Marital Assets in Michigan: What You Need to Know

Understanding what constitutes marital assets in Michigan is crucial for anyone going through a divorce or planning for the future. Michigan follows the principle of equitable distribution, which means that in the event of a divorce, marital assets are divided fairly, though not necessarily equally, between both parties. However, the key to this process lies in determining what exactly falls under "marital assets."

The Suspense of Property Division: What Will You Keep?

When couples in Michigan face the difficult decision to divorce, the most pressing concern often revolves around which assets are considered marital property and how they will be divided. The uncertainty around what stays and what goes creates a lot of stress, making it vital to understand the basics. So, what exactly are the marital assets in Michigan?

Defining Marital Assets

In simple terms, marital assets are any property or financial holdings that were acquired during the marriage. This means anything obtained by either spouse after the wedding day, whether it's real estate, vehicles, bank accounts, investment portfolios, or even debts, could potentially be classified as a marital asset. But it’s not always that straightforward. Items obtained before the marriage, as well as certain types of gifts and inheritances, might not be included unless they were commingled with marital property. This is where things can get complicated and why legal guidance is often required.

Real Estate

One of the biggest and most contentious types of marital assets is real estate. This usually includes the family home, rental properties, or vacation homes acquired during the marriage. If a house was purchased before the marriage but payments were made during the marriage, this can muddy the waters, as contributions from both parties make it subject to equitable division.

Financial Accounts

Bank accounts, retirement funds, and investment accounts can also be considered marital assets. If both spouses contributed to a 401(k), for example, even if the account was started before marriage, those contributions and their associated growth during the marriage are generally seen as marital property.

Business Assets

In some cases, one or both spouses may have started a business during the marriage. If this is the case, the business, its assets, and even its future profits could be subject to equitable division. Even if the business was started before the marriage, any growth or profits earned during the marriage may still be considered marital property.

Personal Property and Debts

Beyond big-ticket items like homes and businesses, personal property such as furniture, cars, jewelry, and art collections are also part of the marital assets equation. Additionally, any debts, including credit card debt or student loans incurred during the marriage, could also be treated as marital liabilities that need to be divided equitably.

Non-Marital Assets

Now that we've explored what qualifies as marital assets, it's also crucial to understand what doesn’t fall into this category. Non-marital assets typically include property or assets acquired before the marriage, gifts received by one spouse (as long as they weren't shared), and inheritances that weren’t commingled. However, if any of these non-marital assets were used in ways that benefited both spouses, they might be reclassified as marital assets.

The Importance of Commingling

One of the most complicated aspects of determining marital vs. non-marital assets comes down to commingling. This term refers to the act of mixing non-marital assets with marital ones, making it difficult to distinguish between them. For example, if one spouse received an inheritance but deposited that money into a joint bank account and used it to pay for household expenses, it may no longer be considered a separate asset. This act of commingling can lead to the inheritance being split between both spouses during a divorce.

Michigan's Approach to Equitable Distribution

Michigan uses the principle of equitable distribution when dividing assets, but what exactly does this mean? It’s important to note that equitable doesn’t always mean equal. Instead, Michigan courts aim to divide assets in a way that is fair, based on various factors such as:

• The length of the marriage
• The contributions each spouse made (financial or otherwise)
• The age and health of both spouses
• Each spouse's earning potential
• The overall financial situation of each party

Contributions: More Than Just Money

In evaluating how to divide marital assets, Michigan courts also consider the non-financial contributions made by each spouse. For example, if one spouse stayed home to care for the children or managed the household while the other worked, this is a factor in determining a fair division. These contributions are seen as equally important to the marriage and are often considered when deciding what’s "equitable."

The Role of Prenuptial Agreements

Another crucial aspect to consider when discussing marital assets in Michigan is the potential impact of a prenuptial agreement. If both spouses entered the marriage with a legally binding prenuptial agreement, it might override Michigan's equitable distribution rules, as long as it is deemed fair and was created without coercion.

Why Some Prenups Don't Hold

However, not all prenuptial agreements are ironclad. If a court finds that a prenuptial agreement was signed under duress or that one party didn’t fully disclose their financial situation, the agreement may be thrown out. In such cases, the court will default to Michigan’s standard equitable distribution process.

Strategies for Protecting Assets

To avoid the often lengthy and emotional process of dividing marital assets in Michigan, some couples take steps to protect their individual property before getting married. Aside from creating a prenuptial agreement, strategies include keeping assets separate, avoiding commingling, and maintaining clear records of individual contributions to any shared property or assets.

What Happens if You Can’t Agree?

If both spouses are unable to reach an agreement on how to divide their marital assets, the court will step in. In this case, a judge will evaluate all the assets, debts, and contributions from both parties and decide how to divide them in a way that’s deemed fair. This can often be a lengthy and costly process, making it in both parties' best interest to come to an agreement on their own whenever possible.

Conclusion: The Final Word on Michigan Marital Assets

Navigating the division of marital assets in Michigan can be complex, especially when it comes to differentiating between marital and non-marital property. Commingling, business assets, and non-financial contributions further complicate the process. For anyone facing this situation, understanding Michigan’s equitable distribution laws is critical. Legal advice is often necessary to ensure a fair and just outcome, whether through a court decision or an agreement between both parties.