The end of a marriage means that the spouses will need to separate not only their lives, but their debts and assets. Although the majority of cases end with the parties reaching an agreement and entering into a settlement agreement regarding this division, this is not always the case. In the absence of an agreement, the trial judge will be forced to consider the parties’ property and make an equitable division, as per Minnesota statute. Parties to a divorce should note, however, that the trial judge must make an equitable division of the parties’ marital assets and debts. Each parties’ respective non-marital property is not subject to division in the divorce, and belongs wholly to the party who owns that asset. Accordingly, deciding what is non-marital property vs. what is marital property can become a central issue in a divorce case.
In general, any property or asset owned by each party before the marriage is non-marital property, while any asset acquired during the marriage is marital property. Property includes not only tangible assets such as furniture, vehicles, and real estate, but also less tangible assets such as pensions, stock options, bank accounts, and 401(k)s. Businesses started during the marriage would also be marital property, even if only one of the spouses worked for and at the business. An essential issue that is often misunderstood by divorce litigants is that the name on the title is not relevant to whether an asset is marital property. For example, if married parties purchased a house during the marriage but only one spouse’s name is on the title, the house is considered marital. Similarly, a retirement account that one spouse has been contributing to through work is not considered non-marital property simply because one party’s name is on the statement.
Like so many other areas of law, there are some essential exceptions to these rules. Some assets acquired during marriage are non-marital property. These assets may include an award for personal injury, a gift made only to one spouse from someone outside the marriage, or any asset that is excluded from being defined as marital property by a valid pre or post nuptial agreement. Moreover, an asset that was once considered non-marital property may become marital property if the asset is somehow mixed with marital property, through a process known as “commingling.”
Understanding marital asset division and what is marital property vs. non-marital property requires the assistance of an experienced attorney. Call us today at (320) 299-4249 for a consultation to discuss your marital estate.