In a Michigan divorce, only marital property is subject to distribution, which means that only assets obtained while the parties were married will be distributed during divorce proceedings. Michigan adheres to an equitable distribution standard, meaning that property is divided in a way that is fair (which, despite its name, does not always mean equal). This all may seem fairly straightforward, and most of the time it is—especially when parties can agree on who keeps the family home, vehicles, and other major assets. However, even in instances in which parties can agree on the terms of divorce, complications arise. This is especially true when there is commingled property to distribute.
What Does it Mean for Property to be “Commingled”?
In Michigan, property that is marital property is the only type of property that may be divided. This means that any property that was bought together, with marital funds, or acquired during the marriage is subject to distribution. This is true even of debts acquired during marriage. Separate property, on the other hand, is property that was brought into the marriage by a single party. For instance, if a spouse owned a vintage vehicle prior to getting married, he or she would retain all rights to said vehicle post-marriage. The same is true of animals, vacation homes, fine art, and even children. That said, the concept of marital versus separate property can become much more complex when commingled property is involved.
There are several ways in which property can become commingled in a Michigan marriage. The following are just a few examples of how:
- One spouse has a savings from prior to the marriage and said spouse uses all or part of that savings to buy a marital home or another piece of real estate. Both spouses then contribute to the mortgage;
- One spouse has a savings from prior to the marriage and uses all or part of that savings to invest in a business venture that is intended to serve as a means of income for both parties;
- One spouse receives a gift or inheritance that is clearly intended for him or her, but then he or she decides to commingle said gift or inheritance into a joint bank account and/or to make repairs on the marital home; and/or
- One spouse sells stocks that he or she acquired prior to the marriage and decides to commingle the funds into a joint account from which both parties can withdraw them.
Distinguishing Separate and Marital Property When Dealing With Commingled Assets
When it comes to commingled property, the courts will try to distinguish how much of a commingled piece of property is considered marital and how much is considered separate. For instance, in the first scenario in which a spouse invested his or her savings to buy the marital home, the court may simple consider the down payment amount when distributing assets. However, in the final scenario, the situation may not be so clear-cut, as the value of stocks constantly fluctuates.
Retain the Help of an Experienced Property Division Lawyer
At Benson & Associates, PLLC, we have nearly three decades of experience in dealing with standard and not-so-standard divorce issues. If you and your spouse have commingled property, reach out to our Michigan property division attorneys today to discuss your unique situation and possible solutions.