Minnesota Divorce: Dividing Property

Find out how courts in Minnesota divide marital property and assets during a divorce.

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Laws governing division of marital property in divorce vary from state to state. Minnesota law requires a division that is equitable, meaning that it is fair but does not necessarily have to be equal. Some couples are able to agree on how to divide everything on their own, while others seek the help of attorneys or a mediator to negotiate a settlement. Couples who don’t manage to resolve property issues outside of court will end up going to court to ask for a decision from a judge. A Minnesota judge will consider all relevant factors in deciding what kind of property division is fair, including the following:

  • the length of the marriage,
  • any prior marriages,
  • each spouse’s age, health, and station in life,
  • each spouse’s occupation, amount and sources of income, vocational skills, and employability,
  • each spouse’s, estate, liabilities, and needs,
  • each spouse’s opportunity to acquire capital assets and income in the future, and
  • each spouse’s contributions to the acquisition, preservation, and increase or decrease in value of marital property, including contributions as a homemaker. 

A Minnesota court will conclusively presume that each spouse has made a substantial contribution to acquiring income and property while living together as husband and wife. A judge will assess the nature and amount of such contributions on a case by case basis.

Marital Property and Separate Property

The first step in the division process is deciding whether property is marital or separate. If the couple entered into a prenuptial agreement before getting married, they may have already specified which property is separate and which is marital. Absent such an agreement, marital property includes most assets and debts a couple acquires during marriage. Property is separate if a spouse owned it before marriage or acquired it during marriage by inheritance or gift—not including gifts from the other spouse.

Separate property also includes items purchased with or exchanged for other separate property. An increase in value of separate property will also be separate, unless the increase results from the efforts of a spouse or a contribution of marital property. Although separate property is not ordinarily part of a division in divorce, Minnesota law allows a judge to include it, if necessary, to avoid an unfair hardship to either spouse.

Spouses can change separate property into marital property by changing title from individual to joint ownership, in which case a court would presume that the spouse intended to make a gift of the property to the marriage. Marital and separate property can also be mixed together—sometimes called “commingling.” Some couples combine their separate assets intentionally; others do so without thinking about it. A premarital bank account belonging to one spouse can become marital property if the other spouse makes deposits to it; a house owned by one spouse alone can become marital property if both spouses pay the mortgage and other expenses.

If the spouses aren’t able to decide what belongs to whom, the judge will have to decide whether any or all of the commingled property was a gift to the marriage or whether the original owner should be reimbursed in whole or in part. These situations can be very complicated, and if you're dealing with commingling and trying to account for funds, you may need some professional help.

 

Assessing Value

After determining which property is marital property, the couple, or the court, will assign a monetary value to each item. Couples who need help determining values can hire professional appraisers. Some financial assets, such as retirement accounts, can be very difficult to evaluate and may require the assistance of a financial professional, such as a C.P.A. or an actuary.

Dividing the Property

Spouses can divide assets by assigning certain items to each spouse, possibly with an equalizing payment if one spouse gets substantially more than the other, or by selling property and dividing the proceeds. They can also agree to continue to own property together. Most people don't choose this because they don't want to remain financially entangled with their spouse, but some couples agree to keep the family home until children are out of school. Others may keep investment property in hopes it will increase in value.

The couple must also assign all debt accrued during the marriage, including mortgages, car loans and credit card debts, to one of the spouses.

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