Marital Property Is Divided Fairly
Michigan law requires a fair property division. Fair usually means that each person gets about half of everything. But in some cases, a judge could decide it is fair to divide marital property in a different way.
Your property might be divided unequally if one person is more at fault for the marriage ending or if one person needs more property. Sometimes one person gets more marital property but also takes on more marital debt.
What Counts as Marital Property?
Most property you acquired or earned during your marriage is marital property. It doesn’t matter whose name is ***** ***** title. If something is marital property, it is owned by both of you. Marital property gets divided in your divorce. Things that are not marital property are called separate property.
Separate Property Is Not Divided
If one spouse owns property before the marriage, it is separate property. If one spouse inherits or is given property during the marriage, it is separate property. If a piece of separate property gains value on its own, the increase in value is separate property.
For example, a wife owns a rental home before the marriage. Neither she nor her husband does any work on the home during the marriage. An increase in the home's value is her separate property.
Spouses usually keep their separate property in a divorce. However, separate property can be divided if:
The other spouse contributes to getting the property, improving it, or growing it; or
The other spouse's share of the marital property is not enough to meet that spouse's needs.
When Separate Property Becomes Marital Property
Sometimes separate property becomes marital property. Separate property may gain value during the marriage because of work done by either spouse. If so, the increase in value is marital property.
Example: Your spouse owned a home before your marriage. During the marriage, you or your spouse made home improvements that increased the home's value. The increase in value is marital property.
Separate property might become marital property if it is regularly used for marital purposes or placed in a joint bank account.
If you transferred inherited money to a joint bank account with your spouse, that money became marital property;
If you regularly used money your parents gave you to pay down the mortgage on the marital home, that gift became marital property.
Transferring Titles Once Property Is Divided
Your Judgment of Divorce will say which person will keep what things. But you may still need to transfer titles or deeds.
A car is property that has a title. Neither your Judgment of Divorce nor the judge will transfer a car title for you. If you need to transfer the title, you and your spouse must sign and file the required paperwork.
A house is property that has a deed. Neither your Judgment of Divorce nor the judge will change the names on a deed for you. You will need a quitclaim deed if both of your names are ***** ***** current deed or if the current deed is not in the name of the person keeping the property. The person who is not keeping the house must sign the quitclaim deed to transfer their interest in the house to their ex-spouse...
Your Judgment of Divorce will tell each of you to complete the documents needed to transfer property. If either of you does not do this, the other spouse can file a motion asking the judge to enforce your Judgment of Divorce. To learn more, read Post-Divorce Judgment Issues — Property and Spousal Support.
Who Will Pay Our Debt?
Marital Debt Is Divided Fairly
Each spouse is responsible for a fair share of the marital debt. This usually means each person has to pay about half of the total debt. In some cases, a judge could decide that it is fair to divide debt in a different way.
An unequal division of debt could happen in these situations:
One person is more at fault for the marriage ending,
One person is able to pay more, or
One person is responsible for incurring debt without the other spouse's consent for a purpose that did not benefit the household (example: one spouse's gambling debt)
Sometimes one spouse takes on more debt and gets more property.
Marital Debt or Separate Debt
Debts that one spouse acquired before the marriage are separate debts. In general, all debts acquired during the marriage are marital debts. It doesn't matter who made the purchase or whose credit card was used.
There are some exceptions to this rule. Gambling debts, money spent on extramarital affairs, and money spent for restitution in a criminal case are usually not marital debt. Student loans taken on during the marriage are separate debt if they were used only for one spouse's education. But if student loans were used to support the household, they can be treated as marital debt.
Debt Usually Stays with the Property
The person who is awarded a piece of property normally takes on the related debt. Sometimes only one person can afford to pay the related debt, so that person keeps the property.
Creditors Are Not Bound by Your Debt Division
The judge assigned to your divorce case does not have authority over your creditors. Creditors are those you owe money to. Your Judgment of Divorce can assign each debt to you or your spouse. However, creditors may continue to treat debts that are in both of your names as joint debt.
It is important that all debts in both of your names are ***** ***** your Judgment of Divorce. That way, if the person ordered to pay the debt doesn’t do so, the other spouse can get the order enforced by the court. If you end up paying a debt assigned to your spouse, you can file a motion asking the judge to order your spouse to repay you.
Who Decides How to Divide Our Property and Debt?
You and Your Spouse Can Agree On Your Own
Lawyers, mediation, and court hearings are expensive ways to divide your property and debt. If your assets and debts are easy to understand, you and your spouse can try to work out your own property settlement. This will help keep costs low.
If you and your spouse can safely negotiate, sit down together, list all of your property and debts, and agree on how to divide them. The judge will review your settlement to make sure it is fair, but will usually approve it if you have agreed...
You and Your Spouse Can Agree in Mediation
Mediation is a process where a neutral person helps you and your spouse settle the issues you do not agree on in your divorce case. Mediation may help you agree on property and debt division and other issues. It is an alternative to going to court and having a judge decide what will happen. To find information about mediation services, use Community Services.
Mediation and other forms of alternative dispute resolution are not recommended in situations involving domestic violence. Threats, fear, and control are common in domestic violence situations and can make it hard for you to reach a fair agreement. Mediation may be an especially bad idea if you are a survivor of domestic violence and you don’t have a lawyer...
If You Can't Agree, the Judge Will Decide
If you and your spouse can't reach an agreement on how to divide your property and debt, the judge will decide for you. The judge will consider the following factors:
How long you were married
What each spouse contributed to the marital estate
Both spouses’ financial needs
How much money each party can earn
Why you are getting divorced, if one person is more at fault
Anything else the judge thinks is important
Under the second factor above, contributions to the marital estate are not just financial. For example, if one spouse did not earn money but took care of the children and the home, those are also contributions.” http://michiganlegalhelp.org/self-help-tools/family/divorce-basics-dividing-your-property-and-debt