Property division can be a fiercely litigated issue in a Michigan divorce proceeding. Michigan divorce laws require that marital property is divided equitably between the parties. Equitably does not always mean equal, but it also does not include non-marital property. Non-marital property is not subject to an equitable division of property in a divorce action. Our Michigan property division lawyers work diligently to ensure that the property that belongs to you as separate property is not included in the property division, including inheritance received during the divorce.
Marital Property vs. Separate Property
In most cases, marital property includes the assets you and your spouse acquire during your marriage, including real estate, personal property, and liquid assets. Marital property also includes the income you earned during the marriage, pension plans, retirement accounts, and investment accounts. It does not matter whether the property is titled jointly or in the name of one spouse. If the property was acquired during the marriage, it is usually considered marital property and subject to property division.
Separate property is property that is owned by the spouses before the marriage. Gifts received during the marriage, settlements for pain and suffering in a personal injury lawsuit, and inheritance received during the marriage are usually considered separate property. Separate property is not subject to property division in a divorce action. However, separate property could be subject to property division in certain circumstances.
Exceptions to Separate Property Remaining Separate
As stated above, your inheritance is typically considered separate property and will not be included as marital property during the divorce. Therefore, your spouse will not be entitled to any of the inheritance and the judge should not offset your share of marital property by the amount of your inheritance. However, there are exceptions.
Separate property can lose the protection of being “separate” in several ways. One of the most common ways to convert an inheritance into marital property is to commingle the assets. For instance, you receive $50,000 from your grandmother's estate. Instead of placing these funds into an account in your name only, you place the money in a joint account. You and your spouse deposit money into this account and withdraw funds from the account. A judge may not uphold your claim that $50,000 in the account is separate property.
Another example would be if you used your inheritance to support the family. In some cases, a judge may find that it is in the best interest of a child that both parents maintain the same standard of living. Therefore, the judge may determine it is in the best interest of the child that your inheritance or part of the inheritance should be included in marital property.
The stronger the intent for the inherited property to be used to support the family or for the benefit of the family the more likely a judge may be to grant your spouse's assertion your inheritance is a marital asset. The above examples are not the only instances in which an inheritance can become marital property. The judge weighs the facts and circumstances of each case to determine intent.
To protect an inheritance, you should place the funds or property in your name and avoid using the inheritance for family purposes. You should also consult a Michigan property division lawyer as soon as possible if you want to protect an inheritance as separate property.
Consult with a Michigan Property Division Lawyer Immediately
If you are contemplating a divorce or separation, it is important to consult a Michigan property division lawyer as soon as possible. Call now to schedule a consult with experienced Michigan family lawyer, Cameron C. Goulding today. You need to know your rights and take steps to protect your assets and best interests as quickly as possible.