A large part of going through a divorce is separating a couple’s property between the two spouses. During this process, the property is broken down into two main categories: marital property and separate property. Spouses who are going through this time in their life should understand the differences between the two, as it can impact their future in various ways. Continue reading below and reach out to an experienced Michigan divorce attorney to learn more.
What is Marital Property?
Marital property is simply the assets that a couple acquires throughout the duration of their marriage. This can include a variety of assets such as a home, automobiles, certain joint financial accounts, family heirlooms, and more. During a divorce, these assets can be divided between the two partners while assets that were acquired before the marriage typically are not. While this is true, it is important to know that there are some exceptions to this that can or cannot subject other assets to distribution. This can include the following:
- Usually, gifts are not considered marital property, even if they were acquired during the marriage. However, if the gift was enhanced during the marriage, it may be subject to division.
- Retirement accounts that were held before the marriage may be subject to distribution if they were contributed to by both spouses throughout the marriage.
- Property that is included in a prenuptial agreement, postnuptial agreement, or cohabitation agreement that was deemed as marital property can be subject to distribution, even if it was acquired before the marriage.
- Trust funds, inheritances, and other assets that were gained through intestate succession are not considered marital property.
What is Equitable Distribution?
The state of Michigan is an equitable distribution state. This determines how a couple’s assets are divided between the two of them during a divorce. Many people believe this is an equal division of assets. However, this is not always the case. Just because an asset is considered marital property does not necessarily mean that a spouse will receive half of it.
The process of equitable distribution uses a formula to determine the assets that each spouse is entitled to. This provides spouses with a fair and just division of assets based on their marriage. A key factor in understanding which assets belong to which spouse is their contribution towards the assets throughout the marriage. This may either be a financial contribution or time invested in the assets. Another factor is if the non-owning spouse caused an increase in the asset’s value. Certain situations such as these may call for the asset to be considered marital property, depending on the case.
Contact our Firm
Sometimes, divorce, family, and estate matters are difficult to navigate. Fortunately, they do not have to be with the assistance of a compassionate, knowledgeable attorney who is willing to guide you every step of the way. If you need a seasoned firm to help you with any divorce, family or estate-related matter, please do not hesitate to contact Collis & Griffor today to schedule a consultation.
