult. If you need help dividing marital and separate property, or simply have questions, contact the experienced attorneys at The Gucciardo Law Firm. We can help protect your interests in a divorce.
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