Latest News

Is This Marital Property or Separate Property? — Part II

In Part I, we discussed the two major factors courts use in deciding whether a given piece of personal or real property is ‘martial’ (meaning it’s in the pool to be divided between the parties) or ‘separate’ (meaning it goes with the party who brought it into the relationship in the first place). For review, the overriding factor is the security of the family’s financial future: the courts will always attempt to set up a situation where everyone is financially secure moving forward. Once that goal is established, they tend to follow the general rule of ‘whoever brought it, keeps it’ for all assets that pre-existed the marriage.

Here, we will discuss a couple of other factors that the courts use in deciding how to distribute property that are less common, but nonetheless very important.

Demonstrated Need

A common reason for property to be assigned contrary to the general rule: one spouse clearly needs more than the other in order to get by. . The most common situation for this is when the spouse who gains custody of the child is accustomed to being a homemaker and needs support while he or she gets back into the market. That said, aAny adequately proven need will suffice for the court to set aside the general rule. Things like the age and health, earning ability, and life situations of each spouse are carefully taken into account during this process.

Asset Abuse

Marital property is often can be inequitably unevenly split if one spouse is proven to be at fault for a situation the divorce or actions which devalued the couples’ assets. For example, if you compulsively gamble away your child’s college savings and your spouse divorces you because of it, you can may argue count on your spouse getting ttheat equity dictates that you receive a disproportionate  lion’s share of the martial property to compensate for your loss. . Very rarely will the court leave you with an egregiously small amount of assets to your name, but it looks very poorly upon spouses who squander or abuse family assets.

Special Rules for Specific Sources of Money

You may find that various types of personal property a of income for the married couple are treated in very specific ways. Some examples of these are:

due to the statutes of Michigan State law. Those are:

  • Pension Benefits: By Michigan State law, even though pension benefits are almost the definition of an asset acquired solely through the efforts of one spouse, must they are generally  be treated as marital property. This does not always mean they will be split evenly between the ex-partners, however: the overriding goal of supporting the family still takes precedence.
  • Worker’s Compensation/Insurance Claims: Workers Comp, insurance payouts, and similar monies are complex, because frequently, a portion of each is considered to be a replacement for lost wages, and the rest portion is not. The portion that is replacing lost wages legally defaults to being marital property. The portion of the claim that goes to compensate for the claimant’s pain and suffering legally defaults to being separate property. Again, however, the court has the power to override these defaults in order to accomplish the support of the family.
  • Severance Pay: Michigan State law defines sSeverance pay is designed as a martial asset by default.
  • Sales of Stock: Similarly, any proceeds from the sale of stock is defined as a martial asset by default as well.
  • Inheritance: On the other hand, inheritance is legally considered separate property unless it’s necessary to use it to establish the family’s financial security., or commingled in to the marital estate.

In general, the court has a wide leeway in interpreting these and other rules — again, because they have that singular overriding goal of making sure everyone can reliably continue living.

So while it’s important to know these legal details, it’s also important to recognize that at the end of the day, the court’s judgement can and should override all of them if it means that everyone in the family has a financially secure situation to move forward into.