If you are a Michigan resident considering divorce, there are several laws and processes you should know about before taking your first steps.
This guide will take you through how assets get distributed, how child support is calculated, what to do about child custody, and much more.
Let’s get right into it:
Michigan is an equitable distribution state. This means courts will attempt to divide property and assets in a divorce in a fair and equal way but it doesn’t mean that the assets will always be divided on a 50/50 basis.
In a divorce, there are marital assets and separate property.
Marital assets are those accumulated during the course of the marriage up until the day of separation.
Separate property is any property owned by a spouse prior to the marriage as well as some property that has been acquired either by a gift or inheritance. Separate property can become marital property if it is commingled with marital property.
Equitable distribution consists of the court deciding which assets are marital vs. separate property, placing a fair market value on each asset, and then actually dividing the assets. The division of assets is presumed to be fairly equal and a court must clearly explain if there is a deviation from this guideline.
There are several factors that are considered when making an equitable distribution. Some of these include:
In Michigan, any debt acquired during a marriage is the responsibility of both parties, up to the date of separation. Both spouses are liable for repayment.
When it comes to splitting payment of the debt in a divorce, the debt will be split fairly but not necessarily 50-50. Courts may take into account who was responsible for accumulating most of the debt, the ability of one party to pay a debt more readily, and other factors.
A court may also determine that a particular debt will follow the property each spouse is awarded. For example, if a spouse is given a car as part of the settlement, then they would be responsible for making payments and would probably have to buy out the other person’s interest.
It is important to remember that even though one spouse may be assigned the debt, if a spouse can’t make payments or refuses to pay, the nonpayment of the debt will affect both spouse’s credit scores.When nonpayment becomes an issue, a spouse can request that the payments be enforced by seeking relief in court.
In Michigan, when a spouse receives a gift from a third party, that gift is considered separate property and not subject to an equitable distribution of assets.
The exception to this is if the gift was clearly given to both spouses as a couple, then it would be considered marital property.
Any gifts that were acquired through the use of income earned during a marriage are considered marital property. This means if your spouse buys you a car or a diamond ring out of a paycheck while you’re married, then it will be subject to equitable distribution in a divorce.
The person who receives a gift during a marriage and claims it as separate property has the burden of proof to show that the gift or inheritance was intended to be separate property.
There is another exception. When a gifted asset is considered separate, but marital assets are insufficient to support a spouse after division, a court may rule that the gifted item should be considered marital. Michigan laws supporting fairness and equity support this finding.
Inherited property is considered separate property in Michigan. However, an inheritance can become marital property if it is commingled or placed in a couple’s joint account.
The best way to avoid this is to place all inherited assets into a separate account and document all actions accordingly.
Another way to protect an inheritance is to have a spouse sign a post-nuptial agreement whereby he or she agrees that the inheritance belongs to one spouse only, no matter how it is used in the marriage.
Pensions and retirement benefits that are acquired during a marriage are considered marital property and subject to Michigan’s equitable distribution laws during a divorce.
Determining the exact value of pensions and retirement accounts can be complex and often times, a financial expert such as a pension evaluator or a certified divorce financial analyst may be required to make an accurate assessment.
Retirement benefit payments to a former spouse may be made through an “in kind” or “deferred division” method. Usually, a spouse must wait until the pension owner is eligible to collect the retirement money to receive their share.
The retirement plan administrator pays the former spouse directly, in accordance with the court order the plan administrator receives from the judge. Under the offset method a former spouse receives other assets equal to the amount he or she is entitled to from the retirement plan. This may be interest in the family home, other bank account funds, and so forth.
Legally splitting pensions and other retirement funds is a multiple step process. After the divorce has been granted, an attorney or a specialized firm must create a qualified domestic relations order, more commonly referred to as a QDRO.
The QDRO must be approved by the courts and then it can be submitted to the plan administrator who must also approve it. This establishes that a spouse can be considered an alternate payee, and the retirement vehicle is then divided according to the specifics contained in the QDRO.
