Property Division in Divorce Cases
Dividing assets and debts during a divorce can range from straightforward to highly complex. While marital assets and liabilities are generally split equitably, determining what qualifies as marital versus non-marital property and accurately valuing those assets can present challenges. Our experienced Minnesota property division attorneys are here to guide you through this process. Contact Barna, Guzy & Steffen today at (763) 783-5146 for legal support.
Equitable Division of Marital Estate
In Minnesota, marital assets and debts are divided in a fair and equitable manner, typically resulting in an equal split. The process involves:
- Identifying all assets and liabilities
- Determining their values
- Allocating them between the parties
When left to the court, the division usually results in an equal split of the net marital estate.
Marital and Non-Marital Assets
- Marital Assets/Debts: Property or liabilities acquired during the marriage (except for those deemed non-marital).
- Non-Marital Assets/Debts:
- Property owned before the marriage (e.g., student loans).
- Inherited property received by one spouse during the marriage.
- Gifts made specifically to one spouse.
- Assets acquired in exchange for non-marital property (e.g., selling a pre-marital car to buy another).
Balance Sheet and Equalization
To simplify the division process, attorneys create a balance sheet listing all marital assets and liabilities, along with their values. Once the total net marital estate is determined, it is divided equitably. If one party receives more value in assets, an equalization payment or redistribution of financial assets is used to balance the division.
Complications in Asset and Debt Division
Some assets present valuation challenges, such as homes, pensions, and businesses. Property division attorneys often collaborate with expert appraisers to ensure accurate valuations.
Some assets may have both marital and non-marital components. For example, equity in a home owned before marriage is non-marital, but any equity accrued during the marriage is considered marital. The burden of proving the non-marital portion lies with the claiming spouse.
Courts also address situations where one spouse wastes marital assets, such as through gambling, extravagant spending, or illicit activities. In such cases, the court may adjust the division to compensate the other party.
Title and Property Division
The name on the title of an asset does not determine whether it is marital or non-marital. The timing and circumstances of the acquisition are key factors. For example, a mortgage or vehicle loan solely in one spouse’s name may still be classified as marital property.
Minnesota Property Division FAQ
What is the process for dividing property in a Minnesota divorce?
The process begins by identifying all assets and debts, determining whether they are marital or non-marital, and assigning a value to each. Once the net marital estate is calculated, it is divided equitably between the spouses.
What is considered marital property?
Marital property includes assets and debts acquired during the marriage, such as income, jointly purchased real estate, and shared liabilities.
What qualifies as non-marital property?
Non-marital property includes assets acquired before the marriage, inheritances, gifts made exclusively to one spouse, and assets purchased with non-marital funds.
How are assets with both marital and non-marital components divided?
Assets with mixed components are divided based on their marital and non-marital portions. The spouse claiming a non-marital interest must provide clear evidence through documentation or financial records.
What role does a balance sheet play in property division?
A balance sheet lists and values all marital assets and debts, ensuring transparency and facilitating an equitable division.
How are disagreements about property valuation resolved?
When disputes arise about the value of homes, businesses, or pensions, professional appraisers may be hired to provide accurate valuations.
What happens if one spouse wastes marital assets?
If a spouse engages in financial misconduct, such as gambling or extravagant spending, the court may adjust the division to compensate the other party.
Does the name on a property title affect its division?
No. Property acquired during the marriage is typically considered marital, regardless of whose name is on the title.
How are business assets handled in a divorce?
Business assets are evaluated to determine their value, and their marital portion is included in the division. Business valuation experts are often consulted in these cases.
What happens if the spouses cannot agree on property division?
If spouses cannot reach an agreement, the court will determine division based on Minnesota’s equitable division laws, ensuring fairness for both parties.
Can non-marital property become marital property?
Yes. If non-marital property is commingled with marital property or used for marital purposes, it may lose its non-marital status.
How are retirement accounts divided in a divorce?
Retirement accounts accrued during the marriage are considered marital property and are divided equitably. This process may require a Qualified Domestic Relations Order (QDRO).
Is debt divided in the same way as assets?
Yes. Marital debts are divided equitably, taking into account each spouse’s ability to repay and the nature of the debt.
How are disputes about property division resolved?
Disputes may be resolved through mediation, negotiation, or court intervention. Experienced attorneys can help ensure a fair resolution.
Contact Barna, Guzy & Steffen Today
If you need assistance with property division in your Minnesota divorce, our experienced attorneys are here to help. Call (763) 783-5146 today to schedule a consultation with a trusted Minnesota property division lawyer at Barna, Guzy & Steffen.