Equitable Distribution State Explained

Equitable Distribution refers to exactly how assets are divided during a divorce. Many people misunderstand this concept. Rules and laws concerning property status and division vary from state to state. Michigan is an Equitable Distribution State. It is essential to understand what bearing this has on each parties rights.

Marital VS Separate Property

Marital equity is sometimes referred to as community property. Generally, these are assets which were acquired during the marriage. Courts in Michigan apply the rule of Equitable Distribution to the division of community property.

This does not necessarily mean a clean 50/50 divide. This is a common misconception about the word equitable. The central purpose is to divide community assets in a manner which is fair to everyone involved. Separate property is equity obtained prior to the marriage. The original owner usually retains possession of this equity, but there are a few exceptions to this rule.

Equitable is not Strictly 50/50

There are several reasons why marital asset division may differ from the standard. There may also be considerations for dividing the separate property which was acquired prior to the marriage.  Marital property is almost always subject to division between the parties.

However, property division in Michigan follows the rule of Equitable Distribution. This means that rather than splitting the property 50/50, the property is divided “equitably” or fairly.

The judge may also see fit to award a spouse a percentage of equity acquired before the union. It is at the court’s discretion to decide what is just and fair to both parties. For example, the dependent spouse may never be able to attain self-sufficiency. This may be due to chronic illness, aging, a lack of knowledge or an inability to learn new skills.

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Separate property is sometimes subject to Equitable Division if the parties were married for an extended length of time and another reason is that half or even most of the marital equity is not enough to support the dependent parties. The judge may opt to award a portion of the separate property to ensure fairness. The goal is to safeguard the dependent spouse’s livelihood.

Past conduct and the reason for divorce can affect the division of assets as well. If one party is more at fault than the other, the court may divide the marital property unequally. An increase in the value of the separate property can be added to marital equity. This might be due to the other party investing in the property to improve it during the marriage.

The status of separate property may become community because if it was placed into a joint account or was routinely utilized for marital purposes.

The standard rules of Equitable Distribution apply to property division during a divorce in Michigan. There are also numerous variables and circumstances that the court takes into consideration before deciding. Professional legal advice and representation are crucial.

Contact Brian F. Abramson today to schedule legal consultation and allow him to guide you through these treacherous waters.