In Michigan, like in many states, the division of real estate in a divorce is governed by the principles of equitable distribution. This doesn’t necessarily mean equal division, but rather what is considered fair and just in the eyes of the court.
This article discusses Michigan divorce laws and how real estate property such as homes are divided in a divorce proceeding.
It’s important to note that although this article provides a general overview of these laws and can help point readers in the right direction, Due to the legal, social and financial consequences of a divorce, it is strongly advised to consult with an attorney who’s experienced with divorces in Michigan to ensure you have the best outcome possible.
Determination of Marital vs. Separate Property
Initially, it’s important to distinguish between marital and separate property. Marital property includes assets acquired by either spouse during the marriage, which often includes the family home and other real estate purchased while married. Separate property refers to assets owned by either spouse prior to the marriage, inheritances, or gifts received individually during the marriage. In general, separate property remains with the individual owner, unless it has been commingled with marital assets.
Michigan courts distribute marital property equitably, but not necessarily equally. They consider various factors, including the length of the marriage, the contributions of each spouse to the marital estate (including contributions as a homemaker), the age and health of each spouse, the economic circumstances of each spouse, and any fault in causing the divorce (though this is less emphasized).
Real Estate Considerations
When it comes to real estate, several options are available
Sale of Property: The court may order the property to be sold and the proceeds divided between the spouses.
One Spouse Retains the Property: One spouse may be allowed to keep the property. This could involve buying out the other spouse’s share or compensating them with other marital assets.
Co-ownership: In some cases, especially where children are involved, the court might decide on a temporary co-ownership arrangement. This is less common and usually a temporary measure to provide stability for children.
What Happens to Houses in Divorce?
In a divorce, the handling of a house, which is often one of the largest assets a couple owns, is a significant part of the property division process. The approach can vary based on the couple’s situation, state laws, and the specifics of the divorce agreement.
Here are the common scenarios for dealing with a house in a divorce,
- Selling the House: One of the most straightforward options is to sell the house and divide the proceeds. This is often chosen when neither spouse can afford to maintain the house on their own or if both parties want to move on without any shared assets.
- One Spouse Buys Out the Other: If one spouse wishes to keep the house, they can “buy out” the other’s share. This often involves refinancing the mortgage to obtain the cash needed for the buyout and to remove the other spouse from any mortgage obligation.
- Continued Co-Ownership: In some cases, ex-spouses decide to keep the house jointly for a period, often for reasons such as not disrupting their children’s lives or waiting for a better housing market to sell. This requires a high level of cooperation and clear agreements about mortgage payments, maintenance, and eventual sale terms.
- Deferred Sale or Buyout: The court or the couple might agree to a deferred sale or buyout, particularly when children are involved. For example, the custodial parent might remain in the house until the children reach a certain age, after which the house is sold or one spouse buys out the other.
Offset with Other Assets: Sometimes, the equity in the house is offset with other marital assets. For instance, one spouse keeps the house, while the other receives equivalent value in retirement accounts, investments, or other property.
Court-Ordered Sale or Division: If the couple cannot agree, the court will make a decision based on state laws and the principle of equitable distribution (or community property in some states). This could involve ordering the sale of the house or deciding on a division of the asset that is fair to both parties.
Is My Spouse Entitled to Half My House if it’s in my Name?
In Michigan, whether a spouse is entitled to half of a house that is solely in one spouse’s name depends on whether the house is considered marital or separate property. Michigan follows equitable distribution, which means property is divided fairly, but not necessarily equally.
If the house was bought during the marriage, it’s typically considered marital property and subject to division, even if only one spouse’s name is on the deed. However, if the house was owned by one spouse before marriage, it might be considered separate property and not subject to division, unless marital funds were used for its upkeep or improvement.
The court will consider various factors, such as the length of the marriage, contributions of both spouses to the marital estate, and each spouse’s economic circumstances, to determine a fair division. This approach aims to achieve an equitable, though not always equal, division of assets.