There are two tenants of Michigan property law. First, is the notion that a court will divide marital property and second, is the notion that a court will not divide separate property in a divorce. However, there are circumstances when separate property can be invaded.
Michigan statutory law authorizes a court to divide property in a divorce that was acquired “by reason of the marriage” MCL 552.19. Generally speaking, property acquired by reason of the marriage is considered marital property whereas property acquired before or after marriage is considered separate property. Simply put, a court will divide marital property (See: Byington v Byington ) and not divide separate property (See: Reeves vs. Reeves , providing that: “each party takes away from the marriage that party’s own separate estate with no invasion by the other party”). However, there are certain circumstances when separate property can be invaded.
When separate property can be invaded.
First, in Pickering v Pickering, the Court of Appeals decided that separate property may become marital property if the assets are commingled with marital assets and are treated as marital property by the parties. “The mere fact that property may be held jointly or individually is not necessarily dispositive of whether the property is classified as separate or marital.” Cunningham v. Cunningham “The actions and course of conduct taken by the parties are the clearest indicia of whether property is treated or considered as marital, rather than separate, property.”
Second, under Michigan Compiled Laws (MCL 552.23) provides that following the division of the marital estate, if the division of the estate is such that the award is insufficient to allow for the suitable support and maintenance of either party a court may invade the separate property of the other party.
Third, under Michigan Compiled Laws (MCL 552.401), invasion of a party’s separate estate is permitted if the other spouse “contributed to the acquisition, improvement, or accumulation of the property.” (See Korth v Korth, quoting MCL 552.401)
“When one significantly assists in the acquisition or growth of a spouse’s separate asset, the court may consider the contribution as having a distinct value deserving of compensation.”
It is important to understand that invasion of separate property is discretionary. There mere fact that property is commingled, an award is insufficient, or contribution towards the acquisition does not automatically transform marital property to separate property. Rather, these circumstances provides a court with the authority to invade separate property if justice so requires.
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