Every divorce always involves four primary issues to be resolved:
When a couple has minor children, we also need to resolve the additional issues of custody, parenting time, and child support.
However, before a court can even consider a divorce case, let alone enter a final judgment divorcing the spouses, making decisions about their children, allocating their property, ordering support, and finalizing taxes, insurance, and attorney fee issues, it must have jurisdiction over the spouses and the divorce case itself.
Subject Matter Jurisdiction and Residency: For a court to have “subject matter jurisdiction” to grant a divorce filed in Michigan, the petitioner (or plaintiff) must have been a state resident for six months directly preceding the filing. That requirement seems fairly clear, but there are lots of different and surprising ways that this rule has been interpreted to allow people not currently living in the state, or living in the state for less than 180 consecutive days, to file for divorce. Additionally, people who are not “residents” have been allowed to file in some circumstances. When filing for divorce, the petitioner must file the case in the proper venue, which is the appropriate county court to hear the case. Generally, this is the county where the petitioner or the spouse has lived for at least 10 days, but again there are lots of different ways that this rule has been interpreted, and there may be more than one proper county in which to file.
“You have to learn the rules of the game. And then you have to play better than anyone else.”
Personal Jurisdiction: A state court also must have “personal jurisdiction” over the other spouse; generally speaking, that jurisdiction is determined by each state’s “long-arm” statutes, which depend on a person’s domestic or economic relationships or contacts with a state. Jurisdiction over children in a divorce or custody case is different and may be extremely complex when two competing states or countries potentially could have custody jurisdiction. Interstate custody disputes are resolved by the Uniform Child Custody Jurisdiction and Enforcement Act, which gives preference to a state in which a child lives with a parent for at least six consecutive months before the start of a custody proceeding.
If residency or personal jurisdiction is a problem, it is best to talk to a lawyer about your specific circumstances to see if you meet the six-month residency and ten-day venue requirements and if the court has personal jurisdiction over your spouse.
Filing a Complaint and Service of Process: Divorce proceedings begin with the filing of a summons and complaint. While allegations of fault are not required to obtain a divorce, fault or conduct may be very relevant to temporary court orders, property division, and spousal support. Generally, a divorce complaint only is allowed to say that there has been a breakdown in the marriage relationship to the extent that the objects of matrimony have been destroyed and there remains no reasonable likelihood the marriage can be preserved, but in many circumstances, information about fault or conduct needs to be appropriately described to protect the person filing the complaint. While fault or conduct does not affect whether someone can obtain a divorce, it can have a significant impact on the result.
Depending on the circumstances in the case and the timing of the filing, there may be significant advantages to being the plaintiff or the defendant. The manner in which the complaint is served also can have a significant impact on how the case proceeds after that.
Answering the Complaint: The responding party – the defendant – must file an answer within 21 days of being served with the summons and complaint.
Status Quo and Temporary Orders: While the divorce is pending, it is often necessary for the parties to resolve certain temporary issues, such as occupancy of the house, custody and parenting allocations, child and spousal support, and temporary restraining orders maintaining the financial status quo and preventing hiding or destruction of assets.
In certain situations, those temporary orders can be entered by the court ex parte, which means they are issues immediately when the case is filed, even before the responding spouse has been notified of the proceeding or an opportunity to respond to the allegations. An important example of when an ex parte order might be issued by a family court is where there has been domestic violence or abuse; in those cases, a court might issue an ex parte custody order and a personal protection order (barring the other spouse from entering the home or having contact with the filing spouse or children), even before the responding spouse has been notified of the proceedings.
If the parties cannot resolve these temporary issues by agreement, the court will hold a hearing and issue orders that remain in effect while the case is pending, usually lasting until the case has been finalized.
After the summons and complaint and the answer (and sometimes a counter-complaint) have been exchanged, the lawyers will begin to gather information and evidence through a process called discovery. Generally, during discovery, the parties will gather information about the existence and values of their assets, liabilities, and income; expenses and spending; the basis for a spousal support request; and the basis of a custody request. This process can be very time-consuming and complex.
Objectives of Discovery: The goal for any divorce case is to compile four documents:
With these documents in mind, the discovery process will include fact-finding into the following issues:
In every divorce with children, three issues must be resolved: (1) legal custody, (2) physical custody, and (3) parenting time. Michigan courts will award joint legal custody unless a court makes a specific factual findings to the contrary. Physical custody is determined according to the “Best Interests” of the children, and parenting time is presumptively granted in an amount that will foster a strong relationship with both parents. Parenting time typically is scheduled differently for the school year, school vacations and holidays, and summers. The specific allocation and schedule can vary widely depending on the facts and circumstances of each individual case.
One of the most important issues when calculating support is determining each spouse’s net cash flow available for support. A parent’s “net income” used to calculate support is not be the same as that person’s take home pay, net taxable income, or similar terms that describe income for other purposes. That calculation sometimes can be difficult and complex, particularly when a spouse owns his or her own business. Child support guidelines set forth how child support is calculated. Parents must provide support to their children until they turn 18 or graduate from high school.
Michigan is an equitable distribution state, meaning the law requires that marital property be divided in a fair and equitable (though not necessarily equal) fashion and that the separate property of a spouse sometimes can be “invaded” by the other spouse. The classification and valuation marital, nonmarital, and mixed assets are often the subject of dispute during a divorce, particularly if there is a professional practice or business involved. Expert financial witnesses and complicated tracing efforts may be needed to fully understand whether property is marital or separate, the full extent of a person’s income, and the value of business interests and assets.
