Divorce is often filled with drama, which can make the painful emotions of the breakup even more difficult to bear. One aspect of divorce that is especially contentious for Michigan couples is property distribution.
When spouses look at their assets, they may have different recollections about whether they bought that expensive painting together or if one of them owned it before marriage, or what the real value of certain antiques or recreational equipment is. As it turns out, the laws surrounding marital property can be challenging.
While more obvious property such as the family home, vehicles, or annuities and IRAs are obvious, it is common for spouses to overlook valuables and assets that they either forgot about or do not realize are part of marital property and subject to division. Residents of Bloomfield Hills and surrounding areas will want to be prepared when sitting down to negotiate with the other side on these and other issues in the divorce.
What shows up in the inventory of assets?
Michigan is an equitable division state, meaning that the court will take into account all shared assets and debt and come up with an equitable, but not necessarily equal, division. This is why it is crucial that spouses look at both present and future holdings when creating the inventory 0f marital property, so as not to overlook hidden assets, such as:
- A college fund: Many parents set aside a college fund for their children, such as a 529 plan. It is the parent who opened the account who is the account holder, so, even though the child is the beneficiary, they may withdraw funds at any time. If the child is over 18, they are no longer eligible for child support payments, so it is crucial to your child’s future to clarify what this account is for.
- Stock options: If your spouse has them through their employer, getting a full disclosure of these and other employee benefits is essential, even if it means going through the lengthy and expensive process of discovery. This may be even more important if the company will hold the non-employee spouse’s share of options.
- Country club membership: While it may seem a relief to just give it away to the other spouse, many people do not realize that this is an asset that courts view as divisible marital property. As an asset sold at its current value, it can be a sizable investment.
How about taxes?
Depending on how the spouses have filed historically, if they are now filing separately but previously had joint returns, the tax burden may be unequal regarding capital loss carryovers. Capital losses will carry forward from previous years until fully deducted. If both spouses previously incurred losses on their joint returns, they should be able to divide the carryover during property division.