Divorce can be an emotionally trying time, especially when you have to make major decisions about dividing your assets and property. If you’re considering divorce in Minnesota, you probably have plenty of questions about how your assets will be divided and what the divorce laws are regarding property division in the state.
Why Dividing Property and Debt Matters
Dividing property and assets is an essential part of the divorce process. It determines who gets what and sets the financial starting point for your new life after divorce. Depending on what state you live in, you and your spouse may split property according to community property or equitable distribution laws.
It’s important to understand what accounts for marital property vs separate property. Marital property generally includes assets and debts acquired during the marriage. Separate property is anything owned by one spouse before the marriage or received as a gift or inheritance during the marriage.
How property is divided can impact your financial security and lifestyle after the divorce. That’s why it’s critical to evaluate all marital property and debt, determine accurate values, and aim for the fairest division possible.
What is Community Property Versus Equitable Distribution?
In community property states like California, spouses are considered equal owners of all property and assets acquired during the marriage, and a 50/50 division is typical.
Equitable distribution states like Minnesota, on the other hand, require a fair division of marital property determined by a judge. The court has broad discretion to divide assets equitably (or fairly), which may not be an exactly equal division.
Factors a Minnesota court may consider when distributing marital property include:
- The length of the marriage
- Each spouse’s financial contributions
- Non-financial contributions as a homemaker
- Custody arrangements for minor children
- Each spouse’s age, health, income, and future earning potential
Courts strive to avoid putting one spouse at an unfair economic disadvantage in awarding property.
Marital Property vs. Separate Property
Only marital property is divided in a Minnesota divorce. Separate property acquired before the marriage or received as an inheritance or gift during the marriage generally stays with the owning spouse. However, gifts between spouses made during the marriage are typically considered marital property.
Property bought during the marriage is presumed to be marital property, even if title is only in one spouse’s name. Appreciation in value of separate, nonmarital assets may be considered marital property if the increase occurred during the marriage.
Options for Dividing Property
You and your spouse have options when it comes to dividing your assets and property in a divorce:
- Reach an agreement: Spouses can mutually agree how to split their property, assets, and debts through mediation or negotiation. You can detail this voluntary settlement in a marital settlement agreement filed with the court.
- Litigate: If you can’t agree how to divide marital property, the court will decide for you after hearing arguments from you and your spouse. The judge has broad discretion in equitably dividing your property.
- Hybrid approach: Some couples agree on certain assets but litigate the division of others they can’t compromise on, like the house or a business.
- Do-it-yourself divorce: If you have minimal property and assets, you may be able to reach an agreement yourselves without litigation using DIY divorce papers. However, this is only advisable in simple, uncontested cases.
No matter the approach, it’s wise to consult an experienced Minnesota divorce attorney to understand your rights and options for a fair property division.
How Might the Court Divide Specific Assets?
When it comes time to divide property in your divorce, here is how the court may handle some common marital assets:
- House: The marital home is often the biggest asset. The judge can order the house sold and proceeds split, allow one spouse to buy out the other’s share, or award exclusive use to the spouse with child custody.
- Retirement accounts: Accounts like 401(k)s and pensions are divided by determining the value accumulated during marriage. This often requires additional legal steps like QDROs.
- Personal property: Furniture, jewelry, appliances, etc. Spouses may be ordered to sell and split proceeds, compromise on an assigned value, or be allowed to keep certain items.
- Business interests: Interests in businesses started during the marriage get divided. The court may order a business sold or award a non-owning spouse a cash payout representing their share.
- Debts: Marital debt gets equitably divided, usually assigning each spouse the debts in their own name. But the court can divide joint debts however it determines is fair.
Consult a Minnesota divorce lawyer to understand how debts and assets might be divided in your unique situation.
What About Gifts and Inheritances Received During Marriage?
Gifts and inheritances received during the marriage are generally considered separate property in Minnesota. However, the spouse claiming them must prove the separate nature to the court through a process called tracing.
For example, if you receive an inheritance and use it to remodel the marital home, you would need to provide records showing the inheritance money going toward the remodel costs. This traces the gift to the marital asset, allowing the court to recognize your separate interest.
Careful records are required anytime separate funds get mixed with marital assets. Talk to a divorce attorney in MN to understand tracing and how to properly claim separate property interests.
When Does the Court Value Assets and Debts?
In Minnesota, marital property is typically valued as of the initially scheduled prehearing settlement conference date. This conference is a mandatory meeting where spouses make a final attempt to settle before going to trial.
However, couples can mutually agree to an alternative valuation date. For instance, if the major decline in a stock portfolio occurs after the settlement conference date, you may want to value assets at the time of separation instead. Discuss valuation timing with your family law attorney.
How Long Does Property Division Take?
If you and your spouse can reach an agreement on property division, this part of the divorce may only take a few weeks to a couple of months. Property division through contested divorce litigation often takes 6 months or longer. Simple do-it-yourself divorce cases with minimal assets may be resolved in just 1-2 months.
The time required depends on each spouse’s cooperation, how many assets need to be divided, and whether disputes arise requiring court intervention. A lawyer can help expedite the process through efficient negotiation.
How Can I Prepare for a Fair Property Settlement?
To achieve a favorable property and debt settlement in your Minnesota divorce:
- Talk to a lawyer to understand marital vs. separate classifications and how assets might be divided.
- Gather documentation like bank statements, titles, tax returns, and appraisals to establish asset values.
- Try to settle before court whenever possible so you control the outcome.
- Disclose all assets upfront – hiding assets will only prolong the process and could lead to an unfair outcome.
- Compromise when reasonable to avoid excessive legal fees and keep the process amicable.
With preparation and legal guidance, you can achieve a property settlement that allows both spouses to move forward after divorce. The attorneys at Martine Law have extensive experience with property division in Minnesota divorces. Contact us today to discuss your situation and options.
Let a Seasoned Lawyer Handle Your MN Property Division
Dividing up years of accumulated assets and property is often emotionally and financially draining for divorcing spouses. An experienced divorce attorney will handle this complex legal process for you from start to finish while protecting your rights and financial interests every step of the way.
Don’t navigate property division in your divorce alone – contact Martine Law today to schedule a consultation. With personalized guidance from our attorneys, you can achieve the most equitable settlement possible as you move on to your new life after divorce.
