Asset Division in a Divorce 

Minnesota Divorce Law & Family Law Attorneys

When spouses decide that they are going to get divorced, there are some key financial decisions that need to be made.  Minnesota divorce law states that each spouse is entitled to half of the marital property.  Since the laws on splitting the items are fairly straightforward, there are cases where there is disagreement on whether something is marital property or separate property.  Let’s examine those terms and how they affect asset division in a divorce.

What is Marital Property? 

Marital property is a term that is used to differentiate between the things you owned before vs. during the marriage.   So we have separate property and marital property.   Each spouse typically keeps their own separate property, and then marital property is divided as evenly as possible between the two.  

What is Separate Property? 

Where marital property refers to the money you made or the assets you collected DURING the marriage, separate property refers to the assets, money or other items of value you had PREVIOUS to the marriage.   

Is a House Marital or Separate Property?   Or Both?  

There are cases where a house can be both marital and separate property.  For example, let’s say Jane and Bob are married.  Jane owned the house when they got married, and Bob moved in.   Since then the house has increased in value both because the housing market has gone up, and because Jane and Bob made some improvements to the house which increased the home’s value.  In this case the value of the home before the marriage would be separate property, but the value gained DURING the marriage would be classified as marital property.  

Who Keeps the House After a Divorce

The most complicated asset to divide for divorcing couples is typically the shared family home.  There are a lot of implications that come with the house – ie, who will pay the mortgage, be responsible for the upkeep, etc.   Also, if your divorce involves minor children under the age of 18 it’s very likely that they will want to stay in the house.  

Selling the Home During / After a Divorce

One solution to the home is obviously to sell it.  Then instead of dealing with a very complicated asset you are dealing with liquid cash.  It doesn’t require a lot of conversation or negotiation to divide money.  

Refinancing the Home – Buying Out Your Ex-Spouse

Another solution that can create some liquid cash but does NOT require the sale of the home is to refinance.  This option would be great if one spouse would like to keep the house and is able to pay for it.  They can refinance to get a chunk of money to compensate the spouse who is leaving the home. 

Sharing the Home – “Birdnesting” Custody Arrangement

One option for divorcing spouses who would like to keep their kids in the family home but NOT live together is called bird-nesting.   Basically each parent has their own apartment that they live at when they are NOT with the kids.  That way the kids do NOT go back and forth, instead the parents do.