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Hutchinson Family Law Attorneys and Property Classification

by | Dec 10, 2018 | Divorce, Firm News, Hutchinson

Minnesota family law mandates a property division which is not an unfair financial burden on either party. Divorce almost always constitutes a serious financial burden, but neither the husband nor the wife can carry too much of the load. Unless the parties have a premarital agreement, the classification and division process can be rather long and cumbersome.

A relatively even distribution of marital assets and debts is complex enough. Many assets, such as retirement accounts and houses, have emotional values in addition to their financial values. If the parties have been married for more than a few years, the division is even more intricate. In fact, Hutchinson family law attorneys must address a threshold issue before they even begin splitting up the marital estate.

Is the Property Distribution Always 50-50?

There is a strong presumption in favor of a 50-50 division. However, it’s only a presumption. To overcome it, the challenging party must normally present substantial evidence of inequity.

Unequal property distribution questions are ripe for mediation. Indeed, many McLeod County judges order parties to complete mediation before they set the case for trial. At mediation, the parties exchange settlement offers and counter-offers until they reach an agreed resolution.

Classifying Marital Property in a Minnesota Divorce

Equitable divisions are quite challenging in many cases. Long marriages often involve ownership issues, specifically with regard to commingled property. Assume Wife bought a new car the day before her wedding. Over the course of the marriage, she pays a total of $45,000 on the vehicle note ($750 a month for sixty months). She uses money from her paycheck, which is marital property, to pay the car loan, which is a non-marital debt.

If she and her husband divorce, Husband may be entitled to $22,500. That sum represents his share of the marital funds Wife spent in satisfaction of her non-marital debt. The actual division may vary based on a number of factors. Some of these factors are outlined below.

Resolving commingled property issues with regard to debts is often a fairly straightforward process. It may just be a matter of doing the math. However, if the comingling involved a revenue-producing asset, things are much more complex.

Now assume Wife purchased a rental house while she was single. Husband received a wedding gift from his parents, and he uses the gift to find improvements at the rent house. If the couple divorces, one of two things could happen:

  • If the gift was a small one which funded things like new carpet or new landscaping, Husband’s gift might have little or no effect on property ownership. The house, and all income it produced, would still belong exclusively to Wife.
  • On the other hand, if Husband’s large cash infusion funded major improvements, like foundation work, a McLeod County family law judge could declare that Husband’s gift transmuted the property from Wife’s nonmarital asset to a marital asset. If that’s the case, Husband would be entitled to half the house and also half the income from the house, beginning at the transmutation date. Husband’s argument for transmutation is stronger if the house was uninhabitable prior to the improvements.

In these situations, Hutchinson family law attorneys often partner with financial professionals who trace payments and perform a forensic accounting.

Hutchinson Family Law Attorneys and the Property Division Process

After clarifying ownership interests, the real work begins. The property division process usually involves the factors set forth in Minnesota law. Technically, all these factors have roughly equal weight. But pragmatically, some are more important than others.

  • Agreements Between the Parties: Minnesota family law judges almost always approve premarital agreements if they were voluntary and not entirely one-sided. So, especially with regards to complex issues like the aforementioned rent house, a premarital agreement can be the stitch in time that saves nine.
  • Noneconomic Contributions to the Marriage: Some relationships feature a “caregiver” spouse and a “breadwinner” spouse. If the caregiver spouse forsook carrer advancement to look after multiple children, the caregiver spouse may be entitled to a disproportionate share of marital property. In the alternative, the caregiver might receive additional alimony payments.
  • Future Economic Prospects: In general, young and healthy people can earn more money than old and sickly people. Therefore, if there is a significant age and health discrepancy between the spouses, this factor might be a consideration.

Almost all property divisions are subject to modification later. For example, if Husband remarried and began receiving substantial financial support from his new wife, a Hutchinson family law attorney could convince a court to reconsider the rent house ownership question.

Count on Experienced Lawyers

Property classification and division is often the most time-consuming portion of a divorce case. For a freeconsultationn with an experienced Hutchinson family law attorney, contact Carlson & Jones, P.A. We routinely handle matters in McLeod County and nearby jurisdictions.