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In Michigan, all real and personal property acquired before a marriage, or property acquired during a marriage through an inheritance or gift is considered separate property. Separate property remains separate unless it is commingled during a marriage by depositing it into your joint bank account.
Gifts given to one spouse by the other during the marriage are considered marital property. To be considered non-marital property, a spouse must present clear and compelling evidence that the property is separate.
This might be done through the execution of a pre- or post-nuptial agreement or through other similar means.
Unlike child support, there is no set formula to determine if you will receive spousal support in Michigan, or if you do, how much it will be. Courts determine spousal support issues on a case-by-case basis.
The length of payments, if they are made at all, can be for a fixed period or an indefinite period, depending on several factors. In some cases, a judge will order a lump sum payment.
Michigan courts will consider several things, including:
Just as it is with child support payments, all spousal support payments are ordered to be made through the Michigan Friend of the Court Bureau. Terms will be outlined by a special order issued by a judge called a Uniform Spousal Support Order.
Either party can request a change in the amount of spousal support to be paid. A change may be granted if there are new facts or a change in one party’s circumstances.
Due to a recent change in tax laws, for divorce judgments entered after January 1, 2019, spousal support will not be taxable to the person who is receiving the support. It will also no longer be deductible to the person paying the support.
Child support payments in Michigan can be ordered by the courts to help with the costs of raising children who are involved in a divorce. Normally these payments stop when a child turns 18 but can be extended beyond that age if the child is still attending high school full time and has a reasonable expectation of graduating.
Michigan uses a Child Support Formula that determines which parent will pay support and how much based on a number of factors. These include things such as each parent’s income the number of children to be supported, the amount of parenting time for each parent, health, dental and child care costs, education costs, and other related expenses.
All payments of child support shall be ordered to be made through the Michigan Friend of the Court Bureau and the Michigan State Disbursement Unit. Each parent will be required to keep the Michigan Friend of the Court Bureau informed of their address, sources of income, and health insurance coverage.
The amount of child support determined by the Child Support Formula is presumed to be correct unless shown otherwise. Courts are given leeway to deviate from the Child Support Formula if it is determined that a proposed child support arrangement would not meet or would exceed the reasonable needs of the child, or if the ability of each parent to provide support appears to be inappropriate or unjust.
If a parent misses child support payments, then the other parent can petition the courts to force payment through several possible means. This can include withholding the parent’s wages or benefits, placing liens on their property, garnishing tax refunds, and in some cases imposing criminal penalties.
Either parent can also file a motion to ask that the amount of child support be changed. This may happen when custody arrangements change or one parent goes through a job change.
Michigan has adopted the Uniform Child Custody Act to help govern child custody issues related to a divorce in the state. All decisions regarding child custody are based on the principle that decisions will be made with the best interests of the child in mind.
The state recognizes two types of child custody:
Custody in Michigan is determined by the best interests of the child and there are several factors that go into deciding this. Some of these include:
Michigan courts encourage parents to come up with a joint parenting agreement in cases where there are no significant negative factors (i.e. adultery, drug abuse, domestic violence, criminal activity). The plan outlines the rights and responsibilities of each parent in a very detailed fashion.
Parenting plans can be difficult to make, but they don’t have to be. To mitigate all of the issues creating and implementing a parenting plan, try using Our Family Wizard ! Their app is a one-stop-shop for any parents who need help co-parenting during and after divorce.
When parents can’t come to an agreement, the courts will step in and make a final decision.
Because Michigan is a no-fault state when it comes to divorce, substance abuse cannot be cited as a reason to get a divorce.
However, where substance abuse is present in a marriage, it can be used in determining other divorce-related issues. This is probably most prevalent when determining child custody and visitation.
If there is a danger to the child, as there would be with drug or alcohol abuse being present, then courts may restrict or deny visitation or custody of a child for the spouse in question. Courts will always take the best interests of the child into primary consideration and this type of problem represents a clear and present threat to the well-being of the child.
