The Subtle Art of Dividing Assets in Divorce
Divorce is never easy, but divvying up the assets and possessions you likely spent years accumulating can be especially tricky and emotionally charged. Here in Minnesota, we have some unique laws when it comes to splitting marital property during divorce proceedings.
The division of assets often becomes a major point of contention between couples who are separating, and tensions frequently run high when determining who gets what.
However, if you arm yourself with knowledge of Minnesota’s marital property laws and take the right approach, you can subtly master the art of dividing assets in your favor to get your fair share.
Follow the tips in this article, and you’ll become a pro at equitably splitting your marital estate while avoiding a court battle over each and every plate and pillow.
Know Your Marital Property Laws
Minnesota is an “equitable distribution” state when it comes to dividing marital property in divorce. This means marital assets are divided in a fair and just manner, but not necessarily equally.
Several factors are taken into account when determining an equitable distribution, including:
- Each spouse’s income, employment, and employability
- The length of the marriage
- Each spouse’s contribution to acquiring assets during the marriage
- Each spouse’s economic circumstances at the time of divorce
- The tax consequences of property division
- The loss of inheritance or gift due to the dissolution
- The preservation of assets like a family business
While the court has broad discretion in dividing property, the general goal is a “just and equitable award.” Typically, assets are divided close to a 50/50 split, but the court can deviate from equal distribution based on the circumstances of the case.
What is Considered Marital Property?
Marital property generally includes any assets acquired or earned by either spouse during the marriage.
This may include:
- House or other real estate
- Cars and vehicles
- Bank accounts and investment accounts
- Retirement accounts like 401(k)s and IRAs
- Businesses or business interests started during the marriage
- Personal property like furniture, jewelry, art, etc.
The key factor is that these assets were obtained while the couple was married, making them joint marital property even if only one spouse’s name is on the accounts.
How Do Courts Determine What is Separate vs Marital Property?
While most assets acquired during marriage are deemed marital property, there are some exceptions. Separate property is any asset that was owned by one spouse prior to getting married or received as an inheritance or gift (solely to one spouse) during the marriage. Separate property remains the sole legal property of that individual spouse.
Some examples of separate properties include:
- Assets or property owned before marriage
- Inheritances received by one spouse
- Gifts given to one spouse during marriage
- Compensation from personal injury lawsuits
Courts will look at when and how assets were obtained and account and property records to determine if something is separate or marital property.
Who Gets the House in a Minnesota Divorce?
One major asset that must always be addressed is the marital home. If not considered separate property, most couples have two options — sell it and split the proceeds, or one spouse keeps the home.
Family court judges will consider a number of factors when deciding who gets the house in a divorce. Things like your finances, whether or not you have minor children, equity in the home, and sentimental value will all be considered in the final decision.
No matter what option you choose, getting professional appraisals and understanding laws regarding capital gains taxes from home sales during divorce is key.
How to Divide Assets in a Divorce (the Right Way)
There’s a right way and a wrong way to go about divvying up the property you accumulated in your marriage. Do it the wrong way, and you could get short-changed.
But follow our battle-tested tips to divide assets like a pro, get your fair share, protect your future, and make this process as painless as possible. This is how to equitably divide your hard-earned marital estate while maintaining your sanity.
Make a List of All Assets
Start by listing out all marital property – this includes the house, vehicles, investments, retirement accounts, jewelry, furniture, everything. Even frequent flyer miles count!
Document details like who owns each account, account numbers, balances, and fair market values. This will come in handy during negotiations. Here’s a pro tip: Even if your name isn’t on certain accounts, it can still be considered marital property.
Get Financial Statements and Appraisals
Part of dividing assets is determining their value. Get official statements for bank accounts, investment accounts, and retirement plans. For physical possessions like houses, cars, art, and jewelry, you may need professional appraisals.
These documents will be crucial for negotiations and court proceedings. Make copies!
Know How Different Assets Get Divided
In Minnesota, different types of marital property are divided differently:
- Cash assets – Typically split 50/50. This includes bank accounts, investments, stock options, bonuses, etc. Easy peasy.
- Retirement plans – Each spouse keeps their own account. The value may be offset with other assets to balance the split.
- Real estate – Options include selling and splitting proceeds, having one spouse buy out the other’s share, or transferring ownership.
- Personal property – Furniture and other possessions are divided equitably, either by agreement or the court.
Negotiate the Division
Divorcing spouses are encouraged to try to reach an out-of-court settlement regarding the division of assets through mediation, collaboration, or attorney negotiation. Settlements should follow state laws regarding property division.
Being realistic, keeping emotions in check, and understanding your rights regarding marital property are key to reaching an equitable agreement.
Identifying priorities like retaining the family home or maintaining a certain vehicle can help guide negotiations. Hiring an experienced divorce attorney to review any settlement agreement before finalizing it can also help protect your interests.
Let the Court Decide, if necessary.
If you and your spouse cannot agree on how to split marital property, the court will determine the distribution of assets and debts.
Be prepared to disclose documentation like tax returns, pay stubs, credit card statements, loan documents, and investment account statements. The court has the authority to demand evidence if it believes assets are being concealed.
During a trial, spouses and their attorneys will present their case for how marital property should be divided. Witnesses like appraisers may provide testimony on the value of assets. The judge will consider all evidence before issuing a binding order allocating assets between the spouses.
Working with an Experienced Divorce Attorney Provides Guidance
Dividing marital assets and liabilities during a divorce can undoubtedly feel overwhelming.
Their compassionate support can help you understand your rights and navigate property division under Minnesota law as you move forward with dissolving your marriage.