Dividing assets you’ve worked so hard to acquire can be extremely distressful. The household expenses suddenly increase as there are two households to keep afloat: housing expenses for two residences, two utility bills… while at the same time, each party loses part of the assets for which they worked so hard. This division can create a lot of conflict, stress and anxiety. In a marriage dissolution proceeding in Minnesota, the court will “equitably” divide the marital assets. This doesn’t necessarily mean the assets will be equally divided, with half going to each spouse. The court will look at many factors when determining what each party will receive.

KMH will advise you about what an “equitable distribution” of property could mean with respect to the assets owned by you and your spouse. We will explain what types of property is considered “marital property” and therefore divided equitably between the parties, and which is non-marital property, which generally belongs to just one spouse. We will work tenaciously to ensure that you receive the share of marital property you are entitled to so you have the financial wherewithal to smoothly move into the next phase of your life.

Overview  Minnesota Property Division Law

Marital & Non-Marital

In a Minnesota marriage dissolution proceeding, property is divided into two categories:“marital property” and “non-marital property.”. Marital property is generally property that was acquired during the marriage, regardless of who actually has legal title to it. Non-marital property is property that:

Non-marital property is property that:

  1. Either spouse acquired before the marriage;
  2. Either spouse acquired after a “valuation date,” which is a date the court sets to value property for purposes of dividing it in the dissolution proceeding;
  3. Either spouse acquired as a gift or bequest to one spouse but not the other;
  4. Is excluded from marital property pursuant to an antenuptial agreement (also known as a “prenuptial agreement”) or a postnuptial agreement or;
  5. Is acquired in exchange for or is the increase in value of any of these types of property.

The Difference

Non-marital property is generally awarded to the owner of the property, unless it would cause an “undue hardship” not to share it with the other spouse. Non-marital property generally loses its non-marital status if it’s merged with marital property unless it can be easily traced back to the non-marital property.

Determining whether income or appreciation received from the non-marital property becomes marital property can be somewhat complicated. Income received from non-marital property is deemed marital property because it’s a product of the asset. It can liquidated and sold during the marriage. However, appreciation of the asset is deemed non-marital property because it’s intrinsic to or part of the asset. It can only be realized when the asset is sold. For example, rental income and stock dividends from non-marital property are marital property. To further complicate matters, courts treat active and passive appreciation of non-marital assets differently. If a non-marital asset increases in value due to the actions of the spouse who does not own the non-marital property, the increased value becomes marital property. For example, if a spouse inherits a house that is non-marital property, but the other spouse spends time renovating or taking other actions to increase the value of the house, that value becomes marital property which is divided between the spouses if their marriage is dissolved.