Property division is often where divorcing spouses feel most confident—and lose the most money. Many enter the process assuming fairness is obvious: keep what’s in your name, split everything else, and move on.

Michigan law takes a very different view. Property division is not about labels, emotions, or what feels earned. It is about equitable outcomes, economic reality, and the long-term ability of both spouses to move forward. Good property positions fail most often when they rely on assumptions instead of strategy.

At Boroja, Bernier & Associates, we help clients throughout Southeast Michigan navigate property division with a clear strategy and realistic expectations. Here’s what you need to know about how Michigan divides assets and debts in divorce.

Equitable Distribution: Fair Doesn’t Always Mean 50/50

Michigan’s equitable distribution framework gives judges broad discretion to balance fairness across the entire marital estate. Courts do not evaluate assets in isolation. A lopsided division of one asset may be justified by how other assets, debts, or support obligations are allocated. This holistic approach is often where expectations and outcomes diverge.

Michigan is an equitable distribution state. Under Michigan case law, courts divide marital property in a way that’s fair given the circumstances of each marriage—not automatically down the middle.

In many cases, equitable does mean roughly equal. But judges have discretion to award one spouse a larger share when the facts justify it. Factors that might lead to an unequal division include:

• Length of the marriage. Longer marriages often result in closer to equal splits, while shorter marriages might see each spouse leaving with what they brought in.

• Each spouse’s contributions. This includes financial contributions like income and investments, but also non-financial contributions like homemaking, child-rearing, and supporting the other spouse’s career.

• Each spouse’s needs and circumstances. A spouse with health problems, limited earning capacity, or primary custody of children might receive a larger share to ensure stability.

• Fault or misconduct. While Michigan is a no-fault divorce state under MCL 552.6, conduct during the marriage—like hiding assets, wasting money, or domestic violence—can influence how property is divided.

• The parties’ ages and health. Courts consider how long each spouse has to rebuild financially and whether health issues limit their options.

The goal is an outcome that allows both spouses to move forward with a reasonable foundation. What that looks like varies significantly from one divorce to the next.

Marital Property vs. Separate Property

Not everything you own gets divided in divorce. Michigan distinguishes between marital property (which is subject to division) and separate property (which generally stays with the original owner).

Marital property includes most assets and debts acquired during the marriage, regardless of whose name is on the title. This typically covers:

• The family home and any other real estate purchased during the marriage
• Vehicles bought during the marriage
• Bank accounts, investment accounts, and cash accumulated while married
• Retirement accounts and pensions earned during the marriage
• Businesses started or grown during the marriage
• Furniture, jewelry, and other personal property acquired together
• Debts incurred during the marriage, including credit cards, mortgages, and loans

Separate property generally includes:

• Assets owned before the marriage
• Inheritances received by one spouse, even during the marriage
• Gifts given specifically to one spouse
• Property excluded by a valid prenuptial or postnuptial agreement

Here’s where it gets complicated: separate property can become marital property through “commingling.” If you inherited $50,000 and deposited it into a joint account used for family expenses, that inheritance may have lost its separate character. Similarly, if you owned a house before marriage but used marital funds to pay the mortgage and make improvements, your spouse may have a claim to a portion of the equity.

One of the most common mistakes in property division is confusing ownership labels with economic reality. Whose name is on an account matters far less than when the asset was acquired, how it was used, and what it is actually worth after taxes, debt, and liquidity constraints are considered.

Separate property claims often fail not because the law is unfavorable, but because the evidence is incomplete. Tracing requires documentation. Absent clear proof, courts err toward classification as marital property. The burden of proof matters—and it is frequently underestimated.

Tracing what’s truly separate versus what’s become marital often requires careful documentation and sometimes forensic accounting.

The Marital Home: Options for Division

For most families, the house is the largest asset—and the most emotionally charged. There are several ways to handle the marital home in divorce:

The marital home is the most emotionally powerful—and financially misleading—asset in many divorces. Spouses often overvalue home equity while undervaluing the long-term costs of ownership, refinancing barriers, and lost retirement growth. Courts regularly approve outcomes that look uneven on paper but are economically rational over time.

