Can You Resolve Your Minnesota Divorce Property Division Yourself?

When it comes time to separate, married couples often have trouble dividing “mine” from “yours”. Find out how Minnesota divorce property division works, and how you can avoid heading to court to fight over your assets.

In this blog post I will discuss the laws related to Minnesota divorce property division. I will explain what you can do to resolve the division of your family’s assets yourself with the help of a mediator. And I will explain might happen if you go to court and let the judge decide.

Dividing Marital Property: How Minnesota Law Works

Before you can resolve the division of your property, you need to know what the court will expect and what your judge may be willing to sign off on. Minnesota law says that in a divorce, the court will divide any marital property and debts accumulated by either party over the course of the marriage. The value of this property is divided “fairly and equitably”. Most of the time that means the marital property will be divided on a nearly 50/50 basis.

Carving Out Non-Marital Gifts, Inheritances, and Pre-Marital Property

Before you get to dividing your marital property, you need to know what is, and isn’t, included in that category. Minnesota law awards 100% of certain property to the person who earned it, or it was given to. This includes:

• Gifts to one spouse (other than those from the other spouse)
• Inheritances by one spouse
• Property (including houses and real estate) owned prior to the marriage
• Trade-ins for property owned prior to the marriage
• Retirement accounts accumulated prior to the marriage

Sometimes, a home or retirement account is “partially marital”. Here are two examples:

Increasing Equity in Non-Marital Property

A wife had a home and a mortgage in her name only before the marriage. At the time of the marriage, she had a net home equity of about $75,000. She continued to pay off the mortgage during the marriage, increasing the home equity by $100,000. Then, 10 years into the marriage the parties decided to renovate, spending $20,000 on a new kitchen that increases the value of the home by $30,000. When husband and wife separated a year later, the home is worth $300,000.

Minnesota law would treat the home as “partially marital.” The $75,000 of equity that the wife brought into the marriage may be 100% her own property. But the $100,000 increase in equity during the marriage and the $30,000 improvement in value are often treated as marital property to be divided. And this can all be affected differently if the home value decreased during the marriage.

“Passive Appreciation” of Non-Marital Assets

A husband had begun contributing to a 401(k) retirement account before the marriage. At the time of the marriage it was worth $25,000. He then continue to make contributions during the marriage. Market investments also increased the value of the account. At the time the parties separated it was worth $100,000.

Just like in the case of the home, the first $25,000 will likely be awarded to the husband as non-marital property. The contributions made during the marriage will be divided between the parties. However, the market effects on the investment will need to be allocated between the marital and non-marital portions. This can sometimes be difficult because investment options available at one price point may not have been available without the marital contributions.

Resolving Your Minnesota Divorce Property Division Outside of Court

Minnesota judges generally want to see that your balance sheet -- including marital assets and debts -- works out “fairly and equitably”. In other words, the columns for each spouse should be close to balancing. But how you get there can be up to you. If you and your spouse agree to mediate your Minnesota divorce property division, you can negotiate how the property is divided and protect both parties interests.

Tips for Mediating Property Divisions

A successful property division mediation can save you time, money, and aggravation. It can also ensure that each person’s priorities are respected and needs met. There are several things you can do to make your mediation more likely to succeed.

Gather Your Information Ahead of Time

The more both parties understand about the values of marital and non-marital property, the easier the negotiation will be. Do your homework and share your answers. Depending on the property involved in your case that may include:

• Researching the Kelley Blue Book value of vehicles
• Pulling the most recent statements of bank accounts and credit cards
• Establishing the values of retirement and investment accounts at the time of the marriage
• Hiring an appraiser or real estate agent to estimate the value of homes and real property
• Getting an estimate on the value of collections

Minnesota divorce property division is at least partially a math problem. The more variables you can define before the day of mediation, the more likely you are to walk away with a solution.

Identify Needs and Priorities

One of the best ways to prepare for mediation is to lay out your needs and priorities. This is just as true for property division as it is for custody or spousal support issues. Ask yourself, if you only got to walk away with one thing, what would it be? Then do it again. Create a list of your top priorities and take the time to ask why those are the most important things. Sometimes it isn’t the money value that makes something important.

Check Your Emotions

Divorce is hard. Emotions often cloud parties judgment and get in the way of reaching a resolution. If you find yourself getting emotional during the mediation, ask for a break. You are entitled to your emotions, but continuing to negotiate while in that condition can push you further from resolution. Better to stop for 5 minutes, an hour, or even overnight, and come back to the table with a clear head.

Be Open to New Possibilities

Remember that your mediator has been through this process before. She may have ideas to resolve your property division that you haven’t thought of. In the course of mediation, an option may present itself that is acceptable, or even better than what you thought going in. Be open to these possibilities and consider each proposal for its own merits, not how it measures against your expectations.

Mediation is a great way to resolve your Minnesota divorce property distribution without having to go through trial. But it only works if both parties come to the table ready to work toward resolution. Understand how the law works and then work together with your mediator to find a distribution that speaks to your priorities and your spouse’s needs. By doing so, you’ll protect your privacy, you dignity, and your pocket book.

Kimberly is an experienced mediator with a successful record in reaching positive solutions for families. She can use facilitated mediation techniques to help you and your partner, spouse, or co-parent resolve your family disputes outside the courtroom. If you would like to learn more about facilitated mediation, please contact Kimberly.