How are retirement accounts divided during a divorce in Michigan?
Finances are generally the number one issue of contention in a divorce. When couples divorce, they will need to divide their hard earned assets. Some couples that have been married for years may own a home, vehicles, retirement accounts, a business, and savings accounts, among other assets. Dividing the property you accumulated during the marriage is rarely easy. With so much at stake when it comes to financial matters in a divorce, it is critical that divorcing spouses contact a divorce attorney for experienced legal assistance.
Michigan State Law on Property Division
Michigan law requires the fair and equitable division of marital property in a divorce. Per Michigan law, community property must be divided equitably, which may not be the same as equally. Community property is defined as property acquired during the marriage and will include items like a jointly purchased home, checking accounts, and savings. Excluded property could include money received through an inheritance or property owned before the marriage.
Dividing the Marital Home
In a typical divorce, one spouse will fight to keep the home so that they can remain living in it, while the other spouse will agree to take other assets in exchange for the home. While the division of the marital home in such a manner could be best for your situation, it is important that the spouse desiring to keep the home assess whether he or she will continue to be able to afford it. At times, the best option is to sell the home and divide the proceeds.
Retirement Accounts in Michigan
Retirement assets will be considered community property to the extent that one spouse contributed to the account during the marriage. Splitting retirement assets in a Michigan divorce can be complex. The spouse who owns the account will want to establish the number of funds that were in the account prior to the marriage. Further, retirement assets should only be distributed after approval from the judge to avoid tax penalties.
The Role of Prenuptial Agreements
If you and your spouse entered into a prenuptial agreement before getting married, then this agreement should largely govern the division of the marital assets. A prenuptial agreement will dictate who receives what assets and who will bear the burden of what debts. With prenuptial agreements becoming all the more common, it is more likely that divorces in the future will involve a prenup. Contact a family law lawyer for assistance with the financial matters related to your divorce today.