Getting divorced does not necessarily mean splitting everything you own in half. Minnesota first looks at whether property is marital or nonmarital, and that distinction can affect what each spouse keeps when the marriage ends.
The same questions can come up with the house, retirement savings, vehicles, bank accounts, and other property. Debt also has to be addressed. If you are preparing for a divorce in Lake Elmo, understanding these basic rules can make the financial side of the process easier to follow. Our family law attorneys can help you understand how Minnesota’s property division rules may apply to your situation.
What Is Marital Property in Minnesota?
Property acquired by either spouse during the marriage is generally presumed to be marital property. This can include income, a home purchased during the marriage, vehicles, money in bank accounts, and retirement benefits earned during the marriage.
It usually does not matter whose name appears on the account, title, or deed. A retirement account in one spouse’s name, for example, can still contain marital property if money was contributed to it during the marriage.
Debts are also considered when dividing a couple’s finances. Credit cards, loans, mortgages, and other debts may need to be addressed as part of the divorce, but the way a particular debt is handled depends on the circumstances.
What Property Can Stay Separate?
Nonmarital property is property that generally remains separate instead of being divided between the spouses.
Common examples can include:
- Property one spouse owned before the marriage.
- An inheritance left specifically to one spouse.
- A gift made specifically to one spouse by someone other than the other spouse.
- Property purchased with money that can be traced back to a nonmarital asset.
For example, if you inherited a cabin from a grandparent during your marriage, that cabin may remain your nonmarital property. You may need records showing where the property came from and why it should remain separate.
Some assets can also be partly marital and partly nonmarital. Consider a retirement account that existed before the marriage but continued to grow while the couple was married. Part of the account may be separate while another part may be marital.
What Happens When Separate and Marital Money Get Mixed?
This is sometimes called commingling, which simply means mixing nonmarital property with marital property.
For example, one spouse might deposit inherited money into an account that also contains income earned during the marriage. Mixing the money does not automatically mean the inheritance becomes marital property, but it may make it harder to show which funds came from the inheritance.
Bank statements, account records, deeds, and other financial documents can become important when one spouse claims that an asset or part of an asset should remain nonmarital.
Does Minnesota Divide Marital Property 50/50?
Not necessarily. Minnesota law requires a just and equitable division of marital property. In plain language, the court looks for a fair division based on the circumstances rather than requiring every individual asset to be split exactly in half.
If spouses cannot reach their own agreement, a judge considers factors such as the length of the marriage, each spouse’s income and financial needs, their assets and debts, and their opportunities to earn income in the future. Contributions made as a homemaker are also recognized.
This does not mean the reason for the divorce determines who gets more property. Minnesota divides marital property without regard to marital misconduct. An affair, for example, does not normally give the other spouse a larger share of the marital property.
Hiding, giving away, or improperly spending marital assets can be different. If one spouse disposes of marital property while anticipating a divorce or while the divorce is pending, the court may consider that conduct when dividing the remaining property.
What Happens to the House and Retirement Savings?
The family home is often one of the largest assets in a divorce. There is no single rule requiring one spouse to keep it or requiring every couple to sell it.
Depending on the circumstances, the spouses may agree that one person will keep the home and compensate the other for their share. They may instead sell the home and divide the proceeds. If they cannot agree, the court can decide how the property should be handled as part of the overall division.
Retirement savings can also be marital property even when the account is only in one spouse’s name. Generally, the portion earned or accumulated during the marriage may be considered when dividing property.
Some employer-sponsored retirement plans require a Qualified Domestic Relations Order, or QDRO. A QDRO is a special court order used to divide certain retirement benefits between former spouses.
Different retirement plans have different procedures. Because of that, the divorce decree alone may not always complete the division of a retirement account.
Can Lake Elmo Spouses Make Their Own Property Agreement?
Yes. Spouses can often reach their own agreement about how to divide marital property instead of asking a judge to decide every issue.
Negotiation or mediation may be used to work through disagreements. Mediation is a process in which a neutral person helps the spouses discuss possible solutions but does not make the decisions for them.
Any agreement should account for the couple’s assets and debts. That can become more difficult when there are questions about property values, business interests, retirement benefits, or whether an asset is marital or nonmarital.
Reaching an agreement is not possible in every divorce. If the spouses cannot agree, the court can decide the disputed property issues under Minnesota law.
An attorney can help identify which assets may be marital or nonmarital, review financial records, and explain how different property-division options could affect you. A lawyer can also help address more complicated assets when ownership or value is disputed.
Coodin Law Office, LLC is a Lake Elmo law office serving families in Woodbury, Washington County, and surrounding Minnesota communities. If you have questions about dividing property in a Minnesota divorce, contact our law office to discuss your situation.