When going through a divorce, it is important to understand the difference between marital and separate property. Separate property is not subject to division at divorce, while marital property is. Therefore, the first and perhaps most crucial part of the property division process is to correctly categorize assets.
Marital property is generally defined as all property that was acquired after the marriage was initiated, except for inheritance and gifts made to one spouse. Assets that were acquired before the marriage, and sometimes the income generated from these assets, will not be subject to the property division process and will, therefore, remain in the possession of the spouse who acquired them.
How are marital assets divided in Michigan?
States fall into one of two categories when it comes to asset division at divorce. Some states recognize community property and as a result, all marital property is divided equally between spouses. Others follow the legal theory of equitable distribution, which involves courts considering many factors to establish the fairest way to divide the property.
Michigan does not recognize community property, which means that assets are divided according to what is considered equitable by the courts. Marital debt is also divided equitably. Therefore, one spouse may gain more than half of the marital debt depending on the specific circumstances. For example, if one spouse is responsible for incurring the debt, they may be considered to be solely liable for it by the courts.
If you are worried about how the division of assets at divorce will affect you financially, you mustn’t delay taking action to build a divorce strategy.