How can I Ensure My Separate Property is Not Distributed in My Divorce?

Anyone who files for divorce in Michigan should be prepared for property division, or the distribution of marital assets and debts. Under Michigan divorce law, marital property is divided according to the theory of equitable distribution. In other words, property is divided between the spouses in a way that is equitable. Marital property typically includes both assets and debts accumulated during the marriage, but it typically does not include separate property. Classifying property can become complicated when property has been commingled and there is no clear prenuptial agreement in place.

If you are concerned about ensuring that your separate property is classified correctly and thus is not subject to distribution, what can you do? An article in NerdWallet addresses the complications and anxieties associated with property classification in a divorce and makes recommendations for steps parties should take to ensure that their separate property remains separate.

What You Should do to Make Sure Your Separate Property is Classified Correctly

Generally speaking, separate property (sometimes called non-marital property) in a Michigan divorce includes property acquired by one of the spouses before the marriage, property acquired by one of the spouses after the separation, and property acquired during the marriage that was either a gift or an inheritance specifically for one (and not both) of the spouses. To avoid the possibility of separate property becoming commingled or being classified as marital property, you should consider these tips:

  • Consider how you title your financial accounts, which means keeping only your name on your checking account, savings account, and other accounts that you opened prior to the marriage (in other words, do not add your spouse's name to an account that you opened before you got married);

  • Always deposit any dividends and interest you receive from separate property into a separate account;

  • Develop a budget with your spouse, along with a bank account that is used for paying bills each month (so that you do not add your spouse to an older checking account or vice versa), and keep records of who paid what (and from which account); and

  • Understand how the increase in value of separate property during the marriage can be classified as marital property if it is used for the benefit of the marriage.

What You Should Not do if You Want to Keep Your Separate Property

The following are things you should never do if you are concerned about the proper classification of separate property:

  • Do not transfer any money from separate accounts into joint accounts;

  • Do not deposit any earnings from dividends or interest on separate property into joint accounts or joint assets; and

  • Do not commingle-or mix together-any separate assets with marital assets, as well as any separate debts with marital debts.

Contact a Divorce Lawyer in Michigan

The division of marital property can be extremely complicated, depending upon the types of assets and debts that both spouses have. Even when property division seems like it should be relatively straightforward, the classification of certain property can be contentious. If you have questions about property division or a property settlement, an experienced divorce lawyer in Michigan can assist you. Contact the Law Offices of Michael A. Robbins for more information about how we can help with your case.