Some Michigan residents who have accumulated real estate assets might need to decide how to address them during a divorce. If they had a previous plan in place, it might be possible to keep all the assets when property is divided, however, in some cases, real estate assets are part of the marital property and will need to be divided.
Early planning
If real estate is your business or investment, you should consider protecting these assets even before marriage. While some of these options can be done after you have already entered into a marriage, if they are completed too close to the divorce, a judge might still choose to consider the assets as marital property that you must share with your spouse. Some of the options for protecting real estate assets include:
- Setting up an LLC with you as the only manager so that you retain control of the properties
- Setting up a domestic asset trust, which would take your name off the property but allows you to maintain control as the only beneficiary
- Using a prenup or postnup to determine individual and marital property and how it will be handled in case of a divorce
With all these options, it is important not to commingle your individual and marital property. Doing so can then change how the property will be handled during the division of assets.
When the real estate investment is marital property
If you acquired the real estate assets during the marriage, then these assets are considered marital property. If you want to continue holding on to all the property, you might negotiate with your spouse to pay them for the part of the value of the property that belongs to them. In other cases, you might have to negotiate with your spouse for the properties you want to keep in exchange for other assets of similar value.