Substance abuse may also have an impact on property division and alimony.
If you plan on using substance abuse as an issue in a divorce, it is best to document the abuse as best as possible and how it has impacted your marriage. This can be done by gathering statements from witnesses or law enforcement, social services agencies, family members or others who can provide first-hand evidence and insights.
Bifurcation means that both parties in a divorce can legally divide their divorce into two stages. The first part satisfies the grounds for the divorce. The marriage is terminated at that point. It also means that the financial aspects of the divorce such as child custody, visitation, child support, alimony or other contentious issues that may have stalled or that have become major sticking points will be finalized at a later date.
The downside of bifurcation is that it can result in two trials and more expenses and if a spouse is looking for a fresh start more quickly, bifurcation can hold one spouse hostage at the whims of the other.
Michigan is one of the handful of states that does not allow bifurcation. All issues in the divorce must be resolved before a divorce in the state can be finalized and each person can claim legal single status.
For this reason, couples often choose mediation or arbitration as a way to work out their differences before filing in court.
Michigan law is simple and straightforward when it comes to disclosing assets in a divorce. It is illegal for one spouse to hide marital assets to the detriment of the other. To achieve a full and equitable division of assets, all marital property and all separate property must be disclosed by both parties.
If there are disagreements about what constitutes a marital vs. non-marital asset, the burden of proof is on the party that made the claim.
If someone fails to disclose assets, they could be charged with fraud and a judge may award 100% of the hidden property to the other spouse.
Accurate disclosure of assets is also required because is impacts whether or not spousal support should be required and what amount of child support should be ordered.
If you suspect that a spouse has not accurately disclosed assets, a formal process known as “discovery” can be implemented, forcing the other spouse to produce necessary documentation.
Defiance of this legal requirement can result in fines and other penalties. In some cases, the issuance of a subpoena may be required or a party may want to engage the services of a forensic accountant.
When a spouse does not participate in a divorce in Michigan due to non-cooperation, it is possible for the other spouse to move forward and get a divorce anyways.
After an initial complaint has been filed and served, a spouse has 21 days to respond to the complaint in the live in Michigan. They have 28 days to respond if they live out of state. In the complaint, you will tell the court how you want to end the marriage in terms of child custody, support, alimony, shared debts and a division of assets, among other things.
If your spouse fails to respond during the allotted timeframe, then you can file a default request with the court. The exception to this is if your spouse is an active members of the U.S. military.
Michigan has a waiting period of two months if you do not have any children. If you do, the waiting period is six months. At the end of either of these periods, you can submit the default judgment to the court for final approval and signature. A default judgment is the same as granting a final divorce decree.
It’s important to note that between the time you file a default request and through the end of the waiting period, a spouse can petition the court and request that the default be set aside. For the set aside to take place, a person must have a good reason for not responding during the initial 21 or 28-day response period.
In relationships where domestic violence is taking place, any actions you take related to divorce are secondary to making sure that your immediate safety or the safety of any children are taken care of first. There are strong safeguards in place by law enforcement and they will take swift actions to make sure all parties are protected.
Prior to filing for divorce, you can ask the court for a Personal Protection Order (PPO) to legally keep your spouse away from you. This action can extend throughout the divorce process.
Domestic violence can include any kind of physical abuse, emotional abuse, stalking, or any other kind of harassment including those made through phone calls, mail, or social media inflicted on one spouse by the other. In cases where domestic violence is suspected, an abuser can be charged and may face serious legal consequences.
Because Michigan is a no-fault state, domestic violence is not cited as a reason for divorce, but it can still have a big impact on aspects of the divorce. If domestic violence can be documented, the abuser may not be allowed any child custody privileges, or visitation may be granted but on a severely restricted and supervised basis. Some communities have supervised visitation centers for this purpose.
In many marriages, a couple will only have health insurance through one of the spouse’s employers. The other spouse relies on this coverage and this can be a major life changing issue when a divorce takes place.
