As a general proposition, gifted and inherited property are not divided on divorce.
The first step a Michigan divorce attorney takes in analyzing property division in a divorce case is to classify the property as marital or separate property. As a general proposition, property acquired by reason of the marriage or during the course of the marriage is marital property and property acquired prior to marriage is separate property.
Michigan court’s and divorce attorneys focus on marital property. Simply put, as a general rule courts divide marital property in a divorce and not separate property. For a more detailed explanation on Michigan property law visit: https://www.thedivorceguy.com/property-division/
What if you were gifted property property during the marriage?
The general rule is gifted property is treated like separate property and not divided in a divorce.
What if the marital property was inherited during the marriage?
The same general rule applies to inherited property. It is not divided in a divorce.
So long as the inherited property was kept separate from the other marital property, that is not commingled, inherited property is also considered separate property and not divided in a divorce. See: Cunningham v. Cunningham, 298 Mich. App. 195 (2010); and Lee v. Lee 191 Mich. App. 73 (1991)
Every law seems to have exceptions this holds true for both gifted and inherited property. Gifted and inherited property can lose their character as separate property and transform into marital property if they are commingled with marital assets and ‘treated by the parties as marital property’ See: Pickering v. Pickering, 268 Mich. App. 519 (1989)
In simple terms, when the gifted property or inherited property can no longer be traced to the separate source, it may be considered marital property.
If you were fortunate to have someone gift your property, it is important to keep your gifted property in a separate bank account. The same rule applies to inherited property.
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By: Daniel Findling