Equitable Distribution of Marital Property
Michigan is an equitable distribution state, so judges have a great deal of leeway in deciding who gets marital property in a divorce. The statutes instruct them to begin with the assumption that assets should be divided equally. They can then take certain factors into consideration on a case-by-case basis. These factors can tip the scale in favor of one spouse or the other, ultimately resulting in an uneven split of property. They include anything a judge “deems necessary or appropriate" for making a decision.
Dissipation of Assets
Giving away marital assets is a factor that can affect equitable distribution in Michigan, particularly if it occurs when divorce is on the horizon. The law calls this “dissipation of assets.” If a wife consents to the gift of property and her husband can prove this, the loss of the asset might have no effect on property division. However, if he gave away property without her consent or knowledge, this is ethically and legally wrong under Michigan law. Generally, these issues arise when a spouse transfers ownership of property to a family member or friend with the intention of taking it back after the divorce is final; thus, eliminating any chance of distribution to his wife. If the transaction occurs 10 years prior to divorce, a court might not consider it. If it happens three years before the divorce, its effect on equitable distribution may be far greater, because it can be construed as “divorce planning.”
Michigan’s case law includes several court decisions reflecting the legal ramifications of giving away or dissipating assets prior to divorce. In the 1992 case of Sands v. Sands, the Michigan Court of Appeals decided to give the value of all a spouse’s dissipated assets to the injured spouse. In the 1991 case of Thames v. Thames, the Michigan Court of Appeals ordered the individual who received the marital property to return it to the marital estate so a judge could divide it in the divorce. Judges can and will order an uneven division of property to the wronged spouse to compensate for the wrongdoing. If enough marital property doesn’t exist to adequately compensate her, Michigan law allows judges to “invade” a husband's separate property under some circumstances and order it transferred to his spouse. Separate property is generally anything a spouse owned before marriage or acquired through gift or inheritance.
Before a husband's dissipation of marital assets can have an effect on divorce proceedings, the injured spouse must prove it occurred. If she was aware of the transaction at the time it happened and her spouse gave the property away despite her objections, this becomes easier. She probably knows when the deal took place and who received the property. Her attorney or private investigator can look more deeply into the situation to gather evidence. Otherwise, she might begin to realize as the divorce progresses that certain marital property has vanished. She or her attorney can demand an accounting for its whereabouts through discovery procedures, such as depositions or interrogatories that require her husband to respond to questions under oath. However, if he's taken steps to give away marital property, he may not be entirely honest. Finding evidence of the transaction might be difficult, but it is necessary. A wife can't simply make the accusation and receive compensation from the court without proof.