Married couples may have spent years or even decades accumulating assets such as the family home, automobiles, electronics and furniture. What they may not have anticipated when purchasing these items, however, is that they will one day divorce. However, divorce is the reality for many couples in Michigan. When divorcing, couples may wonder what will happen to all those assets they amassed over the years.
Michigan is an “equitable distribution” state when it comes to property division in a divorce. This means marital assets will be divided in a way that is fair, even if that does not lead to an exact 50/50 split. It is important, then, to understand the difference between separate and marital assets.
Basically, a marital asset is something that is accumulated during the course of the marriage. Marital assets are considered community property and are made part of the divisible estate.
Separate assets belong to the spouse who owns them and are not included in the divisible estate. Separate assets include those a spouse owned prior to getting married, gifts, inheritances and court awards. In addition, assets purchased using only separate assets will remain separate assets.
However, it is possible for a separate asset to be converted to a marital asset. This will happen if a separate asset was purchased or maintained with commingled funds — that is, a mixture of separate funds and marital funds. Assets purchased or maintained with commingled funds will generally be considered marital assets. In order to keep separate assets separate, they must remain completely separate from marital assets, to avoid commingling.
This is only a basic overview of property division in Michigan and does not contain legal advice. To learn more about how assets will be treated in a divorce it can help to seek the assistance of a professional who can provide further information on this topic.