[MI] How can I prepare for divorce to protect assets?

Lexi, Chatbot

I understand that preparing for a divorce can be overwhelming, especially when children are involved. Have you already discussed the divorce with your spouse, or is this still in the planning stages?

Lexi, Chatbot

Are there any specific concerns you have regarding child custody or financial arrangements that you would like to address?

Lexi, Chatbot

Is there anything else the Family Lawyer should know before I connect you?

Jon

Hello, and thank you for reaching out. I’m Jon, a licensed attorney, and I’ll walk you through how Michigan approaches this.

Jon

Michigan is an equitable distribution state under MCL 552.23(1) and MCL 552.401, which means property is divided fairly—not automatically 50/50. Michigan courts follow long-standing case law (including Sparks v. Sparks, 440 Mich 141 (1992)) requiring division based on equity and the circumstances of the marriage.

1. Premarital vs. Marital Property

You purchased the home in 2015 and married in 2017. That timing is legally significant.

Under Michigan law:

• Property owned before marriage is generally considered separate property.
• However, appreciation in value during the marriage may be considered marital if marital efforts or funds contributed to the increase (see Reeves v. Reeves, 226 Mich App 490 (1997)).

Therefore:

• Equity accumulated from 2015–2017 is typically your separate property.
• Equity growth from 2017 to present is potentially marital property, especially if marital income was used to pay down the mortgage or improve the property.

2. How Courts Typically Analyze This

If total current equity is approximately $100,000, the court would typically:

1. Determine the home’s value and mortgage balance as of the date of marriage (2017).
2. Set aside that premarital equity to you.
3. Calculate the increase in equity from 2017 to present.
4. Divide that marital portion equitably.

Equitable does not necessarily mean equal. Courts may adjust percentages based on fairness factors.

3. Survivor Benefits

Your children’s survivor benefits under 42 U.S.C. § 402(d) are federal Social Security benefits payable for the benefit of the child. Those funds legally belong to the child and are intended for support.

Michigan courts do not treat Social Security benefits as divisible marital property, and federal law preempts state courts from dividing Social Security benefits as property (see Hisquierdo v. Hisquierdo, 439 U.S. 572 (1979), applied broadly to Social Security protections).

If those benefits helped subsidize housing, utilities, or general household expenses, that fact is relevant. It supports the argument that marital income alone was not solely responsible for building equity in the home.

4. Michigan Equitable Distribution Factors

Under Sparks and related case law, courts consider:

• Duration of the marriage
• Contributions of the parties to the marital estate
• Age and health of the parties
• Life status and earning abilities
• Needs of the parties and children
• Source of the property
• General principles of equity

Your marriage began in 2017. In divorce terms, that is considered a relatively shorter-term marriage. Michigan courts are often reluctant to significantly redistribute premarital assets in shorter marriages absent strong equitable reasons.

5. Likely Structure of Division

A common equitable framework would be:

• Determine current fair market value.
• Subtract current mortgage balance.
• Determine equity at date of marriage (set aside to you).
• Divide only the equity growth during the marriage.
• Adjust based on contributions and fairness factors.

That analysis frequently results in a buyout that is significantly less than half of total current equity, particularly where there was substantial premarital ownership.

The key evidence in your case will be documentation of the home’s value and mortgage balance in 2017, mortgage payment history, and proof of how household expenses were funded.

Jon

Yes. Michigan allows uncontested divorces.

If you both agree:

• One attorney can draft the documents.
• The other spouse signs as unrepresented.
• Filing fees are typically around $175–$225 depending on county.

Because there are minor children in the household, Michigan requires a 6-month waiting period under MCL 552.9f. Courts can sometimes shorten it to 2 months for good cause when both parties agree.

You can absolutely structure a settlement that:

• Recognizes the home as premarital.
• Identifies the marital portion clearly.
• Sets a defined buyout amount.
• Avoids a full 50% division of total equity.

Jon

Yes. The Social Security Administration requires those funds to be used for the children’s “current needs,” which includes housing and utilities. It is entirely appropriate to explain that those benefits supported household expenses. That does not mean you are claiming the children “own” equity — it simply explains that marital income was not the sole source of the household’s financial support.

Even indirect contribution — meaning the funds covered living expenses generally — is a reasonable explanation in settlement discussions.

Jon

This is an important distinction:

1. Ownership (title) is removed by a Quitclaim Deed.
2. Mortgage liability is controlled by the lender.

If there is a mortgage, removing him from title does not remove him from the loan.

Typically you must either:

• Refinance into your sole name, OR
• Obtain lender approval for a mortgage assumption (less common but possible)

If refinancing is required, it would be at current interest rates. Divorce does not preserve your old rate automatically.

Some settlements address this by:

• Giving a defined period to refinance.
• Agreeing to sell if refinancing fails.
• Structuring a temporary arrangement (though this carries risk to the spouse remaining on the loan).

You cannot remove him from the mortgage without lender approval. A divorce judgment does not override the loan contract.

Because your credit is higher but income is lower, qualification would depend on:

• Your income alone
• Debt-to-income ratio
• Current interest rates

This is often the practical piece that determines whether keeping the house is feasible.