In order to make a divorce final, a judgment of divorce must be drafted and ordered by the court. One of the mandatory sections, which must be included in the judgment of divorce, is property division. Here, the court orders the division of real property, personal property, and marital debt.
Marital property is property “accumulated though the joint efforts of the parties during their marriage.” Leverich v Leverich, 340 Mich 133, 137, 64 NW2d 567 (1954). Meaning, that anything you acquired during the marriage, from wedding day to final judgment of divorce, is considered marital property and is subject to division. Separate property is property acquired before the marriage (even if you were living with your ex spouse before marriage).
Marital property also includes “any increase in net worth that may have occurred between the beginning and end of the marriage.” Bone v Bone, 148 Mich App 834, 838, 385 NW2d 706 (1986). This means that where separate property of one spouse increases in value during the marriage by the active involvement by one of the spouses, it is marital property. Purely passive appreciation (inflation, market appreciation, accumulation of interest) is separate property, not marital. Reeves v Reeves, 226 Mich App 490, 493, 575 NW2d 1 (1997). So, for example, a home bought by one spouse before the marriage, which has appreciation because of the housing market, is separate property.
Separate Property is property that is not divisible on divorce absent special circumstances (where there is great need or where one spouse contributed to the asset in some way). Separate property includes, but is not limited to the following:
Property settlements in divorce must handle debt along with assets. There is very little case law on debt, but the court often adopts practical considerations. Therefore, regular household debts incurred during the marriage are generally assumed to be joint debts regardless of who signed for them.
Essentially, marital debts are treated as negative assets and are allocated between the parties by the same equity principles the govern property division in general.
However, debt plainly incurred for separate purposes, and not for the marriage, is considered separate debt (gambling, drugs, criminal restitution, extramarital affair…etc).
Divorce and property settlements can be difficult and can feel overwhelming. Before agreeing to any property settlement and certainly before taking any legal action with your property in divorce, contact our experienced legal team in Grand Rapids at 616-698-0000 or www.clickforhoward.com
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