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Michigan Family Law Blog

What Happens to my IRA in a Divorce in Michigan?

Posted by Cameron Goulding | Feb 06, 2024 | 0 Comments

Photo by Austin Distel on Unsplash

There are many aspects to a divorce case including child custody, child support, alimony (or spousal support as it is known in Michigan), division of debts and property division as well.  This blog is intended to address the limited question of how family law courts in this State will handle an IRA when it comes to the division of property.  These cases are fact specific, so if you have questions about your situation, please do not hesitate to schedule a consultation either through our online form or by calling (248) 608-4123.

An IRA is an Asset that Can be Subject to Division in Divorce.

The first thing a court should do when it is dividing property in a divorce case, is to determine whether the property in question is a marital asset or a separate asset.  Broadly speaking a marital asset is any type of asset that is earned or otherwise brought into the marriage by the effort of either party.  This means that it does not matter which spouse technically earned the asset, purchased the asset or otherwise used their own income to purchase the property.  One attribute of property division in a Michigan divorce case that many people find confusing  is that it does not really matter in whose name the property is titled or whose name is listed on a bank account as the owner.  If it came into either of the spouses hands during the marriage, then it is most likely going to be considered marital property regardless of whom is listed as the owner.  Marital property is to be divided equitably or roughly equally between the parties.  If the all of the money in the IRA was accumulated or earned during the marriage, then the entire IRA is considered marital and subject to equitable division between the spouses.

Separate property consists of specific categories of property such as property owned before the marriage, inheritances or gifts given specifically to one spouse not both spouses.  The spouse who is claiming that the property is separate must be able to show that they have maintained the separate nature of the property and not "commingled" it with marital property or income.  If it has been commingled with marital property, then most often it will be treated as marital property in the divorce.  Separate property is awarded to the spouse to whom it belongs without any offset from other marital assets. If the entire IRA was earned before the marriage and there were no contributions made to the account during the marriage, then the entire IRA is separate and not subject to equitable distribution.

What if I Accumulated Some of the Value of My IRA Before I got Married?

If you earned or saved some of the money that is in the IRA before the marriage and some after, then in most cases the premarital contributions to the IRA should be considered separate but any contributions or growth after the date of the marriage will be considered marital.  The easiest way to explain this is by example, so for example, Jim has an IRA in his name that had a balance of $100,000 on the last day of the month before he and Mary got married.  Jim continued to contribute to his IRA for the ten years they were married and the IRA has a balance of $200,000 at the time of the divorce.  In most cases, Jim should be awarded the entire $100,000 that was in the account when they got married and they will equally divide the remaining $100,000 at $50,000 each.  This means that after the divorce, Jim will have an IRA with $150,000 in it and Mary will have an IRA with $50,000 in it.

Of course, this blog does not address the intricacies of property and retirement account division in a Michigan divorce, so if you have specific questions please contact us through our online contact form or by calling (248) 608-4123 to schedule a consultation.

About the Author

Cameron Goulding

A native of Oakland County, Michigan, family lawyer Cameron C. Goulding has been providing counseling and legal services of the highest caliber to individuals and families in Southeastern Michigan for over 24 years. Mr. Goulding grew up in Oakland County, Michigan and graduated from Birmingham G...


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