By Jennifer M. Paine
Attorney, Cordell & Cordell
Common Divorce Rumor #3: “She’ll Get Half of Everything”
Mostly, your divorce court will divide your marital property. Marital property is property you, your spouse, or both of you acquired during the marriage. The same is true for debt. Inheritances and gifts to one spouse, however, are non-marital even if acquired during the marriage.
In "community property states" (a minority), so too are items you and your spouse identify as non-community property, usually in writing. So, "everything" is really not "everything" at all – it is what you acquired between the date of your marriage and the date of your divorce or separation.
Sometimes, the property you think is yours has turned into marital property. There are things you can do to keep your property yours:
First, do not commingle it. Commingled property is assets and debts that were non-marital but which were traded in to acquire new property during the marriage, repaired or enhanced during the marriage with marital funds, or, in some states, treated as marital property by written agreement or use during the marriage.
A good example is a classic car purchased as a bachelor that you remodeled during your marriage with money you earned at work and deposited into a joint bank account. Well, why not simply separate the pre-marriage value, right?
Some courts refuse to do any separating, reasoning that the non-marital property lost its status forever as soon as marital property mixed with it. Other courts will attempt separate valuations if the evidence presented is sufficient. A skilled attorney and expert testimony from an appraiser are essential.
Second, do not invest in it, repair it, rent it or do anything but leave it. Avoid active appreciation. Appreciation is the property’s increase in value. During the marriage, the appreciation may be passive or active.
Passive appreciation is the increase in value due to the surrounding circumstances, not your conduct. Active appreciation is the increase in value due to your contribution, such as remodeling, reinvesting, and so forth.
In most states, passive appreciation is non-marital property. However, active appreciation due to one or both spouse’s involvement during the marriage is. See, e.g., Reeves v Reeves, 226 Mich App 490; 575 NW2d 1 (1997) (rental homes bought before married but remodeled during).
Third, give your spouse a hefty share of marital property to keep it. If your spouse has a sizable share of property, it is less likely yours is invadable.
Invadable property is one spouse’s property the court nonetheless divides because the facts and circumstances of the case, particularly one spouse’s needs, justify division. Each state has a different invasion law, so be sure to research the laws in your state to determine what, if any, invasion will occur in your case.
In general, however, the laws allow invasion if the other spouse “needs” a share of the property due to an inequitable division of marital property or other financially dire circumstances and/or the spouse contributed to the property’s acquisition, use or maintenance.
Finally, keep records! If you want to prove that “everything” your spouse says is half hers is not much at all, you need to prove it with admissible records of who owned or owed what when. Convincing evidence.
Get titles, security agreements, old photos, loan agreements, appraisals, stock certificates, your broker’s account records, and any other record that tends to prove the property is what you say it is, yours.
Testimony about what you remember buying and never, ever, ever using during your marriage, when your spouse staunchly says the opposite, is wholly unconvincing.
Kind of like those lies your family told you.
Jennifer M. Paine is an Associate Attorney in the Detroit, Michigan office of Cordell & Cordell P.C. She is licensed to practice in Michigan, and has been admitted pro hac vice in Illinois, Ohio, and the United States Court of Federal Claims. Ms. Paine received her BA in English and Mathematics from Albion College and graduated Summa Cum Laude. She received her Juris Doctorate from MSU College of Law and graduated Summa Cum Laude.