Separate asset or marital

[aroundtheworld]

State of Michigan
Married for 20 years.
My husband acquired a rental property before we got married. The property is owned by his LLC. I have never been a member of the LLC. The income from the LLC (rent from rental property) has always paid for our family health premium and expenses, all rental income passes through our joint account and then gets transferred to the LLC account, my husband took 20k from our marital home equity line of credit and loaned to the LLC to renovate the rental home and never paid it back, it's been 4 years. A few months ago he just took $3000 from out joint account to make an owner contribution to the LLC account. I rent, manage and do all the bookkeeping for that LLC and never officially get paid or taken any money directly from the LLC.
He thinks it is a separate asset because I don't contribute much to the marriage financially.
I stayed home to raise the kids and other times when I worked I didn't contribute towards paying the mortgage although I did spend all my salary building us a nice kitchen. A few years ago he asked that I quit my good job in order to stay home to cook, clean, run the business etc. which I did.
How many of you think this is a separate asset?

 

[Zigner]

For reference: https://forum.freeadvice.com/threads/divorce-and-owning-properties-together.660997/

This sounds like it was likely comingled. You should speak to an attorney.

 

[zddoodah]

My husband acquired a rental property before we got married. The property is owned by his LLC.

Just so you know, "my husband acquired a rental property" is inconsistent with "[t]he property is owned by his LLC."

all rental income passes through our joint account and then gets transferred to the LLC account

Why?

He thinks it is a separate asset because I don't contribute much to the marriage financially.

What is "it"? The property that is owned by the LLC? Or the ownership of the LLC? Also, separate from what?

How many of you think this is a separate asset?

If you're talking about the rental property, and if you're using "separate asset" to mean non-marital property ("separate" in this context is a term used in community property states, which Michigan isn't), then the answer is that it's not. It's neither marital property nor non-marital property. It's owned by an LLC. Whether the ownership of the LLC is a marital or non-marital asset isn't apparent from your post. Also, it appears that you and your husband have been disregarding the LLC structure in how you've handled things. That could, in theory, have adverse consequences.

Why do you ask?

 

[quincy]

State of Michigan
Married for 20 years.
My husband acquired a rental property before we got married. The property is owned by his LLC. I have never been a member of the LLC. The income from the LLC (rent from rental property) has always paid for our family health premium and expenses, all rental income passes through our joint account and then gets transferred to the LLC account, my husband took 20k from our marital home equity line of credit and loaned to the LLC to renovate the rental home and never paid it back, it's been 4 years. A few months ago he just took $3000 from out joint account to make an owner contribution to the LLC account. I rent, manage and do all the bookkeeping for that LLC and never officially get paid or taken any money directly from the LLC.
He thinks it is a separate asset because I don't contribute much to the marriage financially.
I stayed home to raise the kids and other times when I worked I didn't contribute towards paying the mortgage although I did spend all my salary building us a nice kitchen. A few years ago he asked that I quit my good job in order to stay home to cook, clean, run the business etc. which I did.
How many of you think this is a separate asset?

It appears your husband made several errors when operating the LLC if he intended to claim the rental property and rental income as non-marital assets.

You should have a divorce attorney.

 

[xylene]

FYI it is pretty clear your husband is trying to bamboozle you into believing you are entitled to far less than you should get. Whatever the specifics of this rental property.. he's got it backwards saying you didn't contribute.

Do Not fall for his lies.

You need a lawyer. You are very likely entitled to spousal support AND a proper disposition of martial assets.

 

[aroundtheworld]

Just so you know, "my husband acquired a rental property" is inconsistent with "[t]he property is owned by his LLC."

He formed his LLC prior to meeting me and that LLC bought a rental property, again prior to meeting me.


Why? Because all rent is paid via Zelle and zelle is attached to a joint personal account.



What is "it"? The property that is owned by the LLC? Or the ownership of the LLC? Also, separate from what?

The LLC owns the rental property. I think my questions should have been, Is the LLC a marital or separate asset?


