Yours, Mine, and Ours

Distinguishing Between Marital and Separate Property

There is a lot of misunderstanding about what affect marriage has on the right of spouses to each other’s property.  Each state has different laws, and many of those laws in Michigan are crafted to allow for the myriad of family situations they must address.  The result is often an unpleasant surprise if the marriage ends in divorce.

In the absence of a valid premarital or marital agreement:

• Property owned by only one spouse at the date of marriage, and still owned at the time of divorce, usually remains their separate property and is returned to the owner.
• Property received by one spouse by gift or inheritance during the marriage, and still owned at the time of divorce, usually remains their separate property and is returned to the owner.
• If the owner of premarital, gifted, or inherited property does not keep it separate, treats it as if it were jointly owned, or commingles it with marital property; it can lose its character as separate property and becomes marital property subject to division. Title alone is not determinative.
• Anything acquired during the marriage, other than by gift or inheritance, is almost always marital property subject to division at divorce. It doesn’t matter who wanted it, paid for it, did the work to get it, took care of it, etc.; because each spouse’s efforts during the marriage are marital efforts in the context of family law.
• Property anticipated to be received after the divorce, that requires action by the anticipated recipient, is usually not marital property, merely an expectancy.
• In some circumstances, property can be part separate and part marital.
• There are exceptions to each of these rules.
• Resolving separate property issues in connection with a separate property dispute at the time of divorce is often difficult, emotionally draining, time consuming, and expensive.

Unfortunately, a lot of people do not even know that there are complex guidelines that guide courts’ decisions about what is yours, mine, or ours as they head into a marriage; much less what those rules are and that they can change if you move to a different state (or country).

How Can a Spouse Keep Their Separate Property Separate
So That They Retain Control Over it Both During and After a Marriage? 

Divorce lawyers see many people who feel cheated out of the benefit of the property they owned before the marriage, or their family’s generational wealth, just because they allowed their spouse to feel like it was “ours” when the marriage was good, or to reduce the likelihood of divorce as the marriage became strained.

• Title alone is not determinative, although transferring property into joint names is a strong indication of an intent to donate it to the marital estate, transforming separate property into marital property.
• Commingling separate property with marital property is also strong evidence of an intent to make it marital. Putting inherited money into an account with earnings or other marital assets can result in a determination it has become marital.
• Where one or both spouses contribute to the maintenance and upkeep of an asset is also an indication that they are treating it as marital. For example, spending weekends and earnings restoring that antique car can make it marital, even though it was purchased before the marriage or inherited.

It is important to get information from an experienced Family Law lawyer about steps you can take to make thoughtful decisions about how to deal with your premarital property and any gifts or inheritances you receive during the marriage.  You can always transform separate property into marital property later, or leave your separate property to your spouse, but you cannot turn marital property back into separate property if it turns out that your marriage is not the loving partnership you deserve and believed it to be.