Dividing Property in a Minnesota Divorce

A man splits a house with his palm with images of property, children and pets. - KM Family Law

When your marriage is over and it is time for you and your spouse to go your separate ways, all your collective property will need to be divided between yours and theirs. Dividing property in a Minnesota divorce is a question of fairness, but it can also be an emotional challenge. Find out what you can do to make sure you walk away with what matters most to you.

In this blog post I will talk about the laws that control dividing property in a Minnesota divorce. I will explain what you can expect when it comes to homes, retirement accounts, and personal items, and I will talk about how you and your spouse can work together to come up with a property division that makes sense to you.

Step 1: Identify Marital Property to Divide

In a Minnesota divorce, all property owned by either spouse is considered “marital property” to be divided unless it qualifies as non-marital for one reason or another. That means the first step to dividing property in a Minnesota divorce is identifying which property won’t be divided:

  • Property one spouse owned before the marriage
  • Inheritances either spouse received at any time
  • Gifts given solely to one spouse from anyone but the other spouse

Step 2: Prioritize Your Needs

If you are going through a divorce, your marital property will be divided based on principles of equity and fairness. This doesn’t mean you automatically receive 50% of each asset. You, your spouse, and your attorneys can negotiate how to divide the property depending on your needs, and your goals. This could include:

  • Keeping possession of the home where your children grew up
  • Protecting retirement or investment assets
  • Having enough money on hand for living expenses or a down payment on a new home
  • Keeping important personal property items, collections, or vehicles

There is no one right answer in dividing property. What is a priority for you may not matter to your spouse. There may also be many ways to accomplish your goals. By brainstorming and getting clear on your top needs and desires, you can make space for flexibility when it comes time to negotiate the division of marital property.

Step 3: Negotiate an Equitable Property Division

In most cases, negotiating who gets what property starts even before the complaint for divorce is filed. If you are already separated, one spouse probably took some of the most important items with them when they left. You may already have an inclination on which property will be most important to each spouse.

Most of the time, the big items -- like the family home or retirement accounts -- will present the biggest challenges in dividing property. Try to focus on these issues and work with your attorney to find creative solutions based on your priorities. Smaller items, like furniture, personal items, and sentimental keepsakes often fall into place once the big concerns are out of the way. Here are some starting points for dividing property in a Minnesota divorce:

Homes and Real Property

In many cases, one spouse will take possession of the family house and all the bills associated with it after the divorce. The other spouse will be entitled to payment or property to account for his or her equitable interest (usually around 50%) in the net value of the home or other real property. In other cases, you may decide to sell the property and split the net proceeds from the sale. If one spouse owned the home before the marriage, you should talk to your attorney about what part may count as non-marital and how much the spouse who moved in may be entitled to.

Retirement Accounts

If either spouse earned retirement benefits during the marriage, the other spouse is entitled to an equitable share (usually around 50%) of the portion earned during the marriage. This applies to 401(k)s, pensions, IRAs, and annuities. If you are trying to protect your retirement assets, you should be prepared to offer some other assets in exchange, such as savings accounts or equity in the family home.

Bank Accounts

Money held in bank accounts is often easiest to divide during divorce. Each spouse is entitled to half of any marital accounts. You will often see attorneys offset these accounts, rather than splitting each one down the middle (where one spouse keeps all of account A and the other keeps accounts B and C, with account D being divided). What matters is that the end value of all assets is equitably divided.

Family Debts

Minnesota courts also must resolve marital debts during a divorce. Each debt will be labeled “joint” or “sole” based on what the money was used for, and who benefited from it. If a debt is associated with a specific piece of property (like a mortgage on a home or a car loan), that debt will usually be assigned to the person receiving the property. If one spouse has a lot more income or ability to pay off debts as they come due, it may make sense to award that party more of the family debt and reduce the property the other spouse receives to account for it financially.

Furniture and Personal Property

In many cases, people getting divorced think their furniture and personal property is worth more than it really is. Personal property, like all other assets must be divided fairly and equitably. However, judges don’t generally spend a lot of time arguing over dishes or holiday decorations. If the parties can’t agree on who will take what, you may find that the judge will order you to hold a garage sale and split the proceeds. That could leave you spending a lot of money replacing furniture and other personal effects. If there is furniture or personal property that is particularly important to you, be sure your attorney knows about it. If it is valuable (like a vehicle or collection), you may need to establish its worth as part of the negotiation process.

Step 4: Ask for a Judgment Dividing Property

When you are negotiating a property settlement, you, your spouse, and your attorneys can control which property goes on which side of the equity scale. You can adjust bank accounts and debts, or agree to take less equity in a home in exchange for a larger portion of the retirement account. As long as the final balance to each side is fair, your judge will likely sign off on a judgment dividing property.

If you can’t reach a resolution, then the judge will decide the division of property for you. Most judges will honor partial agreements (especially when it comes to personal property), and only hear evidence on the parts where you and your spouse don’t agree. Then the judge will make a decision, awarding the property equitably based factors like:

  • The length of the marriage
  • Prior marriages of either party
  • The age, income, occupation, and health of each spouse
  • Employability or disability of each spouse
  • Contributions by each spouse to the marital property (including as a homemaker)

Dividing property in a Minnesota divorce isn’t just about dollars and cents. You need to have a strategy and goals clearly defined to protect what is most important to you. No one leaves a divorce with all the assets, so talk to your attorney about what is fair and equitable, and work together with your spouse to honor each other’s needs. Otherwise, you could face a judge who will simply “split the baby.”

Kimberly is an experienced mediator with a successful record in reaching positive solutions for families. She can use facilitated mediation techniques to help you and your partner, spouse, or co-parent resolve your family disputes outside the courtroom. If you would like to learn more about facilitated mediation, please contact Kimberly.