If you're talking about the rental property, and if you're using "separate asset" to mean non-marital property ("separate" in this context is a term used in community property states, which Michigan isn't), then the answer is that it's not. It's neither marital property nor non-marital property. It's owned by an LLC. Whether the ownership of the LLC is a marital or non-marital asset isn't apparent from your post. Also, it appears that you and your husband have been disregarding the LLC structure in how you've handled things. That could, in theory, have adverse consequences.

Why do you ask?

 

[zddoodah]

@aroundtheworld - why did you quote my prior response without adding any new content?

 

[Zigner]

@aroundtheworld - why did you quote my prior response without adding any new content?

Expand the quote - there is added information. I agree that it's difficult to read.

 

[adjusterjack]

State of Michigan
Married for 20 years.

Are you headed for divorce.

How many of you think this is a separate asset?

If your name is not on the deed and your not a member of the LLC then yes, it is a separate asset.

But now you have to understand the difference between ownership and marital interest. It seems clear that you don't own the property but it's also pretty clear that you have a marital interest in the equity that has built up in the property for the past 20+ years.

How much would need to be determined but, in the event of a divorce you are likely to be entitled to a share of the equity.

 

[Zigner]

Just so you know, "my husband acquired a rental property" is inconsistent with "[t]he property is owned by his LLC."

He formed his LLC prior to meeting me and that LLC bought a rental property, again prior to meeting me.


Why? Because all rent is paid via Zelle and zelle is attached to a joint personal account.


What is "it"? The property that is owned by the LLC? Or the ownership of the LLC? Also, separate from what?

The LLC owns the rental property. I think my questions should have been, Is the LLC a marital or separate asset?

 

[aroundtheworld]

Are you headed for divorce.



If your name is not on the deed and your not a member of the LLC then yes, it is a separate asset.

But now you have to understand the difference between ownership and marital interest. It seems clear that you don't own the property but it's also pretty clear that you have a marital interest in the equity that has built up in the property for the past 20+ years.

How much would need to be determined but, in the event of a divorce you are likely to be entitled to a share of the equity.

That makes sense to me.
Yes, we are getting a divorce. I had like it to be very friendly. We have 2 young kids, STBX wants 50/50 custody on paper but in reality he wants them only on Friday and Saturday nights only. I would love to raise the kids 5 days each week but I wonder how much child support I will get if documents state I get them 50% of the time only.

 

[adjusterjack]

I would love to raise the kids 5 days each week but I wonder how much child support I will get if documents state I get them 50% of the time only.

Child support has more to do with income disparity.

Google Michigan child support calculator. There are many. You'll be able to get a rough idea of what you are entitled to.

 

[zddoodah]

Expand the quote - there is added information. I agree that it's difficult to read.

Ugh....

all rent is paid via Zelle and zelle is attached to a joint personal account.

This doesn't answer the question I asked. Regardless of the mechanism, why isn't the money paid directly to the LLC that owns the property?

I think my questions should have been, Is the LLC a marital or separate asset?

Nothing you posted indicates it's marital property.

 

[quincy]

... Nothing you posted indicates it's marital property.

Nothing that aroundtheworld posted says that it isn’t either.

aroundtheworld, because of the length of your marriage and the fact that you have children still living at home, a “friendly” divorce, while something you can strive for, should not be the priority. A divorce that protects your best interests and the best interests of your children in the long term should be your priority. Your husband could very well have interests adverse to your own.

There are excellent experienced divorce/family law attorneys throughout Michigan. You should interview several before settling on one. But you definitely should have an attorney. Here is a link to the State Bar of Michigan’s Legal Resource and Referral Center to help you locate attorneys in your area:

https://lrs.michbar.org

 

[not2cleverRed]

Ugh....

Why? Because all rent is paid via Zelle and zelle is attached to a joint personal account.

This doesn't answer the question I asked. Regardless of the mechanism, why isn't the money paid directly to the LLC that owns the property?

Just reiterating this: why is the joint personal account being used? Why doesn't the LLC have separate everything?

X and Q are right: OP is at risk of being fleeced. And the children are the ones that suffer if she doesn't use her spine - none of us are saying get nasty. We are saying to be assertive; don't be a doormat and call it being amicable.