Going through a divorce in Minnesota can be an emotional and difficult time. When relationships break down, some spouses may try to take marital property or spend marital assets inappropriately.
However, Minnesota is an “equitable distribution” state when it comes to divorce, which means marital property should be divided fairly between spouses. Removing assets or dissipating funds before the divorce is finalized can really damage your settlement.
What is Considered Marital Property in Minnesota?
Minnesota is an “equitable distribution” state when it comes to divorce. This means that marital property is divided equitably between spouses, but not necessarily equally. Marital property generally includes any assets or debts that were acquired during the marriage by either spouse. This can include:
- The marital home and any other real estate purchased during the marriage
- Bank accounts opened in either spouse’s name
- Retirement and investment accounts
- Businesses started during the marriage
- Vehicles, jewelry, art, and other personal property obtained during the marriage
- Credit card debt, loans, and mortgages taken out in either spouse’s name
In Minnesota, all marital property is subject to equitable division by the court during divorce. This is true even if only one spouse’s name is on the property or debt. The court will look at each spouse’s contributions to acquiring marital assets when determining a fair distribution.
However, gifts and inheritances are generally considered separate, non-marital property as long as they have been kept separate from marital assets. For example, if one spouse receives an inheritance of $50,000 during the marriage and deposits it into a personal bank account in only their name, those funds are considered separate property.
How Marital Property is Divided in Minnesota
Once you’ve taken steps to prevent dissipation, the next matter is the actual division of marital property during divorce. There are a few options on how assets can be divided:
- You and your spouse can try to negotiate a settlement agreement on property division through divorce mediation before going to court. As long as the agreement is equitable, the judge will generally approve it.
- If you cannot agree, the court will order an equitable division of assets and debts based on each spouse’s circumstances and contributions. The court will look at factors like income, need, and custodial arrangements for children.
- The judge can order certain assets or debts to be awarded to one spouse if there is a reasonable basis for an unequal division. For example, one spouse may be awarded the marital home for the children.
- In rare cases, the court awards joint ownership of an asset, like a shared business venture, so the spouses maintain an ongoing financial relationship.
- The spouse who dissipated marital assets could get a smaller property settlement as a consequence. The judge has broad discretion to make the division fair.
Equitable distribution does not mean each spouse gets an exactly equal, 50/50 split of property. The court strives for a fair division based on the totality of circumstances. It’s critical to have an experienced Minnesota divorce lawyer on your side during property settlement negotiations and litigation to help secure a favorable outcome.
Is it Legal to Remove Marital Property Before Filing for Divorce?
The short answer is: it depends. There are certainly legal ways to divide assets before a divorce is filed. For example, spouses may agree to sell the house and split proceeds or withdraw equal funds from a joint bank account.
However, it becomes illegal when one spouse intentionally hides, damages, or spends marital assets without the other’s knowledge or consent. Courts call this the “dissipation of marital assets.”
Some warning signs of illegal pre-divorce property removal include:
- Transferring money to a separate account in your name only
- Putting property or accounts in someone else’s name (like a family member)
- Making unusually large purchases or gifts to deplete funds
- Destroying valuable property like art, jewelry, cars, etc.
These actions can have serious consequences if discovered later.
Consequences for Removing Marital Assets Before Divorce
It’s not uncommon for spouses to make questionable financial moves when going through a divorce in Minnesota. For example:
- Transferring money out of joint accounts into separate accounts
- Selling assets and keeping the cash proceeds
- Spending extravagantly on themselves using marital funds
- Quitting a job to avoid paying spousal maintenance
- Running up debt on joint credit cards
These actions are known as the “dissipation” of marital assets. Dissipation occurs when one spouse intentionally wastes marital assets or reduces their value for personal benefit. Judges frown upon this behavior and can penalize the spouse for dissipating funds.
Some potential consequences include:
- The judge assigning the full dissipated value to the spouse who misused the funds
- Not getting your fair share of remaining marital property
- Paying more spousal or child support to make up for lost funds
- Being held in contempt of court for violating orders
To protect yourself, speak to a Minnesota divorce lawyer as soon as possible when separating from your spouse. Getting the right information early can help minimize the damage from dissipation.
How to Protect Marital Assets During Separation
If you believe your spouse may be dissipating assets or moving marital property before filing for divorce, it’s critical to talk to a Minnesota divorce attorney right away. An attorney can advise you on the proper steps to protect your rights and shared assets during separation.
Some tips include:
- Avoid joint bank accounts: Open personal checking/savings accounts to prevent funds from being withdrawn.
- Change account passwords: Update logins and passwords for your personal email, social media, and financial accounts.
- Document property: Photograph expensive items and account balances to record their existence before separation.
- Speak up: Voice your concerns clearly and in writing that marital property should not be dissipated
- Seek legal intervention: Your attorney can file motions to prevent dissipation, freeze assets, or force your spouse to account for their spending.
Leaving the Marital Home During Separation
Another common question that arises is whether one spouse can legally move out of the marital home before the divorce is finalized. The answer is yes, although there are some important factors to consider. You should inform your spouse in writing before voluntarily moving out to avoid accusations of abandonment.
Moving out could affect child custody if you have minor children, especially if one spouse is granted temporary exclusive occupancy of the home. There may be temporary spousal maintenance ordered to help the spouse remaining in the home maintain the same standard of living. You cannot stop paying your share of the mortgage and bills since the home is still jointly owned.
Removing personal property from the home could be seen as dissipation, so talk to your family lawyer first. The judge will likely still order the eventual sale and division of equity in the marital home down the road.
In high-conflict divorces, it is sometimes wise for one spouse to remain in the home as “temporary relief” during the divorce process. If you or your spouse feels endangered in any way, get legal guidance right away on steps like filing a restraining order. Your safety and housing stability are paramount concerns.
How Martine Law Can Help with Your Minnesota Divorce
The experienced divorce attorneys at Martine Law fight to protect our clients’ rights regarding marital property division. We work closely with you to determine assets, account for dissipation, and take steps to prevent further loss of marital funds.
Our goal is to help you achieve an equitable property settlement so you can move forward with your life after divorce. To get started on your case, contact our Minnesota law offices today to schedule a free consultation.
