When getting divorced, dividing up assets can become very complicated. The first step is to determine which property and assets couples share and which they own separately.
According to Kiplinger, there are many key differences between marital property and separate property. Understanding these differences is the first step to figuring out complex divorce issues.
What is marital property?
Any property or assets acquired during the course of a marriage is marital property. This includes homes, vehicles, income, work bonuses, retirement contributions, and many other forms of assets and physical property. How you split marital property depends on the laws in your state. Because Michigan is an equitable distribution state, courts divide shared assets in a way that’s most fair according to the circumstances. This differs from 50/50 states, which divide assets down the middle.
What is separate property?
As for separate property, this includes all assets acquired by either spouse before the marriage took place. In addition to income, homes, and cars, separate property can also include things like personal injury settlements, inheritances, and gifts from loved ones.
What kind of issues can arise during asset division?
When you combine assets, it becomes more difficult to determine what you share with your spouse and what you do not. Homeownership can also complicate matters. For example, if your spouse bought a home prior to your marriage, but you helped pay off the mortgage, it is possible that you own some portion of the property.
These problems get more complicated as time goes on, making longer marriages more challenging when it comes to divorce. The best thing you can do is to make a concerted effort to determine what you own jointly within a marriage, and provide documentation of co-ownership to prevent confusion.