In the case of Szcygiel v. Szcygiel, the husband challenged the trial court’s finding that a home acquired by the parties during the marriage by an inheritance was his wife’s separate property.
The parties married in 1980 and had two children. The marital home was on one acre in Kingston, Michigan. The wife’s parents lived on an adjoining 62 acre parcel of land. During the course of the parties’ marriage, the husband testified that he re-roofed his in-laws home and did yard work and other projects. In 1999, wife’s father passed away and in 2005, the husband renovated a pole barn on his in-laws property to conduct business. In 2013, wife’s mother gave her the 62 acre property. The husband continued to operate his business out of the 62 acre property pole barn until the wife filed a complaint for divorce in 2015.
The trial court awarded the wife the 62 acre property given to her during the marriage as her separate property and the husband appealed.
There are two doctrines (rules) important in dividing property in a divorce..
The first doctrine is that only marital property is divided in a divorce, and not separate property. Marital property is property that came to either party “by reason of the marriage” or “during the course of the marriage”. The second doctrine is that separate property is not divided in a divorce. Separate property is property acquired before or after marriage. However, there are exceptions to these general rules.
One exception to the general rules is set forth in Dart v. Dart, 460 Mich 573, 584-585 (1999). The exception provides that property received by a married party as a gift or inheritance is separate property, even if the property was acquired during the course of the marriage.
In the Szcygiel case, the wife argued that since her parent’s property (the 62 acres) was an inheritance it was her separate property. The husband argued that the 62 acres was marital relying on another exception to the general rule on separate property.
The husband argued that his wife’s inherited 62 acre property grew in value because of his efforts in renovating the pole barn and replacing the roof. He argued that he was entitled to the increase in value of the property because of his efforts in making improvements.
The husband’s argument has merit under Michigan law as an exception to the doctrine that court’s do not divide separate property. Michigan Compiled Laws section 552.401 allows a spouse to be compensated for the acquisition or growth of a spouse’s separate property. While the wife does not dispute that her husband did work on the property, she argued that the work did not increase the value of the 62 acres.
The trial court and the Michigan Court of appeals agreed with the wife, stating, “[t]here were no proofs presented that indicated that plaintiff’s [husband’s] work had actually resulted in an increase to the value of the property . . .” As a result, Ms. Szcygiel was awarded the 62 acre property she inherited from her mother as her separate property and her husband was not happy.
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By: Daniel Findling
Michigan divorce law update: The dangers of commingling property (assets).