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How commingling properties affect your divorce property division

On Behalf of | Sep 29, 2023 | Firm News

Michigan follows the equitable division of property in divorce, which means that courts divide marital properties fairly and equitably between divorcing spouses. This rule is as straightforward as it can be. However, the complexity lies in categorizing which assets are marital and separate.

Separate property until it is not

Generally, the assets each spouse owns before the wedding are separate properties. Also, gifts and inheritances a spouse receives during the marriage are separately owned.

However, there are instances when separate property becomes marital and, hence, subject to the court’s property division. For one, if a spouse uses a part of their separate property to acquire or improve a marital asset, the portion they used becomes part of the marital asset by commingling. Similarly, if a spouse uses a part of their separate property to improve the other spouse’s separate asset, the court can award the former a share of the improved property.

Another instance is when a separate property has been regularly used for marital purposes. By the nature of its use, the court may categorize the initially separate property as marital.

Lastly, courts can label separately owned cash placed in a joint bank account as marital property.

The right to prove otherwise

Though there is a presumption that properties acquired during the marriage are marital, each party has the right to rebut that presumption by submitting evidence to the court that a property is really their separate asset.

Property division is complex. On top of categorizing assets as marital and separate, the process can involve other issues, such as hidden assets, economic misconduct and similar disputes.

This complex process can get overwhelming if you are a party to a divorce. Nevertheless, you do not have to go through it alone. Working with a legal team that looks out for your best interests can help you protect yourself and your properties during the division process.