In divorce proceedings, Michigan law divides property according to equitable distribution. The word equitable implies that the court attempts to be fair in the division of the marital property, taking into consideration how much each spouse earned, how each spouse contributed to the household and how the distribution of assets would affect all parties involved — including minor children.
Dual and unitary property models
Divorce law employs two categories for approaching equitable distribution — dual classification and unitary classification. In a dual classification system, all property is either marital or separate, and only marital property is subject to distribution. In a unitary model, all property is considered in the pool regardless of how it was originally acquired. Michigan stands somewhere between the two.
Separate and marital property
Michigan law recognizes the concept of separate property, and considers assets inherited or gifted to one spouse during the marriage to have the status of nonmarital property. However, when the court examines the total assets of the couple in order to apply the principle of equitable distribution, the court has the authority to consider the worth of the assets each partner holds separately as one of the factors in this decision.
In other words, the court does not have the authority to give half of your inheritance to your spouse, but if you have inherited a large sum and your spouse has considerably less, the court may distribute the marital assets in a manner that compensates your spouse, closing that gap to an extent.
Keeping assets separate may be a challenge
If you have inherited or received a cash gift from a family member and desire to keep these assets from division, you may be able to protect them by making sure they are not co-mingled with your marital assets. However, there is no way necessarily to hide them from the eyes of the court.
A Michigan divorce attorney can advise you further regarding the protection of your separate assets.