Like a house, a car has a title. You have something you had before getting married. You treasured it for a long time. You own it, after all. It is titled in your name. There is a divorce in the future. Your partner wants to get it. Your spouse is wondering about divorce asset division, “Am I entitled to my Ex’s home and cars?”
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Do you think your partner will have it? Most likely, the answer is no. Given that it was a previously acquired item with your name on it, the court will act wisely. You get to keep that asset. It’s not always clear from the title of something where it’s headed. After your marriage, you purchased a classic vehicle. You titled it to your spouse for any reason. Even though the car has another owner’s title, you can still obtain it during the divorce. An asset cannot be divided, but its value can be. Consult a Michigan divorce attorney specializing in asset division to help you.
What is separate and marital property in the context of divorce asset division?
Both partners share the marital property. You get half of each asset’s worth as part of the asset division in a divorce, and your spouse gets the other half. In Michigan, you and your spouse jointly own all marital property. A house or car titled to one spouse can continue to be kept separate if safeguarded from commingling,
Marital Property vs. Separate Property
Knowing the difference between marital and separate properties is essential to comprehending property division. Assets gathered over the course of a marriage are referred to as marital property. Whose name appears on the title or deed is irrelevant. This includes the house, cars, bank accounts, and investments owned jointly. This may refer to additional possessions amassed throughout the marriage. An asset possessed before marriage is referred to as separate property. Gifts and inheritances are two examples of these assets. Through a prenuptial agreement, it may be property that is set aside as separate.
Equitable Distribution in Michigan
In Michigan, the equitable distribution principle is upheld. It demands that assets be distributed fairly. After considering a number of circumstances, the state divides a couple’s assets. Equitable asset distribution does not necessitate a 50/50 share of the assets. Instead, the court makes an effort to determine a fair and just distribution based on the unique circumstances of each case.
Separate Property Getting Commingled
A separate asset may become part of or merge with marital property. There is sufficient legal precedence to explain how this can happen. Here is a circumstance that might make this happen. The family made use of the separate property. It’s also possible that the asset was commingled with marital property. Why does this cause issues with property division? No distinction can be made by the court between separate and marital assets. The commingling puts the division to the test. It will be challenging, if not impossible, for a court to discern between the two. The assets are now subject to distribution during a divorce as a result of the commingling.
Even the tiniest divorce-related issues, such as who gets which cars, can be difficult to tackle. The marital home and associated vehicles may not be instantly passed on by the couple. No one is eligible, not even the spouse whose name appears on the title or deed. Asset distribution will be fair and equal by the court. The court considers the particulars of each case. Make decisions that are fair and just. The longer the marriage, the lines between separate and marital assets start to blur. The demands on the financial resources of families will further make it difficult to make those distinctions. Separating assets will take foresight. Unfortunately, the euphoria of love gets in the way of good foresight.
Can the home and car titled to one spouse be subject to divorce asset division?
A couple’s majority of assets are considered to be joint marital property. Vehicles will be distributed as joint marital property during the divorce. A vehicle is considered separate property if:
- The spouse owned it before the marriage.
- It was given only to the spouse during or before the marriage.
- The spouse inherited it during or before the marriage.
Possible marital funds were utilized by the vehicle’s owner-spouse to purchase it. It probably won’t be considered a separate property anymore. It might now need to be shared as marital property. Comparing the car’s value to the Blue Book estimate will reveal how much it is worth. An evaluation in some circumstances. The remaining balance of any loans on the car will then be subtracted. They add up the worth of the other spouse’s car, the equity in the house, any cash, and any other valuables. They calculate the value of other assets by subtracting this from the total.
How are debts linked to asset division?
