“What is the Difference Between Marital and Separate Property?”

What is the Difference Between Marital and Separate Property?

Usually we think of marital property as property that is obtained by the couple during the marriage.  However, the law in Michigan does not clearly define separate property.  Courts typically adopt a rule that property owned before the marriage, or that comes into the marriage by way of gift or inheritance, is treated as separate and not subject to division in a divorce.  In simple terms, if it was owned by a party prior to the marriage, it would normally be awarded to that party in a divorce.

That being said, sometimes separate property is divided in a divorce, depending on the specific circumstances of the case.  The law generally uses two specific tests:

1. A contribution test. The Michigan statute MCL 522.401, discusses and defines such property as follows: The person claiming the property has contributed to the “acquisition, improvement or accumulation of the property.”
2. Also under the statutes, there is a second test which can be called the needs-based test. Under this test, one of the parties would receive so little from the marital assets that what they receive is deemed “insufficient for the suitable support and maintenance” of that person.  This is under MCL 552.23.

The situation may become more complex when one of the parties receives an inheritance during the marriage, and while married, that property is not kept separate but is instead used by the married couple for various purposes.  This use or combining with other marital property is generally defined as “co-mingling” separate property with joint property, which then causes its character to change into marital property.  For example, if one of the parties inherits a significant sum, and that sum is then used to remodel the kitchen and do other updates of the marital residence, the portion of the inheritance used for that purpose has been co-mingled with marital property and becomes, in effect, marital property.

If you are facing questions about marital property and separate property, in your circumstance, you need to know how to protect what you believe is your separate property and should contact counsel.

If you have any questions about the rules regarding issues of marital property and separate property, please contact one of our family law attorneys at Damon, Ver Merris, Boyko & Witte, PLC.  We are here to help – Curtis R. Witte / December 5, 2017

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