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In a divorce, state law determines how assets are divided

Most people in Michigan probably do not consider that the state in which they live has any effect on their marriage breakup. However, not every state deals with divorce the same way, especially when it comes to the division of assets. Some states follow the concept that equitable and equal are not always the same.

Some states observe the law of community property. A wealthy spouse in one of these nine states can expect his or her earnings and assets to be divided evenly between the spouses. All property, investments, income and accounts that were acquired while the two were married are included in the marital estate. Anything that was owned before the couple married or gifted to one spouse exclusively typically remains the property of that person.

When one spouse earns considerably more than the other, divorcing in an equitable distribution state, such as Michigan, may be more beneficial to the wealthy spouse. In these 41 states, assets are distributed based on a judge's assessment of each spouse's need. The judge may also consider the potential earning power and personal assets of each spouse before arriving at a fair division.

There are a variety of ways to avoid losing half of one's assets in a divorce. One is to make a prenuptial agreement before the marriage that establishes how assets will be divided in case the relationship ends in divorce. A post-nuptial agreement essentially accomplishes the same goals but is executed after the marriage has already occurred. If the moment for those options have passed, one might attempt to reach an agreement with one's spouse before the matter goes to a judge. Consulting one's attorney for advice in this area is a good way to ensure one's cause is defended throughout the divorce process.  

Source:, "The best states to get divorced in if you are much richer than your spouse", Tanza Loudenback, Nov. 16, 2016

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