When you are getting a divorce, one of your top priorities (especially if you don't have children) will likely be receiving a “fair share” of the family assets and debts. Knowing how Michigan divorce courts divide marital property can help you set reasonable expectations, outline key goals, and help your attorney get you a property settlement that meets your needs.

How Michigan Courts Divide Marital Property

Michigan law requires family courts to divide marital property in a way that is fair and equitable to both sides. As an “equitable property division” state, Michigan law does not require a 50/50 split, but the property division must be fair based on the facts and circumstances of the case. To do this, they apply the following steps:

Step 1: Define What Counts as Marital Property

Before a Michigan family court can divide the marital property, it needs to know what is and isn't included. In general, all assets and debts accumulated between the date of the marriage and the date of the divorce are part of the marital estate. This includes:

• Marital home
• Both spouses' income
• Business interests
• Retirement accounts
• Bank, stock, and investment accounts
• Debts
• Vehicles
• Personal property

But there are some exceptions. Certain property is retained by the spouse who owns it as “separate property,” including:

• Property obtained prior to the marriage
• Inheritances in one spouse's name
• Gifts given to one spouse
• Certain personal injury awards
• Veteran disability benefits
• Property designated as “separate property” in a valid prenuptial agreement

The non-owner spouse is assumed not to have any interest in this separate property unless one of the following occurs:

• The separate property is mixed with marital assets for a common purpose
• The non-owner spouse significantly contributes to the increase in value of the separate property asset
• The non-owner spouse's share of the marital estate is too small to support his or her needs

These reasons can allow the Michigan court to “invade” the separate property and supplement the spouse's share of the marital property to reach a fair and equitable result.

Step 2: Setting Values on Marital Property

It isn't enough for the Court to divide up the parties' physical property. It must also equalize or fairly distribute the values of key assets. Often, divorce trials hinge on establishing the fair market value of assets like:

• Marital home (less the mortgage)
• Business interests (less any business loans guaranteed by the business owner)
• Bank and Retirement accounts
• Pensions

Less often, personal property items such as collectibles, gun collections, or jewelry can have substantial value. However, if the parties do not provide that information to the court, it may simply default to awarding each party the personal property in his or her possession, without realizing the difference in value. That is why you should provide your attorney with a careful inventory of the assets and their approximate value, to identify any valuation issues early, while there is still time to get the property appraised.

Step 3: Make a Fair and Equitable Property Division

The last step to Michigan divorce courts dividing marital property is the division of assets itself. Again, this does not need to be a 50/50 split. Instead, the judge will consider several factors to reach a fair and equitable property division:

• The duration of the marriage,
• Contributions of the parties to the marital estate,
• The age of the parties,
• The health of the parties,
• Life status of the parties,
• Necessities and circumstances of the parties,
• Earning abilities of the parties,
• Past relations and conduct of the parties (including fault), and
• General principles of equity.

This is where working with an experienced trial attorney can help. Your attorney can present evidence on these factors, connecting your circumstances to your financial priorities and proposed property division. Particularly in cases involving fault, or where one spouse is unable to rebuild assets after the marriage, these arguments can be key to receiving a fair settlement that protects your interests, rather than a simple default division of property.

What are Your Options in Dividing Marital Property?

Often, there may be specific property that means more to you than other assets. If you are a caregiver for your children, you may prioritize keeping them in the home where they grew up. If you are a business owner, you may put your interest in your company first. As a veteran or older adult, your priority may be to maintain your retirement assets.

If you are concerned about how the Michigan courts will divide up your assets, your best bet is to reach a settlement agreement with your spouse through mediation or negotiations outside of court. This is because a settlement agreement gives you control over which assets you keep, and what interests you give up in exchange. You generally won't be able to negotiate for significantly more than 50% of the family's net assets, but you may be able to affect where the lines are drawn. If you have clearly communicated your priorities with your Michigan divorce attorneys, they can help you reach a settlement that puts those priorities first, letting you keep what matters most.

Get a Fair Property Division With the Help of a Michigan Family Lawyer

At Bebout, Potere, Cox & Bennion, P.C., we care about you and your family. We help individuals and families in Rochester Hills, Rochester, Troy, Lake Orion, Oxford, Oakland County, Macomb County and throughout Southeast Michigan. We can help you prioritize your assets to meet your financial goals, and negotiate or advocate for a fair and equitable property division you can live with. Call us at 248-651-4114 or contact us here to speak to an attorney.