In Angell, former husband and wife in a marriage dissolution proceeding respectively challenged the district court's classification and division of death benefits paid after their son died during active military duty. The son had named only his mother as the beneficiary of his military life-insurance policy, which, by federal law, also made her his beneficiary in a federal death-gratuity program available to active-duty service members.

The district court classified these funds as Loretta Angell's exclusive nonmarital property but awarded Gordon Angell a share to prevent an unfair hardship.

Loretta Angell argued that this award violated federal anti-attachment statutes protecting military death benefits.

Gordon Angell filed a notice of review challenging the district court's property classification. He argued that the district court should have classified the life-insurance and death-gratuity benefits as marital property because Loretta Angell did not acquire them as a gift, bequest, devise, or inheritance and because she did not overcome the presumption that property accumulated during marriage is marital property.

Judge Ross concluded that the district court properly classified the life-insurance and death-gratuity benefits as Loretta Angell's nonmarital property, and affirmed the district court‟s classification. But, the Court of Appeals also opined that federal law prohibits the district court from relying on state law to divide the benefits between the parties.

This appears to be an issue of first impression in Minnesota. Interesting, too, that a conflict of laws issue between state and federal statutes found its way into family court. For these reasons, it appears the Minnesota Supreme Court wishes to weigh in. We'll keep you posted.

Marital property is usually divided equally while non-marital property is allocated entirely to the party who maintains the non-marital interest. Non-marital property involves the interest a party has in property accumulated prior to a marriage or property received as a gift or inheritence by one spouse, individually, during a marriage. Marital property involves any property that the parties accumulate during their marriage, including home equity, retirement assets, business interests, bank accounts, investments, motor vehicles and other property of value.

In order to ascertain the value of property, experts are typically retained. These include real estate appraisers, actuaries, business valuators and other individuals with specialized knowledge in determining the market value of various assets.  These experts can be retained by one or both of the parties.

Once all property interests are valued, a balance sheet is put together to reflect the allocation each party will receive.  Naturally, one party will receive more property than the other as items are divided.  When this occurs, a cash payment (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 assets they receive as a result of the dissolution of marriage.

Debts are typically treated the same way as assets.  Quite often, the court will allocate all debts incurred during the marriage equally.  Debts that remain from a time preceding the marriage are typically allocated to the party incurring the debt.  The same is true for debts incurred post-separation. The value of a particular debt is usually verified through a recent statement. Typically, if the party is allocated an asset they will take any debt that accompanies it.  A prime example involves an automobile.  If one spouse takes a car, they will likely have to accept responsibility for the debt associated with it.

In Minnesota, an injury survivor can recover damages for a host of "losses," including past and future wage loss, past and future medical expenses and pain and suffering.

Because wages are considered marital property, the past wage loss portion of an injury settlement is deemed marital in nature. The same is true of proceeds received to pay for past medical expenses: a marital liability. As a result, this portion of the personal injury or worker's compensation award is subject to division among the parties.

However, an award for future wage loss and payment received for future medical care is non-marital. Earnings realized following a dissolution of a marriage remains the exclusive property of the earning spouse. Similarly, a debt incurred by a spouse following divorce must be paid by the person who incurs the obligation. Therefore, these portions of an injury settlement are non-marital in nature and are not subject to division.

Similarly, payments made for pain, suffering and loss of enjoyment of life are not subject to division. In a literal sense, your body is non-marital in nature. You brought, for example, your hand into your marriage. Your hand is not subject to division if the marriage dissolves. If you lose your hand in an accident, you have lost a non-marital asset. Compensation for the lost non-marital asset is non-marital as well.

Difficulty rests in the fact that most personal injury cases are settled before trial. The parties will sign a release form. However, that release form does not typically break down the award into neat categories, leaving room for argument on both sides. A jury verdict form, however, will break down the portion of the award given for wage loss, medical bills and pain and suffering.