Q:        What property is subject to division and how is it divided?
 

A:        Two basic types of property exists in actions for dissolution of marriage and annulments, marital and non-marital.  Marital property is real and personal property acquired by the parties during the time of the marriage.  Non-marital property is real or personal property acquired by either party before, during or after the marriage that is a gift by a third party to one spouse but not the other, was acquired before the marriage, was acquired after the date of valuation, is excluded by a valid antenuptial contract, or was acquired for or is an increase in value of one of the above described types.

In Minnesota courts make just and equitable divisions of the marital property of the parties and do not consider marital misconduct.  Just and equitable does not necessarily mean that the property must be divided equally.   Non-marital property is typically not part of a division unless the party claiming the non-marital property cannot show a proof of the its non-marital status or if an unfair hardship can be shown.

Q:        Is my business subject to a division?
 

A:        Yes, courts are obligated to divide assets, including business interests including closely held corporations, partnerships, and sole proprietorship, in a just and equitable manner.  Valuation of the assets is key.

For closely-held corporations, courts recognize that determining the value of many is difficult.  In many cases courts will employ a book value of valuation, a capitalization of earnings approach, a dividend paying approach or liquidation value approach.

For partnerships, Minnesota courts will often take the fair market value of the partnership’s assets, both real and personal and deduct the liabilities.  Finally, the percent of the partner’s interest is determined to aid in the division.  Part of the problem in determining an accurate value are the other issues like work in progress, appreciation of tangible property, good will and cash on hand.  Great care must be taken to accurately determine how these factors affect the value of partnerships.

Q:        Can I keep my home?
 

A:        Generally, the custodial parent is awarded the homestead of the parties.  In all cases courts have the authority to order sale, grant a lien, or by some other method divide the property.