Michigan residents may not be aware that before property can be divided, courts have to determine what is and is not marital property. The things that can be done to protect assets, property, retirement accounts and business assets in a divorce are likely some important questions that many divorcing couples ponder.
It is important for a divorcing couple to understand that any assets and property owned by them prior to marriage is almost always considered separate and thus non-marital property. Non-marital property includes things such as gifts or any inheritance, and assets one person obtained, received or earned before marriage. However, assets and property purchased together after marriage is marital property.
In many cases non-marital and marital assets may be mixed and may lead to complications during property division. For example, when it comes to retirement accounts, before marriage only one party may have been the ,one adding money to the account. However, after marriage both parties may have added money to same account. Thus, the retirement account is now jointly owned. Similarly, when it comes to a homestead, one party may have been the only one paying the mortgage, but after marriage both parties may have contributed toward the mortgage, thus making it marital property. Property division may get even more complex when a couple owns a business together.
However, couples can prevent property division complications and other divorce legal issues by drafting a prenuptial agreement. If a prenuptial agreement is not in place, while still married a couple can also draft a postnuptial agreement to protect their assets. When drafting prenuptial or postnuptial agreements, to ensure that one is entering into a fair deal, it may be essential to work with a family law attorney familiar with such agreements.
Source: Lantana Living, “Protecting your assets in divorce,” Charla H. Bradshaw, Feb. 25, 2014
