Classifying and Dividing Marital Property During a Brainerd Divorce

Like most jurisdictions, Minnesota is an equitable division state. Usually, but not always, “equitable” is synonymous with “equal” in this context.

There are a number of situations in which an unequal division is a just and right outcome, at least arguably. Sometimes, one spouse could have a disability which prevents him/her from becoming self-sufficient. Much more often, wife might want to stay in the house with the kids. Judges usually prefer this outcome if possible. But that outcome is clearly not in husband’s best interests, because he loses his share of the home equity.

Dividing marital property can be a tricky proposition in Brainerd. But before we even reach that issue, there is an important preliminary question to consider.

Is It Marital or Nonmarital Property?

The general rule is that property acquired before the marriage or by gift is nonmarital property; anything else is marital property. That seems fairly straightforward, but let’s see how it works in practice.

Before Ben and Jennifer got married, Ben owned a small rental house. It needed some work and did not have a tenant. Jennifer offered to use a wedding gift from her parents to fix up the house. Ben readily agreed. Before long, a tenant moved in and began paying $2,000 a month. The tenant was quite happy, but Ben and Jennifer soon had a falling out.

Ben owned the house before the marriage, so that makes it nonmarital property, right? Well, maybe. The answer basically depends on how much work the house needed and how big Jennifer’s gift was.

If the house was completely delipidated and Jennifer’s extremely generous gift fixed the foundation and replaced the roof, a Crow Wing County judge might conclude that the property was transmuted. In other words, the gift transformed the rent house from nonmarital into marital property. On the other hand, if Jennifer’s gift just paid for new paint and new carpets, a judge might determine that Jennifer is only entitled to reimbursement for that gift. If Jennifer’s gift just paid for new light fixtures and a few air fresheners, she might not even get reimbursement.

There’s more. The increase from marital property is also marital property. So, if Jennifer’s gift transmuted the house, Ben could owe Jennifer half the prior rents, which would be her share of the marital property.

Some Key Property Division Factors in Brainerd

Once marital property is properly classified, it must then be divided on an equitable basis. Minnesota law sets out a number of factors to consider. Some primary ones include:

  • Agreements Between the Parties: To avoid messes like the one engulfing Ben and Jennifer, many spouses use premarital or post-marital property agreements. Such agreements can spell out who is entitled to what in the event of a divorce. Brainerd judges almost always enforce these agreements, even if they weren’t 100 percent voluntary and are manifestly one-sided.
  • Contributions to the Marriage: This factor includes both economic and noneconomic contributions. If Ben spent long hours at that rental house making repairs and so on, his noneconomic contributions count just as much as Jennifer’s economic contribution. The same thing applies to a housewife who gives up a career to be the primary caregiver for minor children.
  • Custody Arrangements: This factor goes along with contributions to the marriage. In the above example, Wife probably gets to stay in the house with the kids. We’ll address the issue of Husband’s equity in a moment.
  • Future Income: Statistically, divorced men rebuild wealth much faster than divorced women. If there is evidence in the case that supports that conclusion, an unequal division might be appropriate.

The property division may not happen at the time of divorce. Let’s return to the husband/wife example above. If Wife wants to stay in the house with the children, Husband may receive a lien for his share of the equity. Later, when Wife sells the house, she must pay the lien out of the sales proceeds.

Resolving Disputes

Property division can be a very messy affair, and the disputes can be equally as messy. So, most Brainerd judges refer these matters to mediation. In Crow Wing County, mediation is at least partially successful about 70 percent of the time. If the parties cannot work out all their disputes, they can at least narrow the issues before trial.

Mediation usually works because it saves the litigants a lot of money. Mediation also gives the parties more control over the outcome. That’s an extra big plus if one spouse has problems accepting authority. Moreover, voluntary compliance with mediated property settlements is usually higher than it is with court-ordered resolutions.

CALL TODAY TO SPEAK WITH A BRAINERD DIVORCE LAWYER AT CARLSON & JONES

Divorce property division may not be as easy as it seems. For a free consultation with an experienced Brainerd Divorce Lawyer, contact Carlson & Jones, P.A. We routinely handle cases in Crow Wing County and nearby jurisdictions.

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