The division of assets is often one of the most difficult hurdles to overcome during a divorce. In fact, it is often the issue (besides child custody) that causes the most fighting and finger pointing between couples who are parting ways. Some couples are able to agree between themselves on who gets what when they end their marriage. However, not everybody agrees on what constitutes a “fair” division of assets, and sometimes these disagreements can turn into terrible battles.
Michigan law requires that division of marital property during a divorce be fair or equitable. Marital property is defined by the law as all assets and debts a couple acquires during the course of their marriage. The most common method used to divide property would be to assign certain items to each spouse so that the division is relatively fair. Sometimes an equalizing payment is needed, if one spouse gets more than the other (this payment has nothing to do with alimony). Other times the uneven divide is squared up by selling property and dividing the proceeds.
Quite a few divorcing couples are able to decide on their own how they want to divide up their marital property, without help from an attorney. But for those who can’t reach an agreement, divorce attorneys will provide advice, mediation and assistance in negotiating a settlement. If the divorcing couple prepared a Pre-nuptial Agreement, this should be easier. However, even the most watertight prenups can be challenged in court.
There are certain cases where even the assistance of attorneys can’t bridge the gap, and couples are completely unable to reach an agreement. In that case, the divorce will end up in court, where a judge or arbitrator will make decisions about dividing assets. When a Michigan judge decides how a couple’s assets should be divided, they aim to be as fair as possible. However, in order to achieve a “fair and equitable” divide, there are many factors that are considered, including:
- The length of the marriage
- Past relations and conduct of both spouses
- The age, health, and life status of each spouse
- The earning ability of each spouse
- The needs and circumstances of each spouse
- Each spouse’s overall contributions to the marital estate
- The general principles of equity
In addition, any debt accrued during the marriage counts as part of the marital property and has to be fairly divided. A divorcing couple will be required to assign all debt, including mortgages, car loans, and credit card debts, to one of the spouses. In the event that they cannot agree on how should pay off their accrued debt, the Judge will determine that also.
Property that was owned by one spouse before the marriage, and kept separate during the course of the marriage, will still usually be considered the personal property of that specific person. However, in Michigan a judge has the right to consider non-marital property for division if they determine, considering all of the circumstances of the case, that the other spouse should be awarded a portion of that property/asset.
Dividing assets can be extremely difficult. This is especially true when the spouses harbor a good deal of resentment and anger toward each other. But despite your feelings, one very important thing to remember is that it’s always best to be open and honest about all of your assets during the divorce process.
So, that secret bank account you started a few years ago when your marriage started to falter and you thought you may have to venture out on your own? Yes, even that needs to be disclosed. It may not seem fair, but there is one very good reason for not hiding ANY assets during a divorce – legal consequences.
These things are very often discovered down the road, and failing to report assets during a divorce can result in very serious penalties. You could face losing everything you tried to hide, substantial fines ordered by the court, or even criminal charges. Make sure your attorney knows about all of your assets. Consulting a Michigan Family Law Attorney is a wise first step when it comes to fair division of assets in a divorce.