Can I avoid splitting my assets in a divorce? People sometimes fear losing their assets after a divorce. Long before you met your spouse, you might have bought a house, a boat, and a pension plan. Do you run the danger of losing these assets in a divorce? The simplest response is no, you don’t.
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Your pre-marriage possessions are regarded as separate property. You run the danger of losing some of those assets if you make them marital. You do this by recording a deed in your spouse’s name to the asset. You gave the marriage the asset as a gift. Your assets’ separate status can be ruined in many ways.
If you married after purchasing a home that you previously owned and added your spouse’s name to the title alongside your own, you have just jeopardized your ownership of the property. You must make sure that the asset’s ownership or title stays with you to safeguard your entitlement to half of the marital asset. You are now co-owners of your house. You recently gave the marriage your share of the house. If you don’t want to lose the asset in a divorce, don’t give up your ownership of it.
WHAT KINDS OF ASSETS MATTER IN MARRIAGE AND DIVORCE?
The fact that neither partner is the sole owner of the marital assets should be made clear to couples. You receive half of each asset’s worth as part of the asset division in a divorce. Your spouse receives the other half. You must be able to tell the difference between separate and marital property.
Separate versus marital assets.
All belongings acquired over the marriage are considered marital property. An example of a marital property under Michigan law is the home. The house the couple bought after their wedding. The money the spouse made while married working as a hotel cashier. The spouse’s pension plan is yet another illustration of marital property.
As opposed to this are assets acquired before marriage. Examples are presents received during the marriage.The inheritances were received while the couple was married. Those mentioned are considered separate property of the spouse. The spouse who made the corresponding purchase, gift, or inheritance.
An inheritance received while still married is considered separate property. While married one spouse gets damages for pain and suffering in a personal injury action. Awarded damages are often deemed to be separate property. Property that is initially separate property may not remain so. It depends on how the parties treat it. A property can be deemed separate for some reason. It may be transferred to the other spouse in a divorce.
Separate versus commingled assets.
Separate property may overlap with or change into marital property. It can happen throughout a marriage. It could be the separate property was combined with the marital property. Or, the separate property was used for the family’s advantage.
A spouse receiving the property contributed to the acquisition. The spouse may even have contributed to the improvement. Or have aided in the accumulation of the property. The receiving spouse may be entitled to a share of the other’s separate property.
You and your spouse are co-owners of all marital property in Michigan. Make sure you protect the area that is meant to belong to you. Only 50% of an asset’s value is discussed when it is brought up during a marriage. Personal assets or separate property is not part of the property division.
HOW DO YOU LOSE YOUR ASSETS IN A DIVORCE?
In a divorce, property obtained “by reason of the marriage” may be divided. This is according to Michigan statute (MCL 552.19). Property gained as a result of a marriage is typically referred to as marital property. Property acquired before a marriage is typically referred to as separate property.The case of Byington vs. Byington. This case clarifies that a court will divide marital assets rather than separate ones (in contrast to Reeves v. Reeves). This is true as long as neither party interferes with the other’s separate estate. Separate property that each party takes from the marriage. Pre-marital assets are your separate property. Separate property can still be invaded under several conditions.
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You can lose your right to your separate property. Here are some circ*mstances or situations it can happen.
Invasion of a party’s separate estate is authorized. It is allowed under Michigan Compiled Laws (MCL 552.401). As we indicated above, it is allowed provided the other spouse contributed to the acquisition and improvement. The spouse has aided in the accumulation of the property.(Korth vs. Korth; MCL 552.401)
The Court of Appeals held that separate property can be combined with marital property if considered as such by the parties. It may become marital property (Pickering vs. Pickering).
It is not always determinative whether the property is separate or marital. It is not just because it can be held jointly or individually (Cunningham vs. Cunningham). There is a clear sign of whether the property is regarded as marital rather than separate. It is indicated by the course of action and conduct of the parties.
After dividing the marital assets the award may turn out to be not enough. It is insufficient to provide adequate support and maintenance to either party. The court may enter the separate property of the other party. (MCL 552.23)
HOW CAN YOU PROTECT YOUR PERSONAL OR SEPARATE PROPERTY IN A DIVORCE?
You must take action to keep separate property status throughout the marriage. Prevent your separate property from being subject to property distribution during a divorce. Here are a few strategies for keeping your property after a divorce.
Prenuptial agreement: sign it.
The best method to protect separate property is to enter into a prenuptial agreement. Sign the prenup before getting married. The contract spells out exactly how property will be distributed in the event of a divorce. It specifies which assets will continue to be kept apart. Keep your asset even if they are upgraded or maintained with help from marital assets. Have your lawyer draft it in a way it represents your vision of how your asset should be kept separate.
Maintain accurate property records.
To show that an asset is a separate piece of property, keep records and books. Keep records that show that the money you used to buy the item came from your inheritance. Keep a paper trail of every step in the acquisition or payment for the asset.
Keep family shares of the business.
Make sure that all the company’s shares, if your family runs a firm, remain in your name. Review the business’s operational paperwork before the marriage. Some operational agreements forbid the transfer of stock. More specifically those who are not related to the company by blood. Before getting married, a lawyer should evaluate the paperwork. See if any special measures need to be done. Prevent your investment in the company from being viewed as a marital asset.
Avoid commingling of assets.
As we mentioned, avoid commingling. During the marriage, keep different assets separate. Never contribute money to a joint account. Don’t buy a shared property with separate finances. Don’t use marital assets to maintain or improve your separate property, either.
As an illustration, refrain from making improvements to a home. A home you separately owned or were given during the marriage. In the same way, avoid making repairs or paying taxes on a separate property with funds from the joint account.
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Goldman and Associates Michigan Family Law Firm is here to with information aboutChild Custody and Divorce in the State of Michigan.
