How Does Equitable Distribution Work in Minnesota?

how does equitable distribution work

Getting divorced in Minnesota means navigating the state’s laws on equitably dividing marital property. Unlike community property states that mandate 50/50 division, Minnesota follows the equitable distribution approach when allocating assets and debts.

So, how exactly does equitable distribution work during a Minnesota divorce? What makes a property “marital” versus “non-marital”? What factors determine who gets what? This article examines the ins and outs of equitable distribution in MN.

What is Equitable Distribution?

Equitable distribution is an approach to dividing property in divorce proceedings. It involves classifying all assets and debts as either marital property or separate property. Marital property is then divided fairly between the spouses, while separate property is awarded to the spouse who owns it.

The key thing to know is that equitable distribution doesn’t necessarily mean equal division. While assets may be split 50/50 in some cases, the court also considers what is equitable or fair, given the circumstances. The final property division is based on statutory factors like income, financial condition, and conduct during the marriage.

How are Assets Classified in Minnesota?

The initial step in equitable distribution is discerning what qualifies as marital property as opposed to separate property.

Marital Property

Marital property is all property acquired during the marriage by either spouse. This includes:

  • Houses, land, vehicles, jewelry, art, furnishings
  • Bank accounts, stocks, bonds, mutual funds
  • Retirement accounts like 401(k)s and pensions
  • Businesses owned and appreciation of businesses
  • Income earned from employment+
  • Intellectual property created during marriage

Debts incurred during marriage are also considered marital property.

Separate Property

Separate property consists of:

  • Assets acquired before the marriage
  • Inheritances and gifts received by one spouse
  • Property excluded from the marital estate by a prenuptial agreement
  • Reparation for personal injuries suffered by one spouse.
  • Property acquired after the date of separation or divorce filing

Debts in one spouse’s name only are typically deemed separate debts.

What Factors Are Used to Divide Assets in MN?

Minnesota statutes list the following factors judges may consider when equitably dividing marital property:

  • Each spouse’s income, occupation, vocational skills, and employability
  • The length of the marriage
  • Any prior marriages of either party
  • The age, health, financial needs, and future prospects of each party
  • The tax consequences of the property division
  • Whether the property division is instead of or in addition to spousal maintenance
  • Each spouse’s contribution to acquiring marital property, including homemaking
  • Dissipation or destruction of marital property by one spouse
  • The effect the marriage’s dissolution has on each spouse’s ability to acquire future capital and income
  • The contribution of each spouse to the increased income or appreciation of assets owned by one or both spouses
  • Physical, mental, or chemical abuse committed by one spouse against the other or a child of either spouse
  • Any other factors the court deems just and equitable

No one element alone is determinative. The court looks at the full picture to reach an overall fair distribution.

Valuing Marital Assets and Debts

Before dividing property, the court must also determine the fair market value of each marital asset and debt. This typically involves appraisals, expert valuations, tax documents, bank records, and other financial evidence.

The valuation date is usually the date of separation or divorce filing. Any market increase or decrease after the valuation date will not affect the assigned value.

Proper valuation is crucial, as even small differences can shift thousands of dollars between spouses. Work with an experienced divorce attorney to ensure assets are accurately appraised. Work with a knowledgeable divorce attorney to guarantee the accurate appraisal of assets.

How is Property Actually Divided?

Once assets are classified and valued, the court decides who gets allocated which items. This may involve:

  • Awarding the marital home or other real estate to one spouse
  • Splitting retirement accounts according to a qualified domestic relations order (QDRO)
  • Dividing bank accounts and securities
  • Ordering the sale of property and dividing proceeds
  • Transferring interest in a business
  • Assigning responsibility for marital debts

The court tries to disentangle finances while keeping tax implications in mind. Retirement accounts, for example, can be divided without tax penalties through QDROs.

Modifying Property Division Orders

What happens if new assets are uncovered after the divorce? Or if one spouse fails to transfer property awarded to the other? In Minnesota, property division orders are final and generally cannot be modified. However, post-divorce motions can be filed to enforce compliance with the original decree.

It’s also possible to seek an amendment in limited cases involving fraud, mistake, or invalidity of the decree. Speak to a Minnesota family law attorney about your options.

Work With a Skilled Attorney for Equitable Results

Equitable distribution laws can be complex. It’s essential to have a trusted advisor in your corner who understands how to value assets, argue for property division, and ensure the outcome is fair.

At Martine Law, our family law attorneys have years of experience guiding clients through equitable distribution. We take a strategic approach while minimizing conflict, guiding you to the best resolution. Whether negotiating an agreement or advocating vigorously in court, we protect your rights through every stage.

For dedicated counsel on divorce and property division in Minnesota, contact us today.

Author Bio

Xavier Martine

Xavier Martine is the Founder of Martine Law, a Minnesota criminal defense and family law firm. Serving clients in Minneapolis, MN, and surrounding areas, he is dedicated to representing clients in a wide range of criminal matters, including DWIs, drug charges, misdemeanors, domestic violence, and other criminal charges. He also represents clients in family law matters, including divorce, child support, and child custody.

Xavier received his Juris Doctor from the Mitchell Hamline School of Law and is a member of the Minnesota State Bar Association. He has received numerous accolades for his work, including being named among the “Top 10 Criminal Defense Attorneys Under 40 in Minnesota” in 2021 by The National Academy of Criminal Defense Attorneys. He was also named the “Best DUI Lawyer in Minneapolis” award in 2023 by Expertise.com and a “Rising Star” in 2023 by SuperLawyers.

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