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The home is often a couple's biggest financial asset as well as where they spent their time and maybe raised the children.  When it comes to a divorce, many people have lots of questions about the marital home and what will become of it in a divorce or they have questions about how the asset will be divided.  This blog is written to specifically address the question of whether you will be able to keep your house after a divorce in Michigan if you owned it before the marriage.  If you have specific questions regarding your own situation, please do not hesitate to contact us to schedule a consultation by clicking on this link or calling (248) 608-4123.

Can I Keep My House In A Divorce In Michigan If I Owned It Before I Got Married?

The first step in dividing property is to decide whether it is marital or separate property.  Marital property is divided in a roughly equal manner between the parties.  Separate property is awarded to the person that "owns" that property and it is awarded to that spouse as their own separate property free and clear from any claims by the other spouse or offset of other property.

That begs the question, is the marital home considered marital property.  The answer is that yes at least some part of the marital home will be considered marital and subject to offset.  However, if you owned the home before the marriage, then you should be entitled to whatever equity you had in the property at the time you married as your separate property. 

To determine what share of the home is your separate property we typically have an appraiser conduct an historical appraisal to determine what the value of the home was in the month that you got married and deduct from that amount whatever the balance of the mortgage was on that month.  This will give you the equity that you held at the time of the marriage and that amount will be awarded to you as your separate property.  Any additional equity or increase in the value of the home since the date of the marriage, will have to be shared equally with the other spouse.

An example will help illustrate how this works.  Assume Bill had a home with $200,000 equity when he and Sue got married in August of 2015.  Sue files for divorce and they have the house appraised at $900,000 with a $400,000 mortgage, so there is $500,000 of equity.  If Bill keeps the home, he will have to pay Sue $250,000 to keep the home.  If they sell the home, then Bill should walk away with $450,000 and Sue with $250,000, not including costs of sale, etc.

Whether you can keep the house if you owned if before the marriage is a question as either party has a right to try to keep the home.  It certainly makes more sense for the person that owned it before the marriage to keep it as they would have to make less of a payout to the other spouse and basic fairness would seem to dictate that the person that owned it has a greater right to keep it.  In all the cases I have had, there has only been one where the other spouse tried to keep the house but it was eventually awarded to the spouse that owned it before the marriage.

This blog was written to address the very specific issue of whether you will be able to keep your home after a divorce in Michigan if you owned it before you got married.  If you have questions regarding a potential divorce or separation, please click on this link or call us at (248) 608-4123.