In general, courts require that parties maintain what is already in place during a divorce proceeding, and that will extend to health insurance in most cases. In fact, if you cancel health insurance when a spouse is used to getting coverage from you, then you could be held liable for medical bills if your spouse is injured or needs medical attention before you are divorced.
This also extends to cases where you are already legally separated.
Once a divorce has been finalized, employers will not allow an ex-spouse to remain on a health insurance policy. However, an ex-spouse can apply for COBRA benefits. This is a law that protects people from losing health coverage during major life transitions. It allows you to continue with your spouse’s current coverage for up to 36 months as long as you pay the premiums.
The only drawback is that this can be very expensive because an employer will no longer cover any portion of the premium. A better option may be to purchase health insurance on an exchange as part of the Affordable Care Act.
Health insurance for children is usually part of a divorce settlement and child support/custody agreement. Spouses may agree that children are covered under one spouse’s health insurance and if the purchase of private insurance is required, then it will need to be negotiated as to which spouse pays, or if both spouses must contribute to the costs.
Infidelity and adultery occur when a spouse has sex voluntarily with someone other than their spouse while they are still married.
In Michigan, cheating on a spouse is a felony, punishable by a minimum of one year in jail. It can only be prosecuted if the spouse who is the victim files a criminal complaint, and it must be filed within one year of the offense. Prosecution for this type of crime rarely happens.
Since Michigan is a no-fault state, adultery cannot be used as a grounds for divorce. But it can still have an impact on other parts of the divorce.
Infidelity or adultery may become more of an issue in things such as alimony, child custody or in a division of assets. The court places a primary concern on the well-being of children in a marriage and if it can be shown that adultery has created a negative environment, then custody may be affected to some degree.
If it can be shown that an adulterous spouse spent considerable marital assets on an affair, then this may also have some impact in certain cases when it comes to a division of assets or alimony. The past relations and conduct of the spouses is one of the factors a court can use in reaching an alimony decision.
Judges are required to look at the issue of fault when determining alimony. As a result, adultery can have a significant impact when making this type of decision.
If you or your spouse are a member of the military and want to get a divorce in Michigan, you or your spouse must have legal residency in the state or you or your spouse must be stationed in Michigan.
The grounds for a military divorce are the same as they are for a civilian divorce and only irreconcilable differences must be cited.
Just as in a civilian divorce, once paperwork has been filed in Michigan to begin a divorce, copies must be served on a spouse to give him or her a chance to respond. However, when that spouse is in the military, they have certain protections afforded to them by the Servicemembers Civil Relief Act.
This allows them to postpone the divorce while they are overseas or otherwise not able to adequately respond to the petition due to military service commitments. They are also protected from being held in default from failing to respond in a timely manner.
The Servicemembers Civil Relief Act eases many legal and financial burdens of military personnel and their families who face the added challenges of active duty. A service member may choose to waive delaying the divorce by signing off on paperwork which will then allow the divorce to proceed uncontested.
Normal equitable property division laws apply for a military divorce in Michigan, but the federal government also protects military personnel through the Uniformed Services Former Spouses Protection Act that governs how military benefits are calculated when a divorce takes place.
Federal laws will not allow a military members retirement to be distributed to a spouse unless the couple has been married for 10 years or more while the service member was on active duty.
Normal Michigan child support guidelines, worksheets and schedules are used to determine the proper amount of child support to be paid, but federal law dictates that child and spousal support awards may not exceed 60% of a servicemember’s pay and allowances.
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Jason Crowley is a divorce financial strategist, personal finance expert, and entrepreneur. Jason is the managing partner of Divorce Capital Planning, co-founder of Divorce Mortgage Advisors, and founder of Survive Divorce. A leading authority in divorce finance, Jason has been featured in the Wall Street Journal, Forbes, and other media outlets. He is a Chartered Financial Analyst, Certified Financial Planner practitioner, and Certified Divorce Financial Analyst. You can email him at jason@survivedivorce.com.
