Is Michigan a Community Property State?

Last Updated on February 2024

No, Michigan is not a community property state. Michigan laws follow the principle of equitable distribution, which means that marital property is divided fairly but not necessarily equally in a divorce proceeding.

It is essential to understand these laws and what will be regarded as your marital property in Michigan divorce process. This will determine how are assets split in a divorce and what you can expect to receive, whether you’re reaching an agreement with your spouse or contesting what they have to offer.

What is a Community Property State?

Community property states are the ones in which courts regard all the assets acquired during a marriage as community property, i.e., something owned by both spouses. The division is based on the law according to which:

• All the material and non-material assets that were gained by spouses during their marriage are considered equitably earned by both of them and, therefore, are subject to equal division.
• Debts are also split equally between each party irrespective of how and by whom they were incurred.
• Both assets and debts are divided in a just manner, so the split might not be completely equal. Courts look at fault, earning capacity, or who took on the majority of debts, among other factors, when making a decision.
• The assets that were acquired before the marriage or those that were inherited or gifted are not subject to division if the spouse who owns it proves that it is a separate property.

There are 9 community property states in the US, and Michigan is not one of them. It follows an equitable distribution law.\

What Is Equitable Distribution of Marital Property?

According to Michigan divorce law, property division is made on the basis of equitable distribution. Equitable distribution of marital property means that the division of assets will be fair and not necessarily equal.

The MI courts review each divorce case in detail and decide who has to be awarded more assets, taking into account many different factors:

• How this or that property was acquired.
• How much each party contributed to getting it. 
• Marriage length.
• The age and well-being of the spouses.
• If one person is taking on more marital debt.
• Whether the couple has children and who will have custody.
• Individual needs of the parties and their kids. 
• How much each spouse earns, or what earning capacity they have.
• The reasons that led to a divorce. 

The length of a marriage is a major factor in court decision-making. The longer the marriage, the more factors the judge needs to take into consideration while dividing assets in a divorce. Besides, wrongdoings such as domestic abuse, adultery, or addiction can also be taken into account by the court.

When it comes to what you might expect to be separate property, with your name on the title, if it was acquired during the marriage, it may be subject to division and considered marital property. If you and your spouse are not in agreement on each of you getting the property with your name on the title, it is best to hire a lawyer if you want to protect your rights to it. 

Dividing a House in a Michigan Divorce

Who gets the house in a divorce in Michigan is the first question many spouses have when they start dealing with property division issues. Even if only one spouse is a legal owner of the house, it doesn’t mean they automatically get all the rights. The same as with other assets, the court will determine how to split the house between the two parties.

If the couple shows a willingness to cooperate, it is best to agree on who will get the house or whether they want to sell it and split the income. Spouses must record their decision in their agreement and present it to the court for review so that the judge can be certain that parties consider the division fair.

If spouses fail to settle, this decision will be made by the court. The judge will check how much each party contributed to maintaining this house along with other factors mentioned above, such as divorce causes, whether there are minor children in a family, and so on. Even if one of the spouses moved out of the family home during a divorce, they would still be eligible to get a part of it.

Division of Debts in a Michigan Divorce

Division of debt in divorce is also based on the equitable distribution principle. Unlike with a community property law, debts are not considered automatically acquired by both spouses and, therefore, cannot be divided without a proper review of each divorce case. However, the couple will likely have to cover the so-called joint obligations, such as household debts or their children’s tuition.

Any debt that was incurred before the marriage is considered separate unless the judge rules otherwise and is the responsibility of only one party. Moreover, according to divorce laws in Michigan, if the debts were incurred as a result of actions of one of the spouses (for example, gambling debts or credit card overdraft), the court may decide not to split them between the parties.

Mortgages, household obligations, medical bills, and auto loans are considered marital debts and are subject to a court division. In order to make a final order, the judge will consider various factors, such as which spouse incurred more debt and why, who gets the house, who has a higher income, etc.

What Is the Difference Between Separate and Marital Property?

Marital property includes assets and debts that were acquired in marriage. However, unlike in community states, if one spouse is an official owner of the property, it may be considered solely as their own depending on marriage length and other factors. Joint property or assets that belong to both spouses on the paper can for sure be divided. These can be family cars, houses, pieces of art, businesses, bank accounts, etc.

Separate property is the one that was earned before marriage or obtained as a present or inheritance. Also, this would often be property in one spouse’s name only. There are a few cases when the separate property may be divided:

• In case the second party will not have enough resources to support their level of life after the divorce.
• If the second party had significantly contributed to maintaining or improving the property.

Distinguishing marital and separate property, and factors that influence its distribution, will help you understand what are you entitled to in a divorce.