What Happens to Real Estate in a Michigan Divorce?

 Posted on December 16,2022 in Divorce

Dividing virtually any type of assets and debts is a difficult part of any divorce, and real estate ownership is no exception. Both spouses generally make strong claims to ownership of marital property and real estate can be unique among other assets because a family has often lived and created memories within a home, making it more valuable than just its market value. When both partners want to keep a home, or any other category of real estate, what happens? Read this blog to learn more about how real estate is handled in Michigan divorces and then contact an experienced divorce attorney who can help you manage your asset division case. 

How Are Marital Assets Divided in Michigan? 

Before real estate or any other asset owned by either spouse can be divided, it has to be part of the marital estate. If one spouse owned a home or any other real estate before getting married, that property may not be considered marital property, depending on how it was managed during the marriage. Spouses may also have prenuptial or postnuptial agreements that dictate how assets are handled in the event of a divorce. Categorizing marital vs. personal property can be a complex area of negotiation all by itself. 

Once spouses agree on what is part of the marital estate and what is individual property, Michigan law requires the marital assets to be divided fairly. Sometimes this means each spouse gets something close to a 50/50 split, but not always; a spouse’s individual contributions and needs, among other factors, affect the final distribution. 

Certain assets, like cash savings accounts and even retirement accounts and pensions can be divided fairly easily. However, real estate cannot usually have two owners after a divorce; either the spouses must agree as to which of them will own the property after the divorce, or they must sell it and split the proceeds. Rarely does a divorced couple continue maintaining ownership in the same piece of real estate. 

If one spouse is set on keeping the real estate, he or she will still have to split the value of the home with the other spouse. This is usually done by “buying out” the other spouse’s interest in the home, using other assets or by taking out a larger mortgage. While it can be tempting to bargain or borrow your way into exclusive ownership of your marital home, especially if you have young children, this may not necessarily be a good idea. You need to make sure that you can afford to keep up the property, pay for property taxes, and make the mortgage payments, which may not be possible on a single income. Talk to your attorney and discuss the possible ramifications of any property arrangement, including the tax consequences, before you agree to an asset division that could have negative consequences for your future. 

Get in Touch with a Farmington Hills, MI Divorce Lawyer

The first step to securing a favorable divorce decree is understanding your rights under Michigan law. To help you do exactly that, the Oakland County, MI divorce attorneys with Elkouri Heath, PLC offer experienced legal representation throughout your divorce. Whether you need assistance with real estate division, child custody, alimony, or anything else, we are here and ready to get started on your case. Call our offices today at 248-344-9700. 

Source: 

http://www.legislature.mi.gov/documents/mcl/pdf/mcl-chap552.pdf