• Sell and split the proceeds. This is often the cleanest option. The house goes on the market, sells, and both spouses divide the net proceeds according to their agreement or the court’s order. This works well when neither spouse can afford the home alone or when both want a fresh start.

• One spouse buys out the other. If one spouse wants to keep the house—often the parent with primary custody of children—they can buy out the other spouse’s equity share. This usually requires refinancing the mortgage into one name alone. The buying spouse needs to qualify for the new loan independently.

• Deferred sale. Sometimes couples agree to delay selling the house until a specific event—like the youngest child graduating high school. One spouse stays in the home during this period, and proceeds are divided later. This maintains stability for children but requires ongoing cooperation between ex-spouses.

• Co-ownership. Rarely, divorcing couples continue to own property together as an investment. This is uncommon and generally only works when both parties are unusually cooperative and have clear agreements about expenses and eventual sale.

Each option has financial and practical implications. Consider not just the emotional attachment to the home, but the ongoing costs of ownership, tax consequences, and your ability to qualify for financing.

Retirement Accounts and Pensions

Retirement assets are often the second-largest category of marital property—and dividing them correctly requires attention to detail.

Retirement assets often lose out to more tangible property because their value feels abstract. Judges, however, view retirement accounts as foundational to post-divorce stability. Parties who trade retirement security for short-term convenience frequently regret the decision once taxes, penalties, and market growth are considered.

The portion of retirement accounts earned during the marriage is typically marital property, even if the account is in only one spouse’s name. This applies to 401(k)s, IRAs, pensions, and other retirement vehicles.

Dividing these accounts isn’t as simple as writing a check. For most employer-sponsored plans, you’ll need a Qualified Domestic Relations Order (QDRO)—a court order that directs the plan administrator to divide the account between the spouses. Without a properly drafted QDRO, the plan won’t release funds to the non-employee spouse.

Pensions present additional complexity because their value depends on future events—how long the employee works, what their final salary is, and how long they live. Valuing a pension often requires expert analysis.

IRAs don’t require QDROs but must be transferred pursuant to the divorce decree to avoid taxes and penalties. The transfer must be handled correctly to preserve the tax-advantaged status of the funds.

Getting retirement division wrong can cost thousands in unnecessary taxes and penalties. This is one area where professional guidance pays for itself.

Dividing Debts

Divorce isn’t just about dividing what you own—it’s also about dividing what you owe. Marital debts are subject to equitable distribution just like assets.

Common marital debts include:

• Mortgages and home equity loans
• Car loans
• Credit card balances
• Student loans taken during marriage (though this can be complicated)
• Medical bills
• Personal loans

The court will assign responsibility for debts as part of the overall property division. However, there’s an important caveat: the divorce decree only binds the spouses, not creditors.

Assigning debt in a divorce decree does not eliminate personal exposure. Courts expect parties to understand that creditors are not bound by divorce judgments. Agreements that leave joint debt unresolved or unsecured are common sources of post-divorce litigation and credit damage.

If the court orders your ex-spouse to pay a joint credit card and they don’t, the credit card company can still come after you. You might have a claim against your ex for violating the divorce decree, but that doesn’t prevent damage to your credit. Whenever possible, pay off joint debts before finalizing the divorce or refinance them into the responsible spouse’s name alone.

Protecting Your Share: The Discovery Process

You can’t divide property fairly if you don’t know what exists. The discovery process in divorce allows both spouses to obtain complete financial information.

Property division outcomes are shaped as much by discovery as by law. Incomplete financial disclosure, rushed valuations, or failure to subpoena third-party records often leads courts to divide based on the information available—even when it is imperfect. Precision in discovery protects leverage.

Discovery tools include:

• Interrogatories—written questions the other spouse must answer under oath.

