How Do Minnesota Courts Decide What’s Fair and Equitable in Divorce?

Getting divorced in Minnesota? If so, you probably have questions about how your marital property will be divided. Minnesota is an “equitable distribution” state when it comes to divorce.

This means that marital property does not have to be divided equally or 50/50 between spouses. Instead, the court will aim to divide marital assets and debts in an equitable or fair manner.

What is Equitable Distribution?

Equitable distribution is a method used by courts in many states to determine how to divide property in divorce cases. The main goal of equitable distribution is achieving a fair division of marital assets and debts between divorcing spouses.

Unlike community property states, equitable distribution states do not require that property be divided equally.
The court has the discretion to decide what an equitable division is after considering various factors laid out in state divorce laws. So, equitable distribution doesn’t necessarily mean an equal distribution of assets and debts. The distribution is intended to be fair, but that doesn’t mean 50/50.

What is Considered Marital Property?

Before a court can equitably divide property, it first must classify which assets and debts are considered marital property subject to equitable distribution.

Marital property typically encompasses all property acquired by either spouse during the course of the marriage. This can include:

• Income and earnings
• Houses and real estate
• Vehicles and boats
• Bank accounts and investment accounts
• Retirement accounts like 401(k)s and IRAs
• Businesses owned by either spouse
• Personal property like jewelry, furniture, art
• Intellectual property like patents and copyrights
• Stock options and restricted stock units
• Debts acquired during the marriage

Property gained by gift or inheritance by one spouse is generally considered separate property belonging solely to that spouse. However, if the inheritance or gift is commingled with marital property, such as deposited into a joint account, it can lose its separate property status.

Property owned by a spouse prior to the marriage is also usually separate property. But its value could be subject to equitable distribution if it increased during the marriage due to contributions of marital funds or the efforts of the non-owning spouse.

How Minnesota Courts Determine Equitable Distribution

When spouses can’t agree on how to divide their marital property and debts, the court steps in to order equitable distribution.

Equitable does not mean equal in this context. The court will fairly divide marital assets based on what each spouse contributed to the marriage. The division does not have to be 50/50 or any other set percentage.

Minnesota judges consider the following factors when determining an equitable division of marital property:

• Length of the marriage
• Age, health, occupation, amount, and sources of income of each spouse
• Vocational skills and employability of each spouse
• Liabilities of each spouse
• Needs of each spouse
• Whether the property division is instead of or in addition to maintenance
• Contributions of each spouse to acquiring marital property, including homemaking
• Contributions of each spouse to the other spouse’s education or career
• Relationship history, like prior marriages
• Wasteful depletion of marital assets by either spouse.
• Tax consequences of the property division
• Hardship a sale of an item would cause

No single factor determines the division. The court looks at the overall contributions and circumstances of each spouse.

After weighing the equitable distribution factors, the judge will order a division of assets and debts it finds fair. This may result in an unequal division if one spouse clearly contributed more financially or through other efforts.

There is no set timeline for when equitable distribution occurs. The division can take place upon filing for divorce or after the divorce is finalized. The court may also order certain assets divided at different times depending on the complexity of the estate.

Spouses who disagree with the ordered distribution can file an appeal. However, appeals should be discussed with a lawyer first, as the court has broad discretion in equitably dividing marital property.

Tips for Navigating Equitable Distribution in Your Minnesota Divorce

Dividing up marital property equitably while emotions run high is difficult for divorcing spouses. Here are some tips to make the process smoother:

1. Identify all marital property. Make a detailed list of assets and debts acquired during your marriage. Account for all real estate, vehicles, investments, retirement accounts, personal property, and more. Being organized from the outset helps immensely.
2. Understand property values. Get professional appraisals done on homes, businesses, expensive collections, and other high-value marital assets. Know the exact values before starting property division negotiations.
3. Gather financial statements. Collect tax returns, bank statements, 401(k) balances, credit card statements, and other documentation to determine incomes, expenses, assets, and debts.
4. Consider tax consequences. Certain assets, like retirement accounts, have tax implications if cashed out or transferred. Discuss the tax outcomes of property division alternatives with your divorce attorney or financial advisor.
5. Start discussions early. Don’t wait until the divorce petition is filed to begin talking about property division. Enter mediation in good faith to reach an out-of-court settlement you both can accept.
6. Consult an attorney. An experienced Minnesota divorce lawyer can advise you on document gathering, valuation, taxes, negotiation strategy, and your legal rights regarding marital property division.

Negotiating an Equitable Division of Assets and Debts

Ideally, divorcing spouses can reach an agreement on dividing their marital property outside of court through negotiation and mediation. This allows you to control the division rather than leaving it in the hands of a judge.

When negotiating property division:

• Come to the table willing to compromise. Remain calm when discussing assets.
• Make proposals and counteroffers rather than demands.
• Consider both separate and marital property and who should get what.
• Account for your future financial needs.
• If stuck, suggest a neutral third party, like a mediator, to facilitate discussions.

The key is finding an equitable division you both can live with. Once you have an accepted marital settlement agreement, your divorce attorney can ensure it follows all legal requirements.

Protect Your Rights with a Knowledgeable Minnesota Divorce Lawyer

Dividing up accumulated marital property and debt often becomes the most contested part of a Minnesota divorce. Emotions and feelings of unfairness can derail negotiations.

Having an experienced divorce lawyer on your side levels the playing field. Your attorney can value assets, document your contributions, negotiate aggressively on your behalf, and ensure you receive a fair share of the marital estate.

The attorneys at Martine Law help clients navigate all aspects of the divorce process in Minnesota. Whether negotiating your marital settlement or fighting for your rights in court, we work tenaciously to protect your interests during this difficult time.

To discuss your situation in a consultation, contact us today. Our team is here to help you receive the equitable distribution you deserve.