Dividing property can be a painful, confusing part of divorce. Not only can it be challenging to understand what gets divided and how, but it can also make people feel insecure about their future financial stability.
To better prepare for this part of a divorce, parties should understand what the law says about dividing certain assets and what you can do to protect your future.
Equitable distribution laws
In Michigan, parties divide marital property and debt fairly. This could mean both parties get half, but that’s not always the case. Several factors can affect the distribution, from marital contributions to income and earning potential. However, in many cases, parties will exit the divorce with roughly half of the marital property.
Any assets parties brought into the marriage may be considered separate property, which generally stays with the individual.
Dividing future assets
While that can help explain what happens to the property you already have, it may not help you understand how to divide future assets. For instance, what happens to retirement accounts and pensions?
The amount of money in these plans that you had before the marriage may be separate, but the value at the time of divorce and amount earned during the marriage can be marital property and, therefore, eligible for division.
However, the unique nature of these assets – namely, the fact that they may not pay out for many years – makes them difficult to divide. It may not be fair or financially wise to distribute portions of that money as part of a divorce.
To resolve this, parties can utilize a Qualified Domestic Relations Order (QDRO). This order ensures a payout of these benefits to the non-employee when they are paid to the employee or when he or she reaches retirement age. In other words, with a QDRO, an ex-spouse receives their portion of these accounts when they would normally pay out.
Securing your future
When it comes to dividing assets you have and expect to have in the future, there can be a lot of uncertainty. One way to minimize these uncertainties is to resolve division-related matters cooperatively outside of court. This approach can allow you to retain more control over the outcome.
Dividing property can seem overwhelming, but know that there are skilled legal and financial professionals who can help you navigate this process.