• Requests for production—demands for documents like bank statements, tax returns, pay stubs, and business records.

• Depositions—in-person questioning under oath, recorded by a court reporter.

• Subpoenas—orders requiring third parties (like banks or employers) to produce records.

If you suspect your spouse is hiding assets, discovery is your opportunity to uncover the truth. Forensic accountants can trace hidden funds, analyze business valuations, and identify lifestyle inconsistencies that suggest undisclosed income.

Being thorough during discovery protects you. Being honest during discovery protects you too—courts impose serious consequences on spouses who lie about or hide assets, including awarding the hidden assets entirely to the other spouse under MCL 552.19.

Common Property Division Mistakes

Avoiding these pitfalls can save you significant money and stress:

• Focusing on the house at the expense of retirement. The family home has emotional value, but it also has ongoing costs—mortgage, taxes, insurance, maintenance. Meanwhile, retirement accounts grow tax-deferred for decades. Don’t sacrifice your retirement security for sentimental attachment to a property.

• Ignoring tax consequences. A $100,000 investment account and $100,000 in retirement funds aren’t equivalent. The investment account basis, capital gains, and retirement account taxes all affect real value. Compare after-tax values, not just face values.

• Accepting verbal agreements. If it’s not in the divorce decree, it’s not enforceable. Get every agreement in writing and approved by the court.

• Forgetting about debt. Focusing only on assets while ignoring who’s responsible for debt can leave you in a worse position than you expected.

• Not updating beneficiary designations. After divorce, update beneficiaries on retirement accounts, life insurance, and other assets. Otherwise, your ex-spouse might inherit assets you intended for someone else.

Frequently Asked Questions About Property Division in Michigan

Is Michigan a 50/50 divorce state?

No. Michigan is an equitable distribution state, meaning courts divide property fairly—which may or may not be equally. Judges consider multiple factors including each spouse’s contributions, needs, and conduct.

Can I keep my inheritance in a Michigan divorce?

Generally, yes—if you kept it separate. Inheritances are typically separate property. However, if you deposited inherited funds into a joint account or used them for marital purposes, the inheritance may have become commingled and subject to division. The burden of proving separate character falls on you—and that requires documentation.

What is a QDRO and do I need one?

A Qualified Domestic Relations Order is a court order that divides retirement accounts in divorce. You need a QDRO to divide most employer-sponsored plans like 401(k)s and pensions. Without one, the plan administrator won’t transfer funds to the non-employee spouse.

How are business assets divided in Michigan divorce?

Businesses started or grown during marriage are marital property. Division typically requires professional valuation. Options include one spouse buying out the other, selling the business and splitting proceeds, or in rare cases, continuing to co-own the business.

What happens to debt in a Michigan divorce?

Marital debts are divided equitably along with assets. However, the divorce decree only binds the spouses—not creditors. If your ex doesn’t pay a joint debt, creditors can still pursue you.

Why do spouses with strong property claims still lose?

Good property positions fail for predictable reasons. Overvaluing the family home while undervaluing retirement accounts. Failing to document separate property with enough precision. Ignoring how debt allocation creates ongoing exposure. Treating ownership labels as conclusive when courts care about economic reality. The law may favor you, but courts decide based on evidence and strategy—not assumptions.

Take the Next Step: Protect Your Financial Future

Property division shapes your financial life after divorce. Understanding what you’re entitled to—and protecting your share—requires preparation, documentation, and often professional guidance.

At Boroja, Bernier & Associates, our family law attorneys help clients in Macomb County, Oakland County, Wayne County, and throughout Southeast Michigan navigate property division with strategic focus. With our main office in Shelby Township and satellite offices in Troy, Ann Arbor, and Lansing, we’re here to help you understand your options and pursue a fair outcome.

To schedule a consultation with the Michigan family law attorneys at Boroja, Bernier & Associates, call our law offices at (586) 991-7611. We’ll help you understand what your marital estate includes and how to protect your interests.