Marriage can make things complicated. It can complicate and ruin the relationship you and your spouse once shared. And it can complicate your finances.
It’s often hard to see how much marriage blends things until you file for divorce. Then you find that nearly everything you earned or bought has become marital property. It’s hard to get your things unstuck. Accordingly, property division requires clear and careful thinking, especially in high asset divorces.
Your plan for life after divorce
As an equitable distribution state, Michigan does not require a 50-50 split of all your marital assets, but you are expected to divide things fairly. So how do you do that?
Each divorce is unique and brings its own questions, but here are some that you’ll want to ask:
- What does fair mean? There are many factors involved in shaping the fair division of marital property, including each party’s income, age, health and conduct.
- What assets are marital property? With some exceptions, everything you create, earn or buy during your marriage is marital property. If you start your business during the marriage, it’s likely marital property, and even if you owned the business before you got married, your spouse may have some claim to it if he or she contributed while you were married. In addition, you’ll likely need to split up your retirement fund, life insurance and stocks, as well as your house and other property.
- What are your assets worth? When you want to keep your business, or your spouse wants to keep the home, you need to know what things are worth. Getting a good valuation is key.
- What debts do you need to consider? Is there still a mortgage on the house? Will that make it too expensive after the divorce? You may still be responsible for your student loans, and you may not be responsible for credit card debts that are in your spouse’s name only.
- Is your spouse hiding assets? It’s illegal for people to try hiding their assets in divorce, but many still try. If you suspect your house is trying to cheat the process, Forbes identified several common red flags.
- What are the long-term consequences? There are tax consequences to all the different ways you might split your property. And it’s also important to consider the long-term values of assets such as retirement funds versus their immediate values.
