Division Of Property, Assets And Liabilities
Michigan is an equitable distribution state with respect to property division. This does not mean that all assets are split equally, but instead that assets and debts are divided fairly based upon the specific facts and circumstances of each case.
Once an action is filed it is important to begin developing a marital balance sheet which reflects all of the property, assets, and liabilities accumulated during the marriage. Equally important during this process is determining the origin of each asset acquired, and whether the asset acquisition occurred prior to or after the marriage.
Assets acquired by either party prior to the marriage through earnings, inheritance, gift, or otherwise are separate property and remain that way during the marriage if they are kept separate during the marriage. However, in certain circumstance, if a separate asset is commingled during the marriage, that separate property can become marital and may be subject to marital distribution.
Whether all or a portion of an asset was acquired by inheritance or before the marriage, this must be identified in addition to whether any such asset was commingled with marital assets.
Marital property, assets and liabilities are those which have been accumulated by either party during the marriage. Therefore, whether either party contributed earnings, retirement or investment accounts, pensions or other assets to the estate during the marriage, these are customarily treated as marital assets and subject to division in a divorce.
Professional practices, closely-held or family businesses or other assets will likely require a valuation to determine the entity value and the income the entity produces for spousal or child support as appropriate.
The ultimate determination and allocation of property, assets and debt can be a complicated and ongoing process. It begins shortly after the case is initiated and continues through discovery until both parties are satisfied that all property, assets and liabilities have been identified for division and distribution.