An important part, perhaps the most important part, of any divorce is the division of the couple’s marital assets. Asset division can be a complex process, especially if you have a large asset pool or high value assets.
Marital Property versus Separate Property
Marital property is defined as property the couple obtains during their marriage. This often includes savings accounts, their home, retirement accounts, and small businesses they operate together. Separate property, on the other hand, is property the individuals owned prior to entering the marriage. Debts are treated the same way as assets in a divorce. Both parties are liable for the debts they accrued as a couple, even in cases where the debt was taken on for one partner to pursue a degree or start a small business.
There are a few circumstances under which the property an individual obtains during his or her marriage is considered separate property. These are:
- Property he or she receives as gifts;
- Property he or she receives through inheritance; and
- Assets designated as separate property in a prenuptial agreement.
In Michigan, courts may include separate assets in a divorcing couple’s asset division plan. Though this is not common, a judge may choose to divide separate assets in a case where he or she deems it to be in the couple’s best interest. Sometimes, it is difficult or even impossible to draw the line between separate and marital on certain assets, such as properties owned before entering the marriage that grew in value due to the couple’s shared efforts to maintain and improve them.
Understanding Equitable Distribution
Equitable distribution means that instead of splitting a divorcing couple’s assets and debts in half, the court considers a set of factors about the couple to determine the fairest way to divide to divide them. A fair breakdown of the couple’s marital assets and debts might not necessary be an equal breakdown, hence the term “equitable.”
The court has the discretion to decide which factors to consider more heavily when dividing a couple’s marital assets and debts. Factors the court typically considers when dividing a couple’s assets include:
- Each partner’s earning power;
- Each partner’s financial and personal needs after the divorce;
- The duration of the couple’s marriage;
- Each partner’s contributions to the marital asset pool during the marriage;
- If the couple has children, their children’s needs; and
- In some cases, either party’s wrongdoing. For example, if one partner spent marital funds on an affair partner, the approximate amount he or she spent may be deduced from his or her share of the marital assets.
Work with an Experienced Oakland County Divorce Lawyer
If you are considering ending your marriage or you have already filed for divorce, now is the time to start working toward its settlement with an experienced divorce lawyer. Contact Oakland County divorce lawyer Paul Tafelski today to set up your free legal consultation in our office, during which we will discuss asset division and other issues at play in your divorce.