Going through a divorce in Minnesota can be a challenging time, and one of the biggest issues couples face is deciding what happens to the marital home. For many, the house represents both their most significant asset and a place full of memories.
Deciding who will keep the house, how to split any equity, or if selling is the best option can become a major focus during divorce negotiations.
Martine Law has extensive experience assisting Minnesota clients in navigating the legal, financial, and practical aspects of property division, especially when it comes to valuable assets like your home.
In this blog, our team of Minnesota divorce and family law lawyers provides an overview of how Minnesota courts approach these issues and the options you have for handling your home in a divorce.
Is A House Considered Separate or Community Property in Minnesota?
Minnesota, unlike community property states like California, follows an equitable distribution approach. This means that marital property, including the home, doesn’t default to a 50/50 split. Instead, Minnesota courts consider what’s “fair” based on several factors unique to each marriage.
This gives the court much more discretion in determining a fair division based on the specific circumstances of the marriage. The house and its value do not have to be divided equally.
So, in Minnesota, the marital home is not considered separate property that automatically belongs to one spouse. But it also does not default to a 50/50 split like community property states.
How the equity and/or proceeds from the home sale will be divided depends on many factors we’ll explore throughout this article, but an experienced Minnesota family law attorney can assess whether your home is likely to be considered marital or non-marital property and guide you through any evidence that supports your case.
What Factors Influence Who Gets the House in a Minnesota Divorce?
Minnesota courts examine several factors to determine who, if anyone, keeps the marital home, including:
- Length of the marriage
- Contributions of each spouse, both financial and personal (such as renovations or maintenance)
- Age and health of each spouse
- Income and financial stability of each spouse
- Custody of minor children
- Non-marital claims to the home by one spouse (such as inheritance or pre-marriage ownership)
Based on these criteria and the overall equities of the situation, the judge will determine if:
- One spouse keeps the house
- The house is sold, and proceeds divided
- The house continues to be co-owned after the divorce
There is no hard and fast rule under Minnesota law that the house automatically goes to the parent with primary custody of minor children, for example. But having minor children and being the primary caretaker are factors a court will consider favorably when deciding if you get to keep living in the home.
How is Home Equity Divided in a Minnesota Divorce?
Figuring out how to divide the equity in your home can be one of the trickiest parts of finalizing a divorce settlement. Equity essentially represents how much of the house you actually own.
It’s calculated by taking the current market value of the home and subtracting any mortgage debt still owed: Home Value – Mortgage Debt = Equity
Let’s say the house is worth $300,000 on the market. You and your spouse still owe $150,000 on the mortgage. So the total equity would be: $300,000 – $150,000 = $150,000
Dividing something so valuable equitably can become highly contentious. Under Minnesota law, equity in the marital residence is considered joint marital property, just like your other assets. So, it’s subject to the same equitable distribution standard during divorce proceedings.
Some options for splitting the equity include:
- One spouse keeps the house and buys out the other spouse’s share of equity. For example, you keep the house and pay your ex $75,000 for half of the $150,000 equity. This may require you to refinance the mortgage or take out a home equity loan.
- Sell the house and split net proceeds. If selling the home, you would split any profits from the sale 50/50 after paying off the mortgage balance and any realtor/closing fees.
- Continue co-owning after divorce. This is rare and generally inadvisable, but Minnesota does allow ex-spouses to continue jointly owning a home together. You would still split equity and profits down the road when eventually selling.
- Offset value. One spouse keeps the house, but the other spouse gets to keep a larger share of retirement accounts or other assets to offset the value of the home equity.
As you can see, dividing equity in a home is rarely straightforward. Hiring an experienced Minnesota family law attorney to help negotiate the options to protect your interests is highly recommended.
What if Only One Spouse’s Name is on the House Title or Mortgage?
In some cases, only one spouse is on the legal title for the home or listed as the borrower on the mortgage. This happens frequently when one person purchases the home before the marriage.
However, sometimes, only one spouse’s name ends up on all the paperwork, even when the home was acquired jointly during the marriage. This often occurs for financial reasons, like only one spouse being qualified for the mortgage at the time.
The key thing to understand is that, in Minnesota, it does not matter whose name is or is not on the house title and/or mortgage. If the home was obtained during the marriage, it is still considered a joint marital asset under state law.
Our team of Minnesota divorce property division lawyers at Martine Law can help clarify whether the home is a joint or individual asset based on the specific details of your situation.
Should I Sell the House Before Divorce?
Some couples consider selling their shared home either right before or amid divorce proceedings.
There are a few reasons why you might want to sell the house sooner rather than later:
- Avoid arguments over who keeps it. Selling the house and splitting profits removes a huge point of contention. You don’t have to fight over equity percentages or who deserves to stay.
- Split proceeds sooner. For some couples, getting their share of home equity can provide needed funds to start their new life after divorce. If only one keeps the house, the other spouse has to wait an indefinite period to get their share.
- Reduce expenses. Owning a house means ongoing expenses like the mortgage, taxes, insurance, utilities, and maintenance. For the spouse moving out, eliminating these costs can be a relief.
- Emotional reasons. Some spouses want a fresh start in a new home without the memories or attachments to the marital residence.
However, selling before the divorce can bring risks, especially if market conditions aren’t favorable.
Working with a divorce attorney or a trusted advisor can help you decide whether selling now or waiting until the divorce is complete is best for your financial interests.
I Want to Keep the House—What Are My Options?
If you want to remain in the marital home, you have options. Here are some paths to explore that may allow you to keep the house in your divorce:
- Buy out spouse’s share of equity. You can pay your spouse their equity in a lump sum. Then, you become the full owner.
- Take over mortgage payments. If you can qualify to refinance the home into your name only, this removes your ex from the mortgage liability while allowing you to stay.
- Offset with other assets. Your spouse gets a greater share of other assets like retirement funds to offset the home value you keep.
- Pay your ex rent. Sometimes, the ex-spouse agrees to let you stay in return for monthly rent payments over a defined period.
- Shared title after divorce. As mentioned, Minnesota allows divorced spouses to co-own. But this is extremely rare and risky.
Contact the Minnesota Divorce Attorneys at Martine Law
Dividing real property in divorce involves complex calculations and a clear understanding of Minnesota law. Trying to handle these decisions without legal support can be overwhelming.
At Martine Law, we help our clients protect their interests, whether through negotiation, mediation, or courtroom representation.
To learn more about your options for the marital home and how our firm can support you in reaching a fair resolution, schedule a consultation with Martine Law. We’re here to provide the guidance you need every step of the way.