Assets & Debts
The Division of Assets in Minnesota
Determining the distribution of marital property is done either by agreement or by court order. Ninety-eight percent of all divorces end in a stipulated decree which means the parties agreed on the distribution of assets and debts. However, human nature being what it is, most of the 98% do not reach agreement until they are within a couple of months, a couple of weeks, a few days and in some cases a few hours prior to the start of trial.
Agreements can be reached by the lawyers or through a popular form of alternative dispute resolution called mediation.
From Susan's interview for the Masters of Family Law series on ReelLawyers.com.
Minnesota law uses the concept called “equitable distribution” to divide the marital assets between the spouses. Equitable division is based on the principles of fairness. In Minnesota the division of assets does not need to be equal to be fair. However, it is generally true, that the marital assets are divided equally between the spouses.
It does not matter whether an asset is titled to one or both spouses. Assets held in the name of one spouse, e.g. a pension, are among the assets to be divided in a divorce.
There are marital assets and nonmarital assets. All assets owned by one or both of the spouses are considered to be marital property unless one of the spouses can prove that the asset is a nonmarital asset. The determination of whether an asset is marital or nonmarital is complex and an attorney should be consulted to determine if the burden of proving that the asset is nonmarital can be met.
Nonmarital assets include those assets that were acquired by one spouse before the marriage or in the form of gifts during the marriage. It can also be an asset excluded from the marital estate by a valid antenuptial agreement. A nonmarital asset can also include something that was gifted to a spouse during the marriage. However, gifts from one spouse to the other do not acquire a nonmarital status. Finally, a nonmarital asset can be something inherited, if the inheritance named only one of the spouses, not both.
We will work with you to develop a strategy for addressing the division of your marital property that will allow you to feel empowered, secure and confident in your legal representation.
The Division of Marital Debt in Minnesota
Any debt incurred during the marriage is considered a debt of the marriage. Typically, if a debt was incurred for an education that primarily benefits one party, not both, the debt is generally deemed to be the debt of the person in whose name the debt is held, e.g. law school education debt.
Debts that encumber an asset, e.g. a car loan, are typically assumed by the person who receives the asset. The debt is subtracted from the fair value of the asset to determine the equity value of the asset.
Debts that are not secured by an asset, e.g. credit card debt, are divided between the parties equitably. Accordingly, the division of debts does not have to be equal and parties can consider the relative income available to each of them in making a division of the debts.
Contact the Gallagher Law Office, L.L.C. to protect your interests during divorce.