Laurie Schmitt Family Law

W. Michigan family law specializing in Collaborative Divorce

616.608.4634

Archives for September 2020

Marital Property versus Separate Property

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When is property considered separate property, and therefore not divisible in a divorce?

Courts make the distinction between marital property and separate property.  Marital property is simply property acquired during the marriage.  However, the Michigan statutes fail to define separate property.  Nevertheless, courts typically adopt the rule that separate property is property that is not divisible in a divorce because it was owned prior to marriage or acquired during marriage through a gift or inheritance.  If it was owned by a party prior to marriage, it normally will be awarded to that party.

But, there are times when separate property can be divided in a divorce.  Michigan case law supports the proposition that property claimed by one spouse to be separate property may be divided if the other spouse meets on of two statutory tests:

  • Contribution Test: that the claimant contributed to the “acquisition, improvement, or accumulation of the property” MCL 522.401.
  • Need Test: that the award to the claimant out of marital assets is “insufficient for the suitable support and maintenance” of the claimant and any children in their care.  MCL 552.23.
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What happens if you received an inheritance during the marriage?  If you receive an inheritance while you are married, and want that inheritance to remain separate property, you must never co-mingle it.  What does this mean?  It means that once you have co-mingled it with joint property, you cannot separate it.  It’s like making a cake.  Once the ingredients have been mixed together, you cannot separate them out, as they are indistinguishable.  Hence, if you want to protect an inheritance, you need to maintain it as separate funds.  Once the funds have been co-mingled, it will likely be considered marital property.

If you find yourself in the midst of a divorce, and have received an inheritance, or owned substantial property prior to your marriage, you need to know how to protect your property during your divorce.  As this is a complex subject, you should contact a family law attorney who can provide you with a legal opinion based off your specific facts.

Enforcing Child Support / Friend of the Court

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The Friend of the Court is responsible for enforcing child support orders.  Many enforcement methods (described below) can be used if a parent does not follow terms of the order.

Income Withholding

An income withholding order can be used to collect both current and past-due support (arrearages).  All new and modified child support orders are required to include income withholding, unless both parents and the court agree on other payment methods.

Under income withholding, child support and medical support payments are deducted from the non-custodial parent’s paycheck.  The employer sends the support payments directly to the Michigan State Disbursement Unit (MiSDU).  Federal and state laws require employers to honor income withholding orders.

A parent’s income from other sources, such as unemployment benefits, Social Security benefits, independent contracting, workers’ compensation claims, and insurance claims are also subject to income withholding.

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Tax Refund Offset

If the amount of past-due support (arrearages) reaches a certain level (threshold), both federal and state tax refunds can be intercepted to pay support.

The past-due threshold for state tax refund offset is $150.  The federal past-due threshold is $150 for cases that receive cash assistance; the non-cash assistance threshold is $500.

For both state and federal tax refund offset, the person who owes the support receives a notice explaining his or her right to object to the tax refund offset and reasons to object.  In a joint tax return, a spouse may make a claim to retain his or her portion of the refund.

Show Cause/Bench Warrant

A person who has not paid child support or has not provided medical support can be ordered to appear before the court to explain to the court why he/she should not be held in contempt.  This is called a show cause hearing.

If the person ordered to appear at a show cause hearing does not show up, the court may order a variety of enforcement actions, including issuing a bench warrant for the arrest of the person who did not show up for the show cause hearing.

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Lien/Levy

The Friend of the Court or the Office of Child Support can initiate a lien/levy against real or personal property, financial assets, or insurance claims for collection of child support.

License Suspension

Driver’s licenses, recreational or sporting licenses (hunting, fishing, etc.), and professional licenses can be denied, suspended or revoked if a parent is behind more than two months in payments.

Credit Reporting

If a parent is behind more than two months in payments, he or she is automatically reported to a consumer credit reporting agency.

Passport Denial

A parent’s passport may be denied or revoked when he or she reaches the past-due support threshold of $2,500.

National Medical Support Notice

Enforcement of medical support is done through the National Medical Support Notice for employer-provided insurance or through any of the other enforcement methods listed if cash payments are required.

Pension Account(s)

A Qualified Domestic Relations Order (QDRO) is a support order against a private pension account.  An Eligible Domestic Relations Order (EDRO) is a support order against a state or federal government pension plan.  A QDRO or EDRO can be issued for current support or past-due support (arrearages).

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Surcharge

A judge may order a surcharge be added to a case that has arrearages.  If a surcharge is ordered, it will be added to the case every January 1st and July 1st and become a part of the total amount of support owed.  The surcharge is a variable rate tied to five-year United States Treasury Notes, plus 1%.

Criminal/Felony Charges

The Friend of the Court can refer the case to the county prosecutor, who may charge the person who owes support with the crime of felony non-support.  In some counties, the case may be referred to the Attorney General for criminal prosecution of felony non-support.  Felony non-support charges are generally issued after other child support collection methods have not been successful.  Custodial parents may also ask the county prosecutor or Attorney General for felony non-support prosecution.

For assistance with your child support issue, contact me, Laurie Schmitt, at Schmitt Law, PLLC.  I am an Attorney, Mediator, and Collaborative Divorce lawyer.