Both assets and debts can be accumulated during a marriage. Past debt owed by either one party or both is a component of the partnership. They are handled as separate assets. They are not a part of the equitable distribution procedure. Any debts accumulated during the marriage must be fairly divided between the parties. These include mortgages or credit card debt. Debts are usually linked to assets. The divorced spouse who buys a vehicle is also responsible for paying off the vehicle’s loan. It is still possible for both partners to share debt burdens. After the divorce, these debts were still tied to a joint account. It is very similar to a credit card.
Can we keep separate bank accounts separate?
Many people have kept their money separate from their spouses throughout their marriage. They hold on to the belief that they will keep ownership of their assets. A person’s name on a bank account does not mean that all the money in it is theirs alone. An account may have your name on it. Your spouse’s money has never touched it. You are still not assured of getting all or any of the money in it.
Many people have kept their money separate from their spouses throughout their marriage. They hold on to the belief that they will keep ownership of their assets. A person’s name on a bank account does not mean that all the money in it is theirs alone. An account may have your name on it. Your spouse’s money has never touched it. You are still not assured of getting all or any of the money in it. Under the following circumstances, separate bank accounts may be considered separate property, albeit there may be exceptions that can be claimed in court:
- During the marriage, no money was deposited into the bank account. Any money deposited into this account during the marriage is considered commingled income.
- No money was ever placed from the other spouse’s income, and their name was never added to the account.
- There were no monetary donations made to the account in either spouse’s name. Gifts and inheritances must only be made in the account holder’s name; otherwise, the money is seen as having been mixed with other assets.
Only if it was previously established before the marriage and you don’t intend to add any more money to it or use it to make purchases is it helpful to have a separate account in your own name. When you get married, if you have a separate bank account, it will only be considered separate property and not marital property if neither you nor your spouse utilizes it. If you want to add money to the account or use the money for things like paying bills, a judge will consider the account to be commingled and will classify the account as community property.
How is the car and the loan associated with it handled in a divorce?
Many times, even when one spouse is the one driving the car, the other spouse’s name appears on the title and the loan that goes with it. This can apply to either vehicle at times. Usually, the court will give the car to the spouse who has been using or driving it and will instruct the other spouse to give that spouse the title. The loan will continue to be in the name of the other spouse, though, because the court has no power over the bank holding the loan. The court will also decide that the spouse who was awarded the vehicle must make timely payments on the loan linked with the vehicle and indemnify and hold the other spouse blameless from any litigation brought by the bank in the event of default. This imposes some duty on the other spouse. The other spouse must then take the car owner/driver spouse back to the divorce court and request that the divorce court order the defaulting spouse to pay the other spouse back for the unpaid debt and the legal costs incurred in defending against the default. Even if it is not a perfect answer, the court will most likely proceed in these situations in that manner.
Can the court invade my ex-spouse’s separate property so it becomes part of the property division?
The residual assets in the marital estate will be divided as fairly as possible by the court. Attempting to divide without giving anything to the opposing party. Each party needs to have previously received their own unique property. There are two exceptions: the Court may “invade” the separate property of one spouse. Divide it anyhow. These involve situations where there is evidence of “substantial need” or “contribution.”
The substantial need exception
The rule against the partition of distinct property has an exception. There may be circumstances where property granted is not enough. You can qualify for the substantial need exception. Show proof that there are current needs not met with assets from the property division. The value of the assets cannot cover ongoing payments. Obligations for things like daycare costs and medical bills may be one of these needs. It can also be applied to cut housing costs.
The contribution exception
The Michigan statute MCL 552.401 is the source of the “contribution” exception. When one spouse “contributed to the acquisition,” the court may invade the separate property. The partner contributed to the property’s development or accumulation. One spouse contributes to the development or acquisition of another spouse’s separate assets. The contribution may be viewed by the court as having unique worth deserving of remuneration.
A typical illustration of this is a home bought prior to union. A property that, after a couple gets married, becomes their joint residence. The home becomes more marital as the parties stay there longer. Timing is not governed by any concrete rules. According to the argument, the spouse who is not purchasing is helping to pay off the mortgage.
