Property Division Lawyers in Minnesota
The valuation of assets and tracing of non-marital interests can present a host of challenges. Marital assets and debts are typically divided equally among the parties. Property and debt division is relatively straightforward for some, and rather complicated for others. Our property division attorneys in Minnesota are here to help.
Equitable (Equal) Division Of Marital Estate
Allocation of the assets and liabilities of the parties is necessary in every divorce.
While the law is relatively straightforward (the court shall divide assets and liabilities in a fair and equitable manner), the calculation of the relevant interests of the parties can be challenging and will likely require assistance from experienced property division lawyers in Minnesota.
Generally, if left to the court, the marital assets and debts will be divided equally among the parties.
The first step in the analysis involves a determination of what is “marital” and what is “non-marital.”
Podcast: Division and Assets and Debts in Divorce
Marital And Non-Marital Assets
A marital asset (or debt) involves a property or liability accrued, or incurred, during the marriage, that is not otherwise non-marital property.
Non-marital assets (or debts) include:
- Property (or liabilities) brought into the marriage (student loans);
- Property inherited by one party, and not the other, during the marriage ($50,000 from aunt Mable’s estate);
- Property gifted to one party, and not the other, during the marriage (a piece of fine jewelry); or
- Property acquired during the marriage in exchange for other non-marital property (selling one pre-marital classic car to purchase another)
Balance Sheet Allocation & Equalizer
The best way to approach the allocation of assets and debts involves the creation of a balance sheet by one of our experienced property division attorneys in Minnesota. All marital property will appear on the balance sheet, along with any marital liabilities. Each item must be valued – whether by agreement, appraisal, or documentation.
When all of the positive and negative numbers are added up, the value of the net marital estate is determined. That figure is divided by two, to arrive at each party’s proportional share.
Once the value of each party’s interest is ascertained, the litigants can begin allocating the relevant assets and debts. Once allocated, those numbers are added up. If one party has received more value than the other, they must somehow make the other “whole” by equalizing.
Property equalization usually takes the form of a cash payment, or redistribution of retirement interests or bank accounts, to effect an equal division.
Complications In Asset & Debt Division
Complications often arise in valuing assets. How much is the marital home worth? How about pension interests? What about a business owned by the parties? Our property division lawyers in Minnesota frequently coordinate with expert state appraisers to assist.
Some assets have both a marital and a non-marital component.
For example, a litigant may have owned a home prior to the marriage. If that home had equity on the date of marriage, said equity is non-marital (and falls off the balance sheet).
Suppose the litigants continued to reside in the home together, and paid off the relevant mortgage during the marriage. That portion of home equity would be considered marital in nature (and lands on the balance sheet).
In a situation in which property has both a marital and non-marital component, the person who seeks to establish the non-marital interest has the burden of proving (tracing) their non-marital claim.
Sometimes a spouse will “waste” the marital estate, by incurring significant gambling debts, spending money on a new love interest, or purchasing drugs.
In those situations, the court has the authority to make the other party whole by placing the waste on the balance sheet in favor of the offending party.
Title Not Determinative In Division
The status as title-holder bears no relationship to the nature of property as marital or non-marital. The timing of the acquisition is what is critical. Sometimes a couple will elect to have just one spouse apply for a mortgage or vehicle loan. That, however, does not create a non-marital interest.
Contact our expert divorce and property division attorneys in Minnesota today for a consultation.