Minnesota Divorce FAQ’s – Property Division

This is about property division in divorce in Minnesota, including the general rule for Minnesota property division, what effect the length of marriage and conduct of the parties has on property division after divorce in Minnesota, how separate property works in Minnesota, and treatment of the marital home and retirement plans in divorce in Minnesota.

This information is from Maury D. Beaulier, the DivorceInfo Network Lawyer for Minnesota. Click here to visit his web site.

What’s the general rule of property division (equitable distribution, community property, or legal title)?

In a divorce, the parties divide up what is called the “Marital Estate.” The marital estate includes any assets or debts that were acquired during the marriage. Each spouse is deemed to have an equal interest in marital assets or debts.

This true no matter how property is titled or held and no matter which spouse’s job paid for the asset or which party incurred the debt. That means the marital estate includes a 401 K account or a credit card debt that is in your spouse’s name alone. In fact, marital property is inclusive and encompasses 401K plans, stock plans, stock options, real estate, frequent flier entitlements, bank account proceeds, couches, chairs, cars, utility debts, credit card debts and any other form of asset or liability.

Essentially, the law views marriage as a civil partnership with many of the characteristics of a business partnership. When you join a business general partnership, each partner has an equal interest in the ownership of the business and is exposed equally to the liabilities of the partnership. This is true even if one partner incurs the debt on behalf of the partnership or one partner performs all the work making the partnership a more valuable asset. The best way to determine what debt exists is to run a credit report.

What effect does the conduct of the parties have on property division?

Minnesota is a “No Fault” divorce state.  As a result, marital misconduct has no affect on property division.

What effect does the length of the marriage have on property division?

The length of the marriage has little impact on property division. However, certain issues are considered non-marital.   That means they do not have to be divided between the parties. These are called non-marital assets.

Is there such a thing as separate property? What does it take?

Yes.  Nonmarital assets are considered separate property and may include:

Premarital. Any asset acquired before the marriage (if the asset was encumbered by a loan that was paid off during the marriage, it may only have a partial non-marital value);

Prenuptial Exclusions. An asset excluded by a valid prenuptial agreement;

Personal Injury Proceeds. Personal injury settlements are generally considered personal to the injured party and are non-marital in nature;

Inheritance. Any proceeds or assets from an inheritance;

Gifts. Any asset acquired as a gift to one, but not both parties.

Any special rules for the marital home?

There are no special rules for the marital home.  However, many people are under the mistaken impression that a parent with custody stays in the marital home without dividing the marital equity until the last minor child reaches the age of 18.  that is not generally the case.  In most cases, the marital equity is divided unless it creates an extreme hardship and endangers the children.

How do retirement plans get divided?

Retirement plans, like any other asset, may be divided.  Any retirement benefits accrued during the marriage would be considered part of the marital estate and divided between divorcing parties.

Other issues in Minnesota:

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