Whether your divorce is amicable or not, there is likely going to be something that you and your spouse both want when you are splitting up your assets. It might be sole custody of the kids, but it can also be a coveted piece of marital property, like a lake house.
How marital property division works in Michigan
Michigan law divides marital property equitably, though not necessarily equally, between spouses. Everything you shared and earned during the marriage is eligible for division, with the exception being funds you brought into the marriage and kept completely separate. If you require a court to decide how you will divide your assets, how much each spouse ultimately receives is determined by a number of factors, including the length of the marriage, age of each spouse, capacity to earn and more.
How to determine equity
Before you meet with your spouse to discuss your options, it’s smart to order your own appraisal of the property in question. This is so that you can protect yourself and know the true value of what you are dividing. After you know how much the property is worth, you would subtract what is owed on the mortgage, if applicable. Whatever remains is the equity of the property.
Three options for dividing a real estate asset
- Sell the house and split the proceeds. This is a clean, cut-and-dry option. You would lose the coveted house, but you would also get rid of the headache and mess involved in keeping it. You would receive your share of the equity of the house instead. You could use that to buy a new, hassle-free lake house, if you like.
- One spouse buys the other out and refinances the property in their name only. This is an option if you and your spouse can agree on who should get the property. In this scenario, one spouse walks away with their share of equity and the other with the piece of property they wanted.
- Hold onto the house for a time, usually for the sake of your children. If you have children who the house is important to, it may be in your best interest to share the house for a time to give children some sense of continuity. This has the potential to create stress and continued tension for you and your spouse, but the arrangement would be temporary in most cases.
As you consider your options, remember that equity is not the only factor to consider when dividing assets. There is a strong emotional component to this process due to the memories attached to those assets. Be sure to work with a lawyer you trust to support you and your interests during this time.