WHAT IS MARITAL PROPERTY IN A DIVORCE

WHAT IS MARITAL PROEPRTY.
Every thing of economic value to a marriage—tangible or intangible property, job skills, educational degrees, future entitlements—may be viewed in some sense as a property interest.

Terry Ray Bankert is a Michigan Attorney specializing in Family Law, and works as a Flint Divorce Attorney, Flint Divorce lawyer, Genesee Divorce Lawyer and Genesee Divorce Attorney.(SEO) For help with your questions call 810-235-1970. Or http://www.attorneybankert.com/  . Principle Source ICLE 09/16/10


THE FOLLOWING IS A  PARTIAL SHOPPING LIST OF WHAT ARE MARITAL ASSEST.
A. Assets Earned During the Marriage



Assets earned by a spouse during the marriage are part of the marital estate. McNamara v Horner, 249 Mich App 177, 183; 642 NW2d 385 (2003).



B. Post Filing Acquisitions



Property to be received even after the divorce is marital property if the property was earned during the marriage. McNamara at 183.



C. Retirement Plans



Vested and unvested interests in retirement plans are marital property. MCL 552.18(1)–(2). In fact, MCL 552.101(4) requires that each judgment of divorce shall determine all rights of the parties as to all retirement plans. The Michigan Supreme Court agreed when it adopted MCR 3.211(B)(2).



D. Marital Home Appreciation



Appreciation in a marital home is considered a part of the marital estate:



The sharing and maintenance of a marital home affords both spouses an interest in any increase in its value (whether by equity payments or appreciation) over the term of the marriage. Such amount is clearly part of the marital estate. However, the down payment, the equity built up before the parties’ marriage, and any appreciation that occurred before the parties’ marriage should have been considered defendant’s separate estate. Reeves at 495–496.





As held by Reeves, where one party makes a down payment on a home from premarital (i.e. separate) assets, that down payment should be returned to the contributing spouse upon divorce as his/her separate property. Nonetheless, seemingly contrary to this rule, the Court of Appeals recently in Cunningham v Cunningham, ___ Mich App ___, ___ NW2d ___ (Docket No. 285541, decided 7/13/10), held that the husband’s contribution of $90,000 from his premarital worker’s compensation award toward the down payment on the marital home was sufficiently “commingled” with the marital estate so as to lose its character as separate property.[7]



E. Worker’s Compensation Benefits and Awards



Worker’s compensation benefits and awards are considered marital property subject to division. Petrie v Petrie, 41 Mich App 80, 84; 199 NW2d 673 (1972) (affirmed appointment of FOC to collect worker’s compensation award to pay alimony and child support per JOD); Evans v Evans, 98 Mich App 328, 330; 296 NW2d 248 (1980) (workers’ compensation proceeds received during the course of the marriage considered marital property subject to division); Smith v Smith, 113 Mich App 148, 151; 317 NW2d 324 (1982) (“Since the Worker’s Disability Compensation Act was promulgated to assist both the worker and her spouse, the trial court did not err when it included the compensation as part of the marital assets.”); Lee v Lee, 191 Mich App 73, 80; 477 NW2d 429 (1991) (workers’ compensation benefits properly included in the marital estate); and Hagen v Hagen, 202 Mich App 254, 258–260; 508 NW2d 196 (1993) (division of payments on workers’ compensation claim for injury that occurred during the marriage found proper).



However, as held recently in Cunningham, supra, ___ Mich App at 14–15:



Because a spouse’s earnings are classified as marital property only between the beginning and end of the marriage, see Bone v Bone, 148 Mich App 834, 838; 385 NW2d 706 (1986), we hold that worker’s compensation benefits are to be considered marital property only to the extent that they compensate for wages lost during the marriage, i.e., between the beginning and end of the marriage. Any compensation benefits awarded for time periods before the marriage or after its dissolution are akin to a party’s individual earnings and are to be considered separate property, as those earnings fall outside the beginning and end of the marriage.





