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Understanding property division in a Michigan divorce

On Behalf of | Jul 8, 2024 | Property Division |

Divorce is a complex process that involves sorting out many aspects of a couple’s shared life, including the division of property. In Michigan, the law aims for a fair distribution, but ‘fair’ doesn’t always mean equal. When navigating through property division during a divorce in Michigan, it’s important to ask the right questions to ensure the decisions made align with your future needs and financial stability. 

What are the types of properties involved?

Start by identifying all the property that you need to divide in your divorce. This includes everything acquired during the marriage, whether it’s real estate, vehicles, savings accounts, or furniture. 

It’s also crucial to recognize separate properties, which are assets brought into the marriage by either spouse or received as gifts or inheritance. Separate properties are typically not divided in a divorce.

What Is the value of the property?

Once you have listed all of the property, the next step is to determine their current value. This can involve getting appraisals for real estate, assessing the market value of vehicles, and evaluating financial statements for bank accounts and investments. Knowing the value of your properties ensures that the courts base the division on accurate and current information.

What are the tax implications?

Property division can have significant tax implications. For instance, selling a property might lead to capital gains taxes, and withdrawing early from a retirement account could incur penalties and taxes. Consider the tax consequences of each division scenario to avoid unexpected financial burdens.

How will joint debts be handled?

In addition to assets, it’s essential to consider how you will divide any joint debts incurred during the marriage. This includes mortgages, car loans, and credit card debts. Deciding who will take responsibility for what debt is crucial, as it affects both parties’ credit scores and financial futures.

Is the division truly equitable?

Finally, review the overall division plan to ensure it’s equitable. This doesn’t necessarily mean a 50/50 split but rather that the division is fair based on each person’s financial situation, health, earning ability, and other personal circumstances. Ensuring fairness is crucial for both parties to move forward independently.

By carefully considering these questions, the process of property division in a Michigan divorce can be navigated more effectively, leading to outcomes that support the financial health and personal well-being of both parties involved.