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One aspect of just about every divorce is the division of property.  This includes personal property like furniture, real property (real estate/the marital home), bank accounts and retirement accounts.  One question that I am often asked is "what date do we use to value the bank account or retirement accounts?"  This can be an important issue given the fluctuations in the market and  additions to or expenditures out of accounts.  This blog is written to broadly address the issue of what date will the court use to value the accounts when dividing them between the divorcing spouses.  If you have questions regarding your own finances and divorce or separation, please do not hesitate to contact us to schedule a consultation by clicking on this link or calling (248) 608-4123.

What Date is Used to Determine Value of Accounts When Dividing Property in a Michigan Divorce?

Divorce in the State of Michigan is governed by statute.  This means that it is based upon the laws enacted in the state by the legislature and the judge's decisions or the outcomes of a divorce are determined by application of those statutes.  In addition, there is common law, which is how cases have been decided that applied those laws, so there is first the statute or the laws created by the legislature and then the cases determine how the statutes are applied in reality to individual divorce cases.

When it comes to the value of accounts, the law indicates that the court is to use the dates as close to the actual divorce as possible.  The reasoning behind this is that people are still married and a financial unit until the actual divorce is entered with the court and that means any gains or losses that occur while the divorce is proceeding should be shared equally by the spouses.  Often the divorce judgment is signed by the judge and entered with the court, then the parties either use the first of the month prior to the actual date the divorce is signed or the first of the month after the divorce judgment is signed as the date to value retirement accounts. This means that in most cases, the spouses have to provide updated account information after the divorce judgment is entered before the parties can actually divide the accounts.  This can become complicated if either party does not produce the documents in a timely manner or otherwise is uncooperative with completing the transfer of funds.  The bank accounts are typically divided when the parties actually separate after the divorce is finalized.

This blog just scratches the surface of how division of property and valuation of assets can have an effect on a divorce in Michigan.  If you have specific questions, please schedule a consultation by clicking this link or calling us at (248) 608-4123.