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What Does “Equitable Division” Mean In Michigan Divorces?

What Does “Equitable Division” Mean in Michigan Divorces?

When you’re going through a divorce, you’ve got enough on your plate. But you still need to know about key legal terms that can shape your future, like “equitable division.” The Macomb County property division lawyers at Mihelich & Kavanaugh, PLC can help you understand this critical legal term and what it means for your divorce.

“Equitable Division” vs. Community Property

When it comes to divorces, not all states handle the division of property the same way. Generally, states follow either the “equitable division” or the “community property” model. Michigan adheres to the equitable division approach.

Equitable Division: Fair but Not Always Equal

In Michigan, “equitable division” or equitable distribution means that a couple’s marital assets are divided fairly but not necessarily equally. It’s a flexible approach that allows the court to consider various factors, such as the length of the marriage, each spouse’s financial situation, and contributions to the marriage. This could mean that one spouse gets more than the other, but only if the court believes it’s fair under the circumstances.

Community Property: 50/50 Split

In contrast, many states that follow “community property” laws divide marital assets right down the middle—50/50. All assets acquired during the marriage are considered owned by both spouses equally.

Marital Property vs. Separate Property

Michigan law puts a married couple’s assets into two broad categories: marital property and separate property. But what does that mean for you if you’re facing a divorce in Michigan?

What Is Marital Property?

Marital property is assets acquired or earned during the marriage. It doesn’t matter who made the purchase or whose name is on the title; if it was acquired while you were married, it’s generally considered marital property. Under Michigan’s equitable division principle, these assets will be fairly divided between spouses during a divorce. Examples of marital property include:

  • The family home purchased after marriage
  • Jointly-owned vehicles
  • Bank accounts opened or contributed to during the marriage
  • Investments made while married

What Is Separate Property?

Separate property, on the other hand, is anything you brought into the marriage or acquired individually during the marriage through inheritance or personal gifts. Separate property is generally not subject to division in a divorce, meaning the original owner keeps it. Examples of separate property include:

  • Personal gifts, like a necklace from a family member
  • Inheritance money received during or before the marriage
  • Property owned before the marriage, such as a car or a house
  • Any assets explicitly kept separate through a prenuptial or postnuptial agreement

Why It Matters

In Michigan, the focus is usually on equitable division of marital property. However, the courts can consider separate property as a factor when deciding what’s fair. For example, the lines can blur if one spouse’s separate property significantly benefits the marriage or if marital funds are used to improve separate property. This is why understanding the difference between marital and separate property is crucial—the designations affect how the courts divide your assets.

Factors That Impact Property Division in Michigan Divorces

Dividing property during a divorce is rarely straightforward, especially under Michigan’s principle of equitable division. The courts weigh multiple factors to determine what counts as a fair division of marital assets. Knowing these factors can help you prepare for what lies ahead. Some crucial factors courts consider when dividing marital property include:

  • Length of the marriage
  • Each spouse’s contributions to marital property
  • Each spouse’s financial situation and needs
  • Each spouse’s earning capacity
  • Conduct or fault of the parties involved
  • Age and health of each spouse
  • Life circumstances of each spouse at the time of divorce
  • Retirement benefits and pension of each spouse
  • Spousal support considerations
  • Value of the marital property
  • Liquidity of the marital property
  • Tax consequences for each spouse

The best step to protect your share of marital assets during a divorce is to hire a knowledgeable attorney. Mihelich & Kavanaugh, PLC have decades of legal experience and know what’s at stake for you. Call (586) 776-1700 or complete our contact form for a free consultation.

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