Is Michigan a Community Property State? How is Property Divided in Divorce?
Is Michigan a community property state, and how are assets divided in the event of a divorce? Community property is a term used to describe states where marital assets and debts are divided equally. Michigan is not one of those states, and in this state, the Court divides marital property on an unequal basis when necessary. This can result in disparities between what each spouse receives in their divorce case, but it may also be more equitable for some couples than if all the marital assets were divided equally.
What is a Community Property State?
The laws that govern the division of marital assets in divorce vary from state to state. Community property states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
These States generally consider each spouse joint owner of all acquired during a marriage. This property is deemed to be marital property divided equally or 50-50 between the two parties by the family law Court.
These community property states also divide the debts equally between the spouses. All of the debt is divided equally.
Attorneys practicing in these family law courts assist the parties to the divorce in making these property divisions. They help in determining the market value of the property acquired during the marriage.
Is Michigan a Community Property State?
A question often asked is, “Is Michigan a Community Property State?” No. Michigan divides marital property using the theory of “equitable distribution.” Community property states attempt to distribute the property as close to a 50-50 split as possible.
Michigan divides property using the “equitable distribution” method. The law states that property is divided equitably to equalize any disparity in marital assets and liabilities between spouses.
Equitable distribution states divide property based on what seems fair and just under certain circumstances in each case, not necessarily an equal one: for instance, if there is only one child or another unique event that would dictate otherwise, even though it may seem unfair from an outside perspective.
A family law attorney can help the spouses determine what property is marital and what property is separate. As an equitable distribution state, these determinations are critical. When a divorce is filed in Michigan these determinations are made.
Michigan is an “Equitable Division” State
Michigan is an equitable division state. So the answer to “Is Michigan a community property state?” is no.
This means that the marital assets and liabilities are divided equally between spouses in the event of divorce. The family law court will decide as to what is separate property and what is marital property.
Property is not automatically split 50/50, but rather the Court determines an equitable division based on factors such as each spouse’s contribution to the acquisition of property, duration of the marriage, income levels and earning capacity, age, and health of parties.
Marital property laws in Michigan are very complex and can be challenging to understand. This is because, unlike community property states, marital property is not divided equally between spouses. Property division attorneys are essential to help classify what is separate property and what is not.
What Are the Divorce Laws in Michigan Property?
In a Michigan divorce, the law regarding property division states that all property acquired during the marriage is marital property. Separate property is a property not subject to property division in a divorce case.
Michigan divorce laws about property distribution classify items as either “marital” or “separate.” Having property division attorneys can ensure your spouse does not receive more property than they are entitled to.
Marital Assets are assets accumulated during the marriage as opposed to Separate Property
Generally, a marital asset is subject to division while separate property is not. When dividing up properties, courts need first determine whether the property is separate property or not.
The typical example of a marital asset is the house you’ve owned and lived in for years because it’s usually purchased during your marriage (or at least partly paid off).
However, other examples would be household goods like furniture and kitchenware; automobiles acquired jointly during the relationship; bank accounts opened together before filing for separation; retirement plans such as 401k’s401k’s set up with both spouses’ contributions over time – even if one spouse has contributed less than half due to wage differentials between them.
Separate property is a property that is not subject to Equitable Distribution
Separate property is a property that is not subject to equitable division. “Separate property” can refer to either real or personal property – meaning anything from houses and land, cars and furniture to retirement accounts set up by one spouse before the relationship.
Separate property can also include an inheritance, a personal injury settlement, or even gifts. There are considered “separate property” because one spouse acquired them before the marriage; these can include gifts and inheritances.
Factors influencing the Equitable division of property
Specifically, the assets most often categorized as community or marital property include real estate, business investments, income, debts, and items like furniture and even pets.
There are several factors that the judge will consider before deciding the property division of these items. Having property division attorneys help to determine what is separate property and what is not is crucial. Some of these factors the family law judge will consider include:
How long were you and your spouse together?
The Court takes into consideration the length of the marriage. If you and your spouse were married for 20 years, the Court might award you more property than if you had been married only six months.
What is each of your incomes and debts and those of your spouse?
The Court also recognizes financial contributions and potential future earnings or debt obligations that both parties would have incurred had they remained a couple.
The financial standing of you and your spouse?
In the event of an impending divorce, it’s important to ask both spouses about their current financial standing.
When dividing marital property, courts consider many factors such as the length of the marriage and the age and health of each party?
Property division is generally made in a way that is equitable under all these circumstances.
The actual amount you contributed to your marital property?
The courts will look at the actual amount you or your spouse contributed to the marital property.
General Ideas of Fairness and Equity
The Court will also look to general principles of fairness and equity to determine an equitable property division. If there is a more significant fault for the divorce on one of the spouses, that spouse may receive less of what is considered marital property.
Assessing fault for the divorce and its impact on the equitable division of property
The Court will consider any adverse actions committed by either party that contributed to the end of your marriage. This includes extramarital affairs, domestic violence, or gambling debts. A spouse at fault for causing the divorce can receive fewer assets after the divorce.
Considering how this doctrine can impact one spouse, it is imperative if this is an issue to call upon experienced property division attorneys for guidance.
Who gets the house in a divorce in Michigan?
The easiest thing for the divorcing couple to do regarding an equitable distribution is to sell their assets and divide their proceeds. If only one spouse wants that option, they’ll have to ask a judge if they can order something like this through.
However, there isn’t any guarantee that will happen; judges are left with discretion on these sorts of things. Property division attorneys can put your best case forward to get this order.
Another option is for one spouse to buy out the other spouse. If a couple has enough joint assets, one spouse can buy out the other’s interest in their home.
This is done by having one of them keep ownership and letting the other spouse take more from their share to make it an even tradeoff for both parties involved. Determining the market value of the assets is a value in hiring a family law attorney.
However, if this cannot be achieved, there are alternative ways that either spouse with fewer asset rights could purchase some or all of what they’re entitled to without selling off anything else. The spouse being bought out could pay less in alimony or child support, for example, in exchange for a portion of their equity share.
Is an inheritance considered marital property in Michigan?
The inheritance is not subject to equitable distribution because it belongs solely to the spouse who receives and inherits. This means that any inheritances acquired during a marriage cannot be divided between the spouses in divorce proceedings but are treated as separate property belonging exclusively to whoever inherited them.
An inheritance received during the marriage can take on a different legal status depending on where it is deposited and how it was used in that jurisdiction. For instance, if funds are put into a joint account before being spent, a spouse may lose their separate property designation (depending upon state law).
Likewise, if assets were used to make repairs or improvements to your primary home-even, just some final touch-ups for curb appeal-they too could be deemed a marital asset instead of separate property.
If you inherit property and want to keep it a separate asset from your marital assets, make sure it is not commingled with your spouse.
For example, don’t deposit an inheritance into a joint bank account or use it for ordinary expenses like renovations on your primary residence because this may change how much of the asset is treated as separate property under state law.
How is debt divided in a divorce in Michigan?
Courts typically divide the debt accrued during marriage by applying an equitable distribution principle that is also used for dividing marital assets. This means that debts should be divided fairly, but not necessarily equally, with each spouse taking only half of it as their fair share.
The courts will likely consider a variety of factors when determining how to divide finances. This means that even if one spouse didn’t work, that spouse might not suffer financially as long as their time was devoted elsewhere. In cases where debt division comes into question, the Court can determine which spouse contributed more toward acquiring said debts and then distribute them accordingly.
Your divorce agreement establishes a legal obligation for debt repayment, but creditors may still have claims against both spouses. This means that an ex-spouse’s failure to pay debts can impact your credit score. Property division attorneys can help.
Michigan divorce laws regarding pensions
In a divorce, laws are dealing with a division of pensions and other retirement accounts in Michigan. Pensions are usually part of the equitable distribution as they are accrued during the marriage by a spouse or both spouses.
Equitable distribution means that it is fair and just for both parties involved in the divorce.
Pension rights vary from state to state, but Michigan’sMichigan’s laws provide specific guidelines on what should happen with pensions and other retirement accounts during a divorce proceeding. The law states all pension benefits earned under the marriage are subject to division.
Call a Divorce Attorney to Review your property division rights today!
Your marital assets are not always divided equally in Michigan. Separate property does not have to be included in the property division in your case.
Whether you are considering a divorce or have been served with papers by your spouse, it’s essential to know how the property division law applies to your situation and what steps you need to take next.
Our team of experienced attorneys can help guide you through this process so that you understand your rights and benefits under Michigan law. Call us today for free legal consultation.
Bruce Law Firm has property division attorneys that can help you through your divorce.