Most couples have joint property, and when they decide to divorce, splitting marital assets can be a trying experience. Though Michigan divorce laws make it clear that marital property is to be split fairly, determining what fairly means and what counts as marital property can result in years of contentious litigation. In addition, splitting joint debts, such as mortgages, car loans and credit card bills can further complicate the divorce property settlement issue.
How to fairly split marital property and debt are the main factors in Michigan divorce property separations.
What does fairly divide mean?
In some cases, fair property division means splitting all marital property in down the middle. However, judges often determine that one spouse deserves the lion share of the marital property. One common example is a judge awarding one spouse less property because the court determines that spouse is more at fault for the divorce. Another example is giving one spouse more of the marital property because he or she takes on more of the marital debt.
What Counts as Marital Property?
Most property acquired during a marriage counts as marital property, regardless of whether both names are on the title or deed. Property each spouse obtained before the marriage is considered separate property and is not divided. Gifts or inheritances gained during the marriage also count as separate property.
Some property obtained prior to the marriage can be considered marital property and be eligible for division in divorce. This occurs when the other spouse contributes to improving the property or the market value of the property rises during the marriage. In both cases, the increase in value is divided. Also, when the division of marital property leaves one spouse impoverished, a judge may decide to split separate property if it is available. In addition, separate property that is used for marital purposes or separate monies placed in a joint bank account become marital property.
Transferring Titles Once Property Is Divided
Divorce court judges specify how property is to be divided in the divorce decree but does not automatically transfer titles or deeds. For titled property, such as motor vehicles, both ex-spouses must complete the necessary paperwork with the appropriate agency, such as the Michigan Secretary of State. Deeded property, such as a residence, requires the spouse who is not getting the property to sign a quitclaim deed. If either spouse refuses to transfer property as specified by the court, the other spouse needs to file a motion requesting the court enforce the decree.
Marital Debt
As with marital property, Michigan law requires marital debt be divided fairly, which often means splitting the debt load equally. However, there are many cases where a judge divides the debt unequally. For example, a spouse considered more at fault for the divorce may be forced to pay more of the debt. Judges also consider ability to pay, which if unequal may result in an unequal division of property. Also, if one spouse acquired debts without the other spouse’s consent for purposes that provided no benefit for the household, that spouse may have to pay off that entire debt.
Separate Debt
Debts acquired prior to the marriage are separate debts. Though most debts acquired during the marriage are marital debts, there are exceptions. Common exceptions include gambling debts, debt acquired for an extramarital affair and criminal restitution. Student loans are always considered separate debts unless the funds were used for both spouses’ education or household expenses.
Debt Usually Stays with the Property
Debt on specific property stays with the spouse who keeps it. For example, the person getting the house also gets assigned the mortgage.
Dividing property and debt during divorce often becomes more complicated than expected. Though splitting the property equally seems like a fair solution, that approach often fails to take the whole situation into consideration. For example, one spouse may have worked in the home and couldn’t survive financially if the property and debt load were split down the middle. Each case is unique and requires analysis.
Couples going through a divorce should consult a divorce attorney as soon as possible. The attorney may recommend mediation, where the couple decides themselves how to split the property. If mediation is not an option or fails, a judge will determine how to split the property.
An experienced Divorce and Family Law Firm will help you with all aspects of divorce. The Law Offices Rappleye & Rappleye specializes in all matters of divorce and family law including property division. Our family law firm will help you protect your most valued assets due to our vast knowledge of the state equitable distribution laws. Child support, child custody, spousal support and parenting time are all difficult aspects of ending a marriage and require compassion and support. Call us today for a consultation!