The first question that must be asked before diving into the complexities of a state’s property division laws is whether the state recognizes community property. Only nine states have chosen to designate all property acquired by a couple during their marriage as community property (California is the most notorious for this choice), but the failure to ask this basic question could lead to significant unfairness in the division of marital assets.
Understanding equitable distribution
Fortunately, Michigan is what is known as an “equitable distribution” state. If a divorcing couple cannot agree on how to divide their marital assets, the court is empowered to make this decision by ensuring that the division is fair. In the absence of special circumstances, the application of equitable distribution rules means that each spouse will get about 50% of the marital assets. The benefit of using equitable distribution as the standard for measuring how much each spouse will receive is the greater discretion vested in the court to use its distribution allocation powers to allow for special situations, such as the presence of a child with special needs.
What is marital property?
The equitable distribution rules apply only to marital property. Marital property, in turn, is the term used to describe property that the couple has acquired during their marriage. Property acquired by one spouse is known as separate property. The equitable distribution principle applies only to marital property. Generally, both spouses are entitled to sole possession of any asset that they owned prior to the marriage or that was received by gift or inheritance during the marriage.
How do these rules affect high asset couples?
Couples who possess an unusually large amount of assets may have difficulty arriving at a fair distribution, especially if one or both was previously married. The techniques for dividing marital assets involves an initial determination of which assets are separate and which are marital. If the couple is able to agree on this fundamental question, the rest of the division process can often proceed quickly and peacefully. IN the absence of such an agreement, the court may be required to resolve the dispute.
Anyone who believes that their marriage will soon be undone by divorce may wish to consult a knowledgeable divorce attorney for advice on the subjects that have been touched upon in this post.
