Michigan Family Law Journal : TAX TRENDS AND DEVELOPMENTS Feature
by Joseph W. Cunningham, JD, CPA
- At the time of the divorce trial in September 2011, H’s Ford 401(k) account balance was $315,862.
- When the parties married in September 1999, the balance was $208,942.
- Contributions were made to the account during the marriage.
- The trial court determined that the entire Ford 401(k) was marital and awarded W $157,931.
- The Court’s rationale was that the pre-marital funds in the account were commingled with contributions made during marriage and, hence, were marital.
- H appealed, claiming the entire 401(k) account was separate property because (1) most of the account was funded before marriage and (2) he was the sole contributor during marriage.
- Alternatively, he claimed that the $208,942 premarital balance was his separate property.
Court of Appeals Opinion
- The COA rejected H’s claim that the entire account was separate property because, pursuant to MCL 552.18(1), retirement benefits accrued during marriage “shall be considered part of the marital estate subject to award by the court.”
- However, the Court agreed with H’s alternative claim that the pre-marital balance of $208,942 was his separate property.
- The Court cited McNamara v Horner, 249 Mich App 117 (2002) and Reeves v Reeves, 226 Mich App 490 (1997) in support of its decision.
Comments on the Case
Complete Michigan Family Law Journal available at: Michigan Bar website – Family Law Section