Twin Cities Divorce Attorneys & Lawyers

One common source of disputes and extended litigation in divorce proceedings is how to divide the parties’ real estate and personal property. Typically, only property the court deems “marital property” will be divided between the parties. “Nonmarital property” will usually be returned to the party who acquired it or received it.

Division of Property in a Minnesota Divorce

Marital Property vs. Nonmarital Property

The most important fact for determining ownership interest in property is the timing of the purchase of property, not whose name is on the title. Minnesota law defines marital property as anything accumulated by either party during the marriage. This means that earnings and property acquired by either spouse are viewed as joint property. The philosophy underlying this is that marriage is a full partnership, and that the contributions of one spouse are equal in value to those of the other spouse. Marital property includes pensions and retirement investments acquired or earned during the marriage, as well as any increase during the marriage in the equity in property.

Marital property is generally divided as equally as possible. However, one party will often receive more property than the other as items are divided because some property cannot be divided. When this occurs, a cash payment (known as”equalization”) is typically made from the spouse receiving more property to the spouse receiving less property in order to equalize the cumulative value of the marital assets.

Nonmarital property is property that one party brought into the marriage, property that was inherited by one of the parties during the marriage, property that was given to one party but not the other during the marriage, or the “fruits” of those categories of nonmarital assets. In most cases, property acquired before the marriage, property acquired after separation and gifts or inheritances received by one spouse during the marriage are not considered marital property. In general, nonmarital property should go to the person who brought it into the marriage, inherited it, or received it as a gift.

The Court in some cases can divide nonmarital property if a party can establish an “unfair hardship.” Moreover, there are some situations in which the increased value of nonmarital property can be considered to be “marital” property. The experienced family law attorneys at Germscheid, Heimerl & Lammers can help you determine the nature of your property.

Property that can create controversy during divorce

Divorcing couples should be aware of the issues these assets present:

• Family Home. The primary residential property owned by the divorcing couple is often the marriage’s largest asset. Dealing with its division can be complicated, particularly when there are children involved. Courts often favor allowing the custodial parent to retain the home, in which case complicated arrangements must be made to ensure that the spouse who does not live in the home receives adequate compensation for its value. In addition, the court and the parties must make provisions as to who is responsible for ongoing mortgage payments, tax liabilities and upkeep of the home. When these issues cannot be resolved, the couple may be forced to sell the home and divide the proceeds.
• Pensions. Pensions often are the second-largest marital asset. A court in a divorce case may enter a Qualified Domestic Relations Order (QDRO), requiring the administrator of the ERISA-regulated pension to divide the account(s) and make payments to both the employee and the former spouse.
• Family-Owned Businesses. When spouses have a family-owned business, division of the business presents complex allocation and valuation problems. As with family homes, if there are not enough marital assets to compensate the non-retaining spouse adequately, a forced sale or long-term buyout may be necessary.
• Debts. Debts are typically treated the same way as assets. Often, the court will allocate all debts incurred during the marriage equally between the parties. Debts that remain from before the marriage or post-separation are typically allocated to the party who incurred the debt. The value of a particular debt is usually verified through a recent statement. Also, parties will generally take on debt associated with an asset awarded to them through property division.

Minnesota Property & Debt Division Lawyers & Attorneys

Once the court decides which property is marital property, it must determine the value of the property and allocate it between the parties. If you and your spouse are able to agree upon the allocation of property and other important matters, you will have a far greater influence over the court’s ultimate decision. If the parties agree among themselves on the value of marital property, they might not need appraisals.

In order to learn the value of property over which the parties themselves cannot come to an agreement, one or both of the parties retain experts, such as real estate appraisers, actuaries, business evaluators and other individuals with specialized knowledge in determining the market value of various assets.

Disputes can arise in the valuation of assets or in the actual division of the asset, or both. For example, the determination of the current market value of a closely held family business, partnership, or corporation is a very complex issue that may well require a family law attorney to utilize the services of a Certified Public Accountant or a trained Business Valuator or Appraiser.

Contact Our Divorce Lawyers In Minneapolis

Marriage dissolution settlements involve many big decisions, and it is important that you have accurate information upon which to base those decisions. Contact a family law attorney at Germscheid, Heimerl & Lammers today to discuss your situation.