In Michigan divorce law there are two kinds of property: separate property and marital property.
Separate property is any property owned by either party prior to the marriage, and some property acquired during the marriage by gift or inheritance. Separate property is normally awarded to the party it originally belonged to. Separate property can become marital property. If separate property is commingled, or mixed, with marital property it may be considered marital property at the time of division.
Marital property is any property, or debt, acquired during the marriage (from the date of the wedding until the judgment of divorce is entered). Marital property is subject to division between the parties.
Property division in Michigan follows the rule of equitable distribution. This means that rather than dividing the property equally, property will be divided “equitably” or fairly. There is a presumption that the division will be roughly equal, and a court must clearly explain its reasons if it decides to deviate from the “roughly equal” guideline.
There are numerous factors that courts consider when dividing property. The most common factors considered are:
• the source of the property;
• contribution toward its acquisition;
• the number of years of married life;
• the needs of the parties and the children;
• the earning power of the parties;
• the cause of the divorce;
• general principles of equity; and
• any other factor the court deems relevant.
Courts most frequently depart from the “roughly equal” model of property division in short-term childless marriages; in cases in which there is significant separate property; or in cases in which one party has greater need.
In short-term marriages, courts often return the parties’ premarital property to them and equitably divide between the parties’ assets that were accumulated during the marriage.
In longer-term marriages, or those in which the parties have changed their positions in reliance on the marriage, such as by having children or sacrificing career or educational progress, courts are less likely to try to return the parties to their premarital status and more likely to compensate one party for their sacrifice for the family.
Property division and support issues are closely related. If a party needs support, a property settlement can award that party more than half of the assets, in lieu of, or in addition to, support payments.
The reasoning for this is to ensure that the parties can have similar standards of living without forcing one party to have to dip into their property award to survive, while the other can live on their income and enjoy the benefits of their property award.
Most property is divided by the parties working with their family law attorneys and made part of a settlement agreement. Property division is one of the areas in a divorce with the most room for negotiation.
A final property division can usually be worked out with the help of a domestic relations mediator, who facilitates discussion and negotiations between the parties.