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Key facts about asset purchases during divorce

A divorce can be difficult for anyone but can be especially trying for those who are not on good terms. In such cases, the actions of either party can have a strong effect.

Particularly in regards to shared assets, it is important to understand the impact of certain actions. In particular, parties should know a few key things about large asset purchases during the divorce process.

The law

Different states handle the separation of assets in accordance with their laws. In Michigan, the divorce laws indicate that it utilizes equitable distribution. In other words, marital property belongs to both parties equally. When the courts examine the divorce parties' property, they do so with the intent to distribute the assets fairly among the two equal owners.

Asset division

Equitable division in regards to dividing marital assets does not always result in an equal split, particularly when parties make large asset purchases during the divorce process. If the other party did not agree to the purchase, the court may deduct the purchase price from the asset share that the purchaser receives. While this is fair, it may still cause some concern for the other party. Depending upon the type of asset, it may have a depreciating value. In such cases, the purchase may result in a greater loss than just the initial cost.

Stop options

For those who desire to prevent large asset purchases during the divorce, a financial restraining order may be helpful. As the name indicates, the order restricts parties from making significant financial changes to the marital assets while the parties go through the divorce process. In the state of Michigan, the restraining order may also apply to any shared businesses.

While drastic measures are available when necessary, it is usually advisable for parties to try to resolve issues among themselves, even in regards to divorce. However, if that is not an option, understanding the law can aid in determining the best course of action.

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