How Does Property Get Divided In A Divorce?
While some cases may involve children and others alimony, virtually every divorce case involves dividing property or debt. In Michigan, the court is supposed to consider several factors such as the length of the marriage, the needs of the parties, needs of the children, earning power of the parties, source of the property, contribution to acquisition of property and the cause of the breakdown of the marriage. However, in reality, the court will first determine whether the property is separate or marital and in most cases, separate property will be awarded entirely to one party and marital property will be divided roughly equally between the parties.
Marital property basically encompasses almost all the property that the parties own, while separate property is limited to very specific instances, so it is easier to just focus on whether a property is separate. Separate property typically involves something one party owned before the marriage, gifts to one party, inheritances, or property acquired by one party after the parties have separated. However, separate property must be kept separate and not "commingled" with income earned during the marriage or other marital property, if that happens then the property will be considered marital and subject to equal division. In most cases, passive increase in the value of separate property will also be considered separate property awarded to one party.
Finally, even if the above analysis establishes that an asset or property is separate, that separate property might be subject to "invasion" and some portion of it (from one percent to one hundred percent) may be awarded to the other party. There are two main instances where "invasion" may be appropriate: (1) where the other party contributed to the property's acquisition, improvement or accumulation or (2) where absent the "invasion", division of the marital property would be insufficient for the other parties' suitable support. "Invasion" often becomes an issue in cases where one party is involved in a family business that was operating before the marriage but has increased in value over the marriage while that party worked for the family business in some capacity.
The best way to avoid issues regarding separate property, "commingling", and "invasion" is a prenuptial agreement, without one, the property owning spouse may have serious issues when it comes to a divorce. However, even if one doesn't have a prenuptial, good counsel for a divorce is imperative. The area of family law is deceptively complicated, if you have any questions regarding prenuptial agreements, separation or divorce, please do not hesitate to contact my assistant Cathy, at (248) 608-4123 to schedule a consultation or through the web site.