Virtually every divorce involves the division of
property. In using the term "property", we are talking about
everything that you and your spouse own. With the event of no-fault
divorce, which essentially removed the relevance of marital misconduct
from consideration, many spouses may have a tendency to bring anger
and animosity to this part of the settlement negotiations. Such emotion
is counter-productive for everyone and should be dealt with outside
the bargaining table of property division. The division of your marital
property may be the most important economic event of your lives, and
should be dealt with in a mature and businesslike manner.
Division of property in Minnesota is done by "equitable
distribution". Upon divorce, a couple's property is subject to
being divided on a more or less fair or "equitable" basis.
The courts use this method if you and your spouse cannot come to an
agreement regarding the division of your marital property. Keep in mind,
that you and your spouse may legally divide your property in any manner
that you choose and can mutually agree on. However, the division must
be relatively fair or the judge may change the division in the final
settlement documents.
Marital Property
All property earned or acquired at any time during the
marriage is considered marital property regardless of whose name may
be on the title or who actually paid for it. Marital property includes
real estate, vehicles, furniture, cash, jewelry, tools, equipment, business
assets, retirement accounts, investment accounts, savings, and educational
degrees acquired during the marriage. All of a couple's bills and obligations
that are incurred during a marriage are also considered marital property.
These will also be divided upon divorce.
If property is not considered marital property, it is
referred to as "separate" or "nonmarital" property.
This type of property includes:
- Property acquired by inheritance before or during the
marriage
- Property that each spouse owns individually prior to
the marriage
- Property acquired by an individual gift either before,
during or after the marriage
If the property has a nonmarital component, you must be
able to trace the nonmarital asset to the particular item of property.
Sometimes assets are partly marital and partly nonmarital. Determining
the extent of the nonmarital and marital aspects sometimes requires
the use of independent experts.
Before making the important decisions regarding property
division, it is important to make a complete inventory of all property
and debt owned by both parties at the time of the divorce. This is sometimes
an overwhelming task at a time when emotion prevails over material matters.
It is important to keep the emotions of divorce separate from the division
of marital assets and debt. The implications of your property division
will affect you and you family long after the emotions have subsided.
If you and your spouse have a large amount of property or if you are
confused about your rights, it is wise to consult a professional. If
you and your spouse cannot reach an agreement both of you think is fair,
you should seek the help of a family law attorney or mediator.
Do not try to hide or conceal any of the assets that
belong to you and your spouse. If your divorce ends up before a judge,
you will be required to account for this action. This is economic misconduct
that may influence equitable division. Additionally, large sums of money
can be wasted when one spouse fails to produce documentation regarding
property. Months can go by while both parties request discovery and
wait for this type of documentation. Each request costs money and delays
are costly. Eventually all property will need to be accounted for in
the final division. Deal with these matters up-front in an honest and
businesslike manner. It rarely works to hide assets and can work against
the party who attempts this misconduct.
Debts:
The debts you acquire as a married couple will
need to be divided upon divorce. Generally, debt is divided equally
between spouses; however, the Court may look at different factors in
determining what is an "equitable" split. These factors may
include each party's earning ability, who incurred the debt, or which
party may benefit from paying the debt as an individual. When debt is
not tied to a particular asset or piece of collateral, it may simply
be added up and held against the total assets to determine the value
of the marital estate. If one spouse assumes more debt than the other
does, it may be offset by that spouse being given that dollar amount
in marital assets.
