Is Minnesota a Community Property State or Equitable Distribution State?
Minnesota is not a community property state. In Minnesota, the court will make an “equitable distribution” of all marital assets and debts. Having a firm understanding of what is meant by equitable distribution in MN and how it applies to you can help you obtain a firmer grasp on how your divorce case is likely to proceed.
The end of a marriage means that the parties will have to divide up all assets and debts that have been accumulated during the marriage. Retirement accounts, credit card debts, the marital home, and personal property are just a few examples of the things that will have to be considered and distributed.
Minnesota statute 518.58 states that, upon the dissolution of a marriage, a court will make a “just and equitable division” of all marital property, “without regard to marital misconduct.” This means that, rather than Minnesota being a community property state, it is instead an equitable distribution state.
The statute goes on to list a number of factors for the court to consider, including:
- The length of the marriage
- The age and health of each party
- The employability of each party
- The income of each party
The statute also specifically requires the court to examine each party’s contribution to the marital estate and also the contribution of one or both parties as a homemaker. This all means that the court will ignore either party’s contribution to the disintegration of the marital relationship and instead will consider the contribution each party makes to the marital estate.
The statute also specifically provides for consideration of a party’s non-monetary contributions in the form of being a stay-at-home spouse or parent.
Why the Timing of the Valuation of Marital Property Is Important
The timing of the valuation of the marital estate is also important to understand. The statute states that the value of the marital assets shall be made “as of the day of the initially scheduled prehearing settlement conference.” This can have a significant impact on the marital assets to be divided if the parties have separated long before they actually file for divorce.
An essential concept for divorce litigants to understand is that equitable distribution does not always mean the parties will both end up with an equal share of the marital property. Remember, Minnesota is not a community property state. Unlike community property states where both spouses leave with an exact equal portion of the marital estate, the goal of an equitable distribution in divorce is a fair apportionment, not necessarily an exactly equal one.