F. Retention Bonuses



A “retention bonus” paid to the husband during the marriage was held not to be divisible marital property where it was subject to forfeiture unless the husband remained employed until a date after the divorce. Skelly v Skelly, 286 Mich App 578, 780 NW2d 368 (2009). Reasoning that this “retention bonus” would not really be earned until after the divorce, the Court of Appeals reversed the trial court’s classification of this asset as marital property.



Practice Tip: It is important to distinguish a Skelly-type retention bonus, which was payable for remaining employed post divorce, from nonvested or deferred benefits that are intended as compensation for services during the marriage, which are divisible, but will be paid post-divorce.



G. Stock Options



Stock options are divisible marital assets. Everett v Everett, 195 Mich App 50; 489 NW2d 111 (1992).



H. Employee Stock Ownership Plans



Employee stock ownership plans (ESOP’s) are divisible marital assets. Burkey v Burkey (On Rehearing), 189 Mich App 72; 471 NW2d 631 (1991). Even unvested rights in a stock/annuity plan are divisible. Vollmer v Vollmer, 187 Mich App 688, 690; 468 NW2d 236 (1990).



I. Vacation and Sick Time



Employee benefits must always be considered when identifying assets comprising the marital estate. “Banked” vacation and sick time can be divisible marital assets. The key is whether the employee will receive payment for the accumulated time if not used before retirement. Lesko v Lesko, 184 Mich App 395, 401–402; 457 NW2d 695 (1990).



Practice Tip: The Lesko decision points out that while these employee benefits are divisible marital assets, it is error not to reduce the value of these assets by considering the tax consequences associated with the receipt of these taxable assets.



J. Advanced Degrees



Where an advanced degree is the end product of a concerted family effort, involving the mutual sacrifice, effort, and contribution of both spouses, there arises a “marital asset” subject to distribution, wherein the interest of the nonstudent spouse consists of an “equitable claim” regarding the degree. However, an evaluation of the equitable claim does not include valuing the degree. Instead, the focus of an award involving an advanced degree is not to reimburse the nonstudent spouse for loss of expectations over what the degree might potentially have produced, but to reimburse that spouse for unrewarded sacrifices, efforts, and contributions toward attainment of the degree on the ground that it would be equitable to do so in view of the fact that the spouse will not be sharing in the fruits of the degree. Postema v Postema, 189 Mich App 89; 471 NW2d 912 (1991).



Practice Tip: In the same case, the court held that a nursing degree was not an advanced degree subject to the nonstudent spouse’s equitable claim. Postema at 108, citing Sullivan v Sullivan, 175 Mich App 508, 512; 438 NW2d 309 (1989). The undergraduate degree in Sullivan was a Bachelor of Arts degree.



K. Health Insurance Refund



A participant on the SBM—FLS[8] listserv asked whether a (large) refund from the parties’ group health insurer for medical costs paid over the course of a year for the family constituted a marital asset. The question is more properly framed as how would the refund check be characterized if it is not considered a marital asset. The check is not “income” for support purposes, and it is not separate property to the employee-spouse for the same reason retirement benefits are not separate property. The check is clearly a marital asset.



L. Employee Buyout



Another listserv participant inquired whether the proceeds of a General Motors 1-time employee buyout in the amount of $35,000.00 is a marital asset, where the employee-spouse has been working at GM for 28 years, and the marriage is only 6 years in duration. Once again, assuming the payout is not specifically deemed a replacement for future earnings, the check is clearly a marital asset. How the check is divided between the parties, in terms of the Sparks[9] factors, and coverture considerations (frequently utilized when dividing defined benefit plans under the deferred division method), is beyond the scope of this presentation

Terry Ray Bankert is a Michigan Attorney specializing in Family Law, and works as a Flint Divorce Attorney, Flint Divorce lawyer, Genesee Divorce Lawyer and Genesee Divorce Attorney.(SEO) For help with your questions call 810-235-1970. Or http://www.attorneybankert.com/  . Principle Source ICLE 09/16/10

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