Net cash flow available for support is just as important to a spousal support determination as it is to a child support determination. However, unlike child support, there are no spousal support guidelines. Instead, Michigan courts must consider several subjective factors to balance the incomes and needs of parties in way that does not impoverish either party. A court is required to consider not only the net disposable income of the spouse paying support but also the needs of the recipient, so discovery on this issue often involves a careful expense analysis of pre- and post-divorce lifestyles and needs.
Necessary Information: It is the attorney’s job to gather all of the relevant net worth, income, and expense information during the pendency of any case. It often is extremely helpful to have a client bring in copies of recent tax returns, pay stubs, bank statements, and other documents bearing numbers that may be lying around the home or office (as well as incriminating love notes, e-mails, text messages, Facebook postings, or videotape), but most clients do not bring anything at all to an initial meeting with an attorney. When clients do bring (or at least have) such information, it is invaluable, but more often than not, this type of information is not available to the divorcing spouse.
What You Know: What a client is able to tell an attorney during an initial interview — even if the information is rough or incomplete — is of critical importance and will guide discovery and investigation throughout the case. A divorce attorney needs to collect that initial information in a careful and organized manner so that the attorney easily can assess what is available and what is missing or unknown.
In an initial interview with a prospective client, an attorney will ask financially-oriented questions is to gain a rudimentary and preliminary understanding of the client’s net worth, income, and expenses/lifestyle, so that the attorney can assess how a court may handle the issues of property division, child support, and spousal support. From that initial overview, the attorney then can begin to use the available discovery find missing information and complete the financial picture. The initial meeting also will enable the attorney to make an initial assessment about separate property claims arising from premarital assets, assets received as gifts, and inherited assets. These questions may focus on each spouse’s contributions to the acquisition, maintenance, and improvement of various assets, title to various assets, and the possible commingling of various assets. If there is a prenuptial agreement or a postnuptial agreement, the attorney will need to ask questions designed to assess the validity and potential enforceability of the agreement. (These questions usually focus on the financial disclosure made incident to the execution of the document, when the document was signed in relation to the date of the marriage, the circumstances surrounding the execution of the document, changes in circumstances that may have occurred since the execution of the document, among numerous other related questions.)
Discovery Plan and Follow Up: From this rough analysis, the attorney then will plan to gather information to bolster or thwart claims related to premarital, gifted, and inherited property. An attorney may do this informally and privately — by using internet resources, private investigators, and interviews with witnesses, for example — or formally through discovery powers permitted under the Rules of Civil Procedure. These court rules allow an attorney to issue document subpoenas to third parties, take depositions, require written questions to be answered under oath, and enter on to property (with advance notice) to inspect buildings, equipment, and assets. In many cases, an initial round of discovery is followed up with a second (and sometimes third or fourth) round of discovery, until all of the questions raised by the discovery investigation have been answered.
Ultimately, specific information will be gathered from a review of personal and business income tax returns and financial statements, real estate appraisals, mortgages, bank statements, personal and business check registers, brokerage accounts, retirement accounts/benefits, and credit card statements, all of which the attorney will obtain — either from the client, by formal means under the court rules, or by informal private investigations — during the divorce discovery process. Sometimes, attorneys will employ accountants, psychologists, appraisers, forensic experts, and business valuation experts to value business interests and determine disposable income and net cash flow.
Discovery routinely takes anywhere from three to six months. After discovery has been completed, attorneys attempt to negotiate a resolution of the parties’ issues using the information gathered during the discovery phase. Sometimes, cases are settled through confidential mediation sessions with a private mediator; other times, they are settled through direct negotiation between the parties and their attorneys. Approximately 97% of all divorce cases eventually are settled, although sometimes in difficult cases that process may take until the moment of trial for the parties ultimately to agree to a resolution.
If the case is settled, the attorneys draft confidential settlement agreement, which is a private contract setting forth the terms on which the spouses agree to end their marriage. Both spouses sign the agreement, but often, it is not filed with the court. Instead, a Judgment of Divorce also is prepared, referencing the private contract but not disclosing many of its terms to protect the personal and private financial information of the parties as much as possible. When the judge approves of the Judgment of Divorce, the court will sign it and file it in the court records, and at that moment, the parties will be divorced.
How a settlement agreement is drafted is critically important, because when an asset is titled in the other spouse’s name, ensuring that the asset is transferred properly, without creating unintended tax consequences, requires careful thought. Equally important is making sure that all of the necessary steps in an asset (or debt) transfer are required to be taken, with built-in consequences if they are not. It is not helpful to have an agreement that simply says an opposing spouse must do something, without a built-in remedy if that spouse later decides not to cooperate.
Achieving a settlement requires careful planning and development of the right leverage to make sure that the opposing spouse wants to settle, rather than going to trial.
If the case cannot be settled, the parties will have a contested trial in which the judge decides for the parties all of the issues that must be resolved for them to be divorced.
During a contested trial, the attorneys for each spouse present their facts and interpretations of the law to the court through trial briefs, witness testimony, and evidence. The judge then decides the issues between the spouses. When a party is dissatisfied with the result of a trial, that party has the right to appeal the decision of the trial court. Sometimes, appeals can take more than two years.
Often, parties find trials to be the least satisfying method of dispute resolution, both financially and emotionally. A trial can be very expensive, especially in complex cases that require the use of business valuation experts, accountants, psychologists, and appraisers. Often, judges do not have the time or expertise to fully understand the detailed factual circumstances of the parties or the financial opinions of the experts. Additionally, there is the emotional toll of a trial. For these reasons, most couples choose to resolve issues through settlement because they best understand their own circumstances and needs and therefore are in the best position to resolve their own differences.