Dividing marital property is often the biggest challenge during a Michigan divorce. Couples may spend weeks preparing an inventory of their assets and negotiating about how they will split both their resources and their financial obligations.
High-asset couples are more likely than working-class couples to have protracted disagreements and major complications related to property division during a divorce. The following assets will potentially make a high-asset Michigan divorce particularly challenging.
Stock options and other deferred compensation
Technically, the income earned during marriage is marital property that people have to share with one another when they divorce, but not all income will be readily accessible in someone’s bank account at the time that a spouse files for divorce. Many executives and other highly compensated professionals have compensation packages that include deferred compensation, like performance-based bonuses, retention-based deferred pay and stock options. It can be difficult to determine both what portion of that income is part of the marital pool and also to put a price on those assets for the purpose of property division.
Retirement savings and other financial accounts
When couples have more assets, they tend to hold those resources in a variety of different investments. Retirement accounts like Roth IRAs and 401(k)s and investment holdings are often subject to division in a divorce. In some cases, part of those retirement savings may be marital property and part may be separate property. Frequently, divorcing spouses will require special documents, like qualified domestic relations orders (QDROS) to divide retirement savings without a penalty.
Investment real estate
Real property purchased as a financial investment or source of income can pose a big challenge in a divorce. Spouses may disagree about what that property is worth. They may also disagree about how to handle their real property. Options include allowing one spouse to retain the property after refinancing and compensating the other for its value, selling the property or sometimes continuing to own it jointly.
High-asset couples may invest thousands of dollars in household furniture, wardrobes and personal electronics. While one spouse may have no desire to retain those assets, they still need to know what they are worth in order to negotiate a fair outcome in re: property division.
Seeking legal guidance concerning those assets that can pose a particular challenge during property division proceedings in Michigan divorce can benefit those preparing for a sit-down session with their spouse or a hearing in family court.