Divorce proceedings under Michigan’s statutes follow an equitable distribution system. You may negotiate a “fair” division of your marital property, which reflects the assets you and your soon-to-be ex-spouse acquired together.
Separate property generally belongs to the spouse who acquired it before the marriage; you may not need to split this portion of your assets. The Michigan Legislature website notes, however, that if a spouse presents evidence of contributing to the other spouse’s separate asset, a judge may agree to a fair division.
How the value of retirement accounts may divide during divorce
If you helped to improve your spouse’s separate retirement account, you may ask for an equitable share. SmartAsset notes that a judge may approve couples splitting the portion of a retirement account, such as a 401(k) or IRA account, that classifies as “marital property.” The value of a retirement account from your wedding date until your divorce could become part of your settlement.
The market value of an account before your marriage, however, may not divide because it classifies as a spouse’s “separate” property. A 401(k), for example, may belong to one spouse as part of an employment compensation package from a job that began before the marriage. These earnings generally classify as a spouse’s separate asset.
How courts may view the value of spousal contributions
A judge may consider how each spouse’s contribution increased an account’s value, even if one spouse did not provide any money. Discussions concerning a fair split, for example, could reflect how long your marriage lasted. The value of contributing to a household, such as by childrearing, could factor into a fair split.
Divorcing couples have options to divide the marital property portion of their retirement accounts. The final divorce decree may highlight each spouse’s fair share.
