Facing a divorce or a separation is one of the more, if not the most, stressful and difficult events that a person will have to navigate in their life. There are so many different issues that may arise including custody, visitation (or parenting time as it is called in Michigan), child support, alimony, division of property and how to handle debts, just to name some. One issue that comes up relatively often is what happens to an inheritance when there is a divorce.
This falls under the label of property division. In Michigan divorce, property is first sorted into categories. There are really two categories, marital property or separate property. Marital property is divided in an equitable manner. That does not mean that it will be divided into mathematically equal portions, but rather roughly equal portions. Various considerations or factors could allow one party to get more and the other party less than a roughly equal share but not usually more than a sixty percent/forty percent split.
The second category is separate property. Separate property is considered the separate property of the spouse that owns that property and typically it is awarded to the spouse that owns it without any offset of other party. That means the spouse who owns the property is awarded one hundred percent of that property free and clear from any claim by the other spouse. Only specific types of property are considered separate and the spouse that owns that property must keep it separate from other marital property and cannot engage in active management of it, or use marital assets to pay to keep, maintain or improve that asset. If the spouse does that, then it will lose its separate nature and be considered marital property subject to the roughly equal division mentioned above.
An inheritance or inherited property by one spouse (but not both) will initially be considered the separate property of the inheriting spouse. However, as mentioned above that property can lose its separate nature and become marital property over time. For instance, if an inheritance is an investment account or money and the spouse puts it into a joint account, then it would lose it's separate nature and be subject to division. The same would be true if the person added marital funds to the account, this is called commingling and it would lose it's separate nature. The same can be true for real estate if the inheriting spouse uses marital funds to pay property taxes or for maintenance, upkeep or improvements to the property. So if you have an inheritance that you have maintained as your separate property, most likely that property will be awarded one hundred percent to you without any offset of other marital property. If you have not maintained its separate nature, then it most likely will be subject to an equitable division.
If you are facing a potential divorce or separation, it is very important to consult with a Michigan family law attorney as soon as possible. Please do not hesitate to contact us at North Oakland Michigan Divorce Lawyer to schedule an appointment.