When spouses in Michigan are at the early stages of a divorce, one or both of them may be extremely concerned about ensuring that separate property is properly classified and is not divided in the divorce. As you may know, under Michigan divorce law, all property owned by the spouses will be classified either as separate property (non-marital property) or marital property. Then, in most cases in which there is no property settlement agreement between the parties, the Michigan court will divide all marital property according to the theory of equitable distribution. This means that marital property will be distributed between the spouses not necessarily in an equal of 50/50 manner, but instead in such a way that the court decides is equitable or fair to the spouses.
If you have valuable separate property, you may be worrying that the court will classify it as marital property and will divide it into your divorce. The following are some ways that you can make sure separate property remains separate and is not distributed to your spouse in your Michigan divorce case.
Revisit Your Premarital Agreement
First, do you have a premarital agreement (also known as a prenuptial agreement)? If you do, you should know that, under Michigan law, divorce courts will uphold the terms of a premarital agreement as long as both parties entered into the agreement voluntarily, in good faith, and under clear terms. For example, if you have a premarital agreement that specifies particular stocks you owned prior to the marriage will remain separate property in the event of a divorce and those stocks increase substantially in value, a Michigan court will not suddenly say that the agreement is unfair to your spouse and that it will not be enforced. Rather, Michigan courts err on the side of enforcing the terms as long as the parties had clear knowledge and understanding of the terms and entered into the agreement of their own free will.
Consider a Postnuptial Agreement
If you have not yet separated and filed for divorce, and you do not have a premarital agreement, you could consider entering into a postnuptial agreement in anticipation of your divorce case and the division of marital property. A postnuptial agreement is very similar to a premarital agreement except instead of occurring prior to the date of the marriage; it occurs after the date of the marriage.
With a postnuptial agreement, the spouses can reach an agreement about what assets will remain “separate” in the event of a divorce.
Keep and Gather Documentation Related to Your Separate Property
If you are concerned that your spouse will try to argue that some of your separate property is actually marital property, you should do everything you can to keep and gather documentation related to the asset. For example, do you have a receipt with the date of purchase? Do you have other documentation that makes clear the property was acquired prior to the date of marriage? Any evidence like this will help the court to properly classify the asset as separate property that is not subject to distribution.
Contact a Michigan Divorce Attorney