What is Equitable Distribution?

The State of Michigan uses a system of equitable distribution to determine how property and assets are divided during divorce. Equitable distribution does not divide marital property in a 50/50 split and, instead, is divided in a way that the court deems fair and just.

How is Property Categorized During Divorce?

There are three categories used to differentiate property types during divorce. Only marital property is subject to equitable distribution. But what is marital property?

Marital property refers to any property, assets, or possessions that are acquired jointly or individually by either spouse during the life of the marriage. Examples of marital property may include:

  • The marital home
  • Vehicles
  • Real estate
  • Bank accounts
  • Retirement accounts

Separate property includes all assets brought into the marriage or after legal separation by either spouse. These are any assets that you owned prior to marriage, and you still own now. Typically, property that was owned prior to the marriage is returned to its original owner. 

Examples of separate property may include:

  • Any property owned prior to the marriage that still exists today
  • All interest, dividend, or gains received from property, assets, or financial accounts that are separate
  • Inheritances and gifts given to one spouse separately and received during the marriage.

Separate property may be divided between the couple if it has become commingled. Commingled property is separate property that is now viewed as marital property because it was combined with marital property during the marriage. This typically occurs when marital funds are used to maintain or care for the separate property or when the non-owning spouse personally maintains or invests in the property, or the non-owning spouse is added to the account or property and becomes involved in the management of that property.

What Factors Are Used to Determine Property Distribution for Men?

Family courts try to divide marital property in a fair and just way. The following factors are used to determine distribution in all divorce cases:

  • Duration of the marriage: Shorter marriages may result in a less equal division of assets.
  • The contribution of each spouse to the marriage: Financial support from employment or homemaking is considered valuable.
  • Age and health of each spouse: Family court aims not to leave one spouse impoverished during divorce, especially if a spouse has a serious illness preventing employment.
  • Earning abilities of each spouse: Significant earning potential by either spouse is considered against the need for support of young children who live with either parent.
  • Needs of minor children: Property is distributed in a way that provides adequate housing and a similar standard of living as before the divorce for any children involved.
  • Just and reasonable considerations: Domestic violence, infidelity, or waste of assets will be factored into property distribution.

Are Men Required to Pay Marital Debt?

Legally speaking, each spouse is responsible for paying a fair amount of the marital debt, meaning each person should pay about half of the total debt. Marital debt may be divided unequally in the following situations:

  • One spouse is more at fault for the dissolution of the marriage.
  • One spouse is able to pay a higher amount.
  • One spouse is responsible for increasing the marital debt without the knowledge or consent of the other spouse in a way that does not benefit the marriage.

Exceptions to a fair division of marital debts include gambling debts, money spent on extramarital affairs, or money paid for restitution in criminal proceedings. 

Student loans are only considered marital debt if the education was used to support the household.  They are not likely to be considered marital debt, and usually belong to the spouse who borrowed the money, and that person is responsible to pay them after the divorce is final. 

Debt will also stay with the property it is related to. So, if one spouse acquires property with remaining payments, that spouse will be solely responsible for the remaining costs. If only one spouse can afford the fees, they will be given the property. Remaining payments are heavily considered during distribution settlements so as not to place an unfair amount of debt on one spouse over the other.

If neither spouse can afford payments on a property, the property may be sold, and the proceeds will be split between the couple.

Who Decides How Property is Divided?

A judge is the last person appointed to settle property distribution. Several alternatives may be used that grant more control to the couple.

The couple may come to an agreement on the property division, which is a faster and more cost-effective option than court proceedings. Couples that can list all property and debts and agree on how to divide them will only require a judge to review the settlement to ensure it is fair.

If a couple is unable to reach an agreement, they may choose mediation. Mediation involves a court-appointed and neutral third party assisting the couple with the issues of division. If the couple is able to work with the mediator and reach an agreement, then a judge will review the document and agree to the terms if it is fair.

When agreement and mediation are not suitable options, a judge will use the factors mentioned earlier to decide on a fair and just division of property.

How Can Men Protect Assets During a Divorce?

The best way to protect assets is with total transparency and cooperation. A judge will unfavorably view a spouse who attempts to hide or conceal property during proceedings. Other strategies may include:

  • Be aware of state regulations: Divorce laws vary from state to state, so research is pivotal in understanding how assets are to be divided.
  • Close joint accounts to protect credit: Closing shared accounts will protect against liabilities caused by one spouse’s excess spending.
  • Appoint a new beneficiary or power of attorney: If a death or incapacitation occurs before a divorce is finalized, then a slighted spouse will have unchallenged access to medical decisions and finances.

Do You Need an Attorney?

A divorce is challenging and emotional, with legal complexities adding stress to an already unpleasant situation. If you have questions about your rights to assets during divorce, call ADAM American Divorce Association today at 248-290-6675 or fill out a contact form to schedule your consultation.