In general, the law in this area is clear and well-founded. It might not quite line up with what seems fair on the surface. It could seem sensible to organize things separately. Separating the many bank accounts and the varied incomes of the spouses. This is by no means unusual. The way the law is interpreted will always depend on how the judge views the evidence.
How evenly were the funds distributed? Is it necessary to invade the separate property? How much of one spouse’s separate property did the other spouse contribute? What was it that the parties sought to keep secret in the first place? Present your case to the judge. Discover the method courts employ to evaluate cases. You can arrange a property settlement without seeking the assistance of a judge.
How do you keep the home and car you acquired before marriage separate?
A love ending in marriage is great. It is sad that half of these marriages will end in divorce. Often even with your best efforts, you will have to acknowledge that love eventually is lost. The pain of the divorce process sets in. Knowing this possibility, it is best to prepare. You need to keep what is yours separate. Protect it from being commingled with the marital assets. This is how to keep separate property separate
Ensure that property records are accurate
Keep records and books to prove that an asset is a separate piece of property. Keep records and save them. It must show that you received the money you used to buy the item as an inheritance. Use tamper-resistant payment techniques. Make sure that transactional details, such as amounts, asset descriptions, and receivers, are identifiable.
Keep your vehicles and your real estate separate
You may have a house or car before marriage. By keeping your spouse’s name from the title or deed, they can continue to be yours even after a divorce. You can include your spouse in your will or trust if you do want them to inherit the home in the case of your passing.
Maintain property with non-marital funds
The hard part comes at this point. You must maintain assets in your sole name using non-marital funds if you want to keep them that way. It means that you will need to spend funds from an inheritance or premarital account. In the event of a divorce, your spouse will be entitled to the property if they wind up paying for its upkeep.
Keep your funds separate
Do not combine any premarital assets, such as a bank account, with marital assets. The same goes for any inheritance you receive during the marriage. To ensure that these monies stay separate property, keep them in your own separate accounts. Do not include your spouse’s salary, your own income from a job, or any other marital assets.
Maintain ownership of stock in the family business
Make sure all the shares in the family-owned company are still in your name. Before getting married, review the company’s operational papers. Some operational agreements forbid the transfer of stock. It restricts the sale of shares to those who are not the corporation’s blood relatives. Have your lawyer review the paperwork on your company before your wedding. Check to see if anything has to be done. You must avoid having your ownership position in the company viewed as a marital asset.
When you get married, get a valuation of your business
When you get married, have your company valued if you own one. The court can order that your spouse receives only half of the increase in a business’s worth, rather than the full amount. When you got married, your business was worth $1.5 million. When your divorce was finalized, it was worth $3 million. Instead of $3 million, your spouse would be entitled to half of $1.5 million, or $750,000.
Sign a prenuptial agreement if it is still feasible
One of the best methods to protect separate property is to enter into a prenuptial agreement before getting married. The contract spells out exactly how property will be distributed in the event of a divorce. The prenup should specify which assets will continue to be kept apart even if they are upgraded or maintained with help from marital assets. You could still be able to treat the house you inherited as a separate asset. It can be specified in the prenuptial agreement. even if your spouse was going to live there with you. You would still own the residence on an individual basis. Despite the fact that you and your spouse will each contribute money toward the mortgage. Even for purposes of care and maintenance, the house still counts as a separate piece of property.
During the whole divorce process, you will learn certain assets are marital and some separate. This article should make you realize that not all the assets you see will be part of the things you will be dividing after the divorce. Some things you need to embrace as the sole property of your spouse. It doesn’t negate of course your inherent rights as a spouse. Try to understand what constitutes marital and separate properties in a marriage. Your trusted family law attorney in Michigan can give you quite an education about these concepts. You have to be pragmatic about what you can share and what you can’t. In the end, you must realize that Michigan family laws subscribe to fair and equitable distribution of assets. Expect fairness but no more than the law can offer.
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