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Navigating Property Division in Michigan Divorce Cases

| Feb 28, 2024 | Divorce, Family Law

Divorce is a complex and emotionally charged process that involves various legal considerations, one of the most critical being the division of marital property. In Michigan, like many other states, property division follows the principle of equitable distribution. This means that assets and debts acquired during the marriage are divided fairly, though not necessarily equally, between the spouses.  Dividing the property is a three-step process.  Step one is categorization; Step two is distribution; and Step three is invasion of separate property.

Before equitable distribution of property can begin to take place, assets must be categorized into two main types: marital property and separate property. Marital property includes assets and debts acquired during the marriage, regardless of whose name is on the title. Separate property, on the other hand, comprises assets owned by either spouse before the marriage or acquired through inheritance or gift during the marriage.  In these circumstances, those assets must not be commingled with marital assets – in other words, they must be kept separate from marital assets. Once property is categorized as separate property, it is taken off the table for equitable distribution.

Common types of marital assets include real estate, financial assets, personal property, and business interests.  However, it is not just assets that get equitably distributed, marital debt is also considered and distributed in this process as well. This can include mortgages, credit card debt, and other types of debt.

After each asset and debt has been properly categorized, parties can then begin to distribute property equitably.  In order to determine equitable distribution, Michigan courts consider many factors.  Some of those key factors include the source of the property, contribution toward acquisition, length of the marriage, and several other factors.  Although there are many factors the court considers when dividing property equitably, not all factors are relevant for every case, nor do all factors carry the same weight for each case. Another factor commonly argued is the fault for the marriage breakdown.  To give fault some weight in determining equitable distribution, the fault must be tied directly to the property.  For example, if one of the parties is an alcoholic and uses marital assets to feed the alcoholism, then the offending spouse could receive a reduced amount to compensate the non-offending spouse for the breakdown of the marriage.

Finally, the last step is the invasion of separate property. By this point, all assets and debts have been categorized into marital and separate property and all marital property has been equitably distributed.  Invasion of the separate property allows the non-owning spouse to reach into the separate property and bring it back into the marital property category to be equitably distributed.

There are two main avenues used to invade separate property. The first is need-based reasoning; the second is the non-owning spouses’ contribution, acquisition, improvement, or accumulation of assets.  For need-based, the court would have to find that all other assets awarded to the non-owning spouse were insufficient to provide adequately.  However, in order to better understand the second invasion avenue, let’s consider this example.  A husband and wife get married and prior to their marriage the wife started, owned, and ran a very successful business.  During the course of their marriage, the husband never became an owner and the business was otherwise kept separate from marital property.  Despite this, the husband became involved with the business and due to his involvement, the business grew 4 times more profitable than what it was without him.  Although the husband is not entitled to any distribution of the business because it is categorized as separate property, he is likely able to invade the separate property to bring it back into the discussion for equitable distribution because he contributed to the improvement of the wife’s business.

Navigating property division in Michigan divorce cases requires a thorough understanding of the legal principles governing equitable distribution. Parties involved in a divorce should seek legal advice to ensure their rights and interests are protected. While the process can be challenging, a fair and equitable resolution can pave the way for a more stable financial future for both parties post-divorce.


Jesse Bergwerff