Written By: Associate Attorney, Micaela Wattenbarger
One of the more confusing issues in family law is how property is divided upon divorce. In Minnesota, property is divided “equitably”, which is not the same as “equally”, though they often have a similar result. What makes property division particularly complicated is that some items are considered “nonmarital” and are not subject to division. A spouse’s nonmarital property belongs only to that spouse and will not go into the marital pot to be divided. A court will not award a spouse the nonmarital property of the other spouse unless he or she can show that it is necessary because of some unfair hardship, but this is extremely rare.
The two most common types of nonmarital property are (1) property acquired as a gift or inheritance made by a third party to one but not to the other spouse and (2) property acquired by one spouse before the marriage. Property acquired in exchange for nonmarital property is also nonmarital. For example, if my dad gifts me $2,000 for my birthday this year, and I use that $2,000 to buy a nice TV, the TV is my nonmarital property.
Property is presumed to be marital, so a party claiming that something is nonmarital has the burden of demonstrating that, or “tracing” the nonmarital nature of the property. It becomes difficult to “trace” the nonmarital property if, for instance, nonmarital money is deposited into a joint account and becomes commingled with marital money.
Property can also be both marital and nonmarital. For instance, a spouse may have purchased real estate prior to the marriage but continued paying the mortgage during the marriage. Or, perhaps a spouse began making contributions to a retirement account prior to the marriage but continued making contributions during the marriage. In each case, the asset is both marital and nonmarital. The court or financial evaluator will have to determine what portion of the current value should be considered nonmarital and what portion should go into the marital pot for division. To further complicate matters, income and appreciation of non-marital property are treated differently. Any increase in value of nonmarital property is still nonmarital but any income earned from nonmarital property during the marriage is marital.
As you can see, property division can be extremely complicated and it takes a highly knowledgeable attorney to understand the ins and outs of such complex financial matters. At Arnold, Rodman & Kretchmer PLLC we understand that property division can be stressful and complex but our attorneys have the experience and knowledge to guide you through every step of the way. Give us a call at (952) 955-8008!