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Michigan Family Law Blog

Friday, August 25, 2017

Considering a Separation Agreement? Here’s What You Need to Know

Michigan does not have “legal separation” in the usual sense of the term. In Michigan, once you marry, you are either a married couple that lives together or a married couple that lives apart. A married couple that wants to live apart from each other can have a formal, written separation agreement, but they do not have to. Most separation agreements in Michigan are actually settlement agreements for divorces. A settlement agreement contains the terms the couple wants to live by when the judge grants the divorce. Before you sign anything, talk to a legal separation lawyer.

A settlement agreement can deal with child custody and visitation, child support, spousal support, and the distribution of the marital and separate assets and debts of the couple. Many people want to have the control over these decisions, rather than letting the judge, who is a total stranger to them, make decisions about their lives and financial futures.  

Although people are allowed to write their own terms in general, they cannot go off the deep end and write things that would be considered outrageous or unfair. A judge must approve the settlement agreement before incorporating it into the divorce decree. The judge must use the legal standard of “equitable under all the circumstances of the case.”

Before a Michigan judge can award a spouse real or personal property in a divorce, the judge must find that the party getting the property contributed to the acquisition, improvement or accumulation of the property. If the person did not so contribute, the distribution is not equitable. This general rule, however, can be applied somewhat loosely, to make the total assets each party receives in the divorce fair. The distribution does not have to be 50/50 to be equitable.

The court will look at these factors when dividing the marital property:

  • How long the couple was married
  • The needs of the couple and any children
  • The earning capacity of each spouse
  • Where the property came from – inheritance, bought during the marriage, or another source
  • The reason for the divorce
  • Who contributed to getting, improving and maintaining the property

Two pitfalls to avoid with your settlement agreement:

1. The separation agreement or the divorce decree must deal with all life insurance policies that name either spouse as a beneficiary. Sometimes divorcing couples agree to carry life insurance as a back-up for child support in case a parent dies before the children grow up, but in Michigan, a divorce judgment will automatically terminate a spouse’s rights as a beneficiary of life insurance on the other spouse unless the divorce decree specifically provides otherwise. It is a best practice to address the issue of life insurance in detail in the settlement agreement, in case there are any questions down the road.

2. You are allowed to keep your spouse in your will after the divorce, but you must specify that you are intending for your former spouse to inherit from you even though you have divorced. Under Michigan law, getting a divorce will automatically revoke your will unless your will specifies otherwise.  

Going through divorce is difficult and challenging. You do not want to face this alone, without good legal representation. Contact Michigan spousal support attorney Cameron C. Goulding today to schedule a consultation.


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