Minnesota Divorce Start Your Divorce Find Professionals Minnesota Articles Divorce Facts Divorce Grounds Residency Divorce Laws Property Division Alimony Child Custody Child Support Divorce Forms Grandparent Rights Forum Minnesota Products Divorce by County
Valuing & Dividing the Marital Estate
Marital property laws in Minnesota and Wisconsin define the marital estate (community property) as any asset acquired during the marriage whether that asset is held in the name of either party or both. This specifically includes real estate, cars, pensions, 401K plans, business interests, stocks, bonds, stock options, dogs, cats, chairs, collectibles and bank accounts etc. Property that does not have to be divided in divorce is called "non-marital property." Non-marital assets are generally defined as anything acquired by a spouse before the marriage, or during the marriage by gift, devise or bequest.
Valuing the Marital Estate
In most cases, the marital estate is divided equally unless there is written and binding pre-nuptial agreement to the contrary. To divide the marital estate, it is first necessary to determine the equity of the assets. The equity is determined by arriving at a fair market value (how much would a buyer be willing to pay) and subtracting out any secured encumbrances. For example the equity in