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Michigan Family Law Blog

Sunday, December 2, 2018

Should I Have Repairs Done On The Home Before Filing For Divorce?

Should I Have Repairs Done On The Home Before Filing For Divorce?

In Michigan divorce cases division of property is basically a two-step process.  The first step is to determine whether the property in question is martial or separate property.  Marital property is generally all property that is earned or purchased by either party during the marriage regardless of how the property is titled.  Separate property is very specific and limited to property gifted solely to one party or inherited solely by one party and kept separate from all marital property and/or property owned by one party before the marriage and kept separate from all marital property. 

The second step is the division of the property.  Marital property is typically divided in a roughly equal fashion with fifty (50%) percent of the value of the property being awarded to each party.  Separate property is awarded entirely to the party that owns that property without any offset of marital property or consideration of the separate property when dividing the marital property.  The marital home is almost always considered marital property regardless of how the property is titled, although if one party owned the home before the marriage, she or he may have a good argument that the equity value of the home at the time of the marriage is her or his separate property and only the increase in the equity over the length of the marriage should be considered marital.

There are two ways that the parties typical divide the equity in the marital home.  One, the parties sell the home and split the proceeds as determined by the above analysis or two, one of the parties keeps the home and "buys-out" the other parties equity in the home.  This "buy-out" is often accomplished by refinancing the home in one party's name and pulling money out of the home as part of the refinance to pay-off the other party.  The parties may agree to transfer more of other assets in lieu of a cash payment for the equity, but in most cases a refinance will be necessary to remove the other party form the liability associated with the mortgage any way.  The equity is determined by obtaining an appraised value of the home and subtracting the mortgage balance on the date of the appraisal.  No consideration is given for potential future costs of sale when the party that keeps it eventually wants to sell it.

All of this being said, if a divorce is possible in your future, you want to keep the home and believe that if it comes to a divorce the other party will not want the home or eventually will consent to your keeping the home, then you should absolutely get the work done now.  The money spent on the repairs, updates or upgrades will be far less than the increase in the appraised value.  If this is not the case, then you should defer all unnecessary repairs, updates or improvements.  If you have any questions about divorce or family law, please contact my assistant, Cathy at (248) 608-4132 to schedule a consultation or contact us through the web site.


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