Property Division FAQ
One common source of disputes and extended litigation in Marriage Dissolution proceedings is how to divide the parties’ real estate and personal property. While the principles are relatively simple, in application they are extremely complex.
In Minnesota, ‘marital” property is defined as property acquired during the marriage that is not “nonmarital” property. It is presumed that property acquired during the marriage is marital and the burden of proof is on the party who disputes that characterization. The legislature has directed the court to “divide marital property in a just and equitable fashion,” which is often interpreted to mean equally.
Nonmarital property is property that either party brought into the marriage, property that was inherited by one of the parties during the marriage, property that was given to one party, but not both, during the marriage, or the “fruits” of those categories of nonmarital assets. The general rule is that nonmarital property should go back to the person who brought it into the marriage, inherited it, or was the recipient of the gift.
Yes. for example, if one could establish an “unfair hardship,” the court is permitted to divide nonmarital property in that instance. Your experienced property division attorney can help you determine if there is an “unfair hardship” situation in your marriage. Another exception is the earnings of or income from nonmarital property can be considered “marital.” Moreover, there are some situations in which the increase in value of nonmarital property can be considered to be “marital” property. One of our experienced property division attorneys can advise you about when and how these exceptions apply.
It means that if you can establish the existence of a nonmarital asset and can trace that asset into an existing asset – even one that would be considered marital – the court may recognize and return a nonmarital component to a marital asset.
Disputes can arise in the valuation of assets, in the actual division of the asset, or both. For example, the determination of the current market value of a closely held family business, partnership, or corporation is a very complex issue that may well require a family law attorney to utilize the services of a Certified Public Accountant, a trained Business Valuator, or an Appraiser. Unusual assets, such as an expensive horse or a rare work of art, will also require appraisals by highly specialized appraisers.
Even where the asset has been appraised, there may well be very serious dispute about how to divide such an asset. You cannot cut works of art in two, and if parties cannot be married any longer, they are unlikely to be able to continue to be business partners.
No, not if the parties can agree among themselves on valuations. However, the reality is that neither you nor I could determine the actual current market value of our homes within a thousand dollars, yet that is twice the cost of actually getting a certified home appraisal. Important decisions are being made in the process of marriage dissolution settlements. it is important that you and your property division attorney have accurate information upon which to base those decisions.
Certainly. There are two basic kinds of assets from a tax standpoint: those upon which taxes have already been paid (cars, bank accounts, homestead, etc.) and those upon which no tax has yet been paid, that is they are “tax-sheltered.” Examples of these are retirement assets, such as IRAs, 401K plans, 403B accounts, defined benefit pension plans, and the like. A $10,000 IRA account is worth much less than a $10,000 Certificate of Deposit (“CD”). A tax and a penalty must be paid by most people to cash in their IRA account while the CD can be liquidated without any additional tax on the principle being due.
Yes, there are several kinds of such benefits and each may be treated slightly differently in terms of valuation and division. We have drawn a number of proposed Qualified Domestic Relations Orders (“QDROs”) with respect to IBM retirement plans for entry by the Court.
Again the answer is “Yes.” we have been involved in many such cases. Mayo Clinic benefits may not only be divided by the use of QDROs, but the Mayo Clinic’s present policy goes beyond a simple division, and in many instances includes the actual transfer of the “present cash value” of the sums represented by such divided accounts to the non-Mayo spouse into his or her own tax-sheltered account. You will want the benefit of an experienced property division attorney in Rochester to assist you in understanding how and when such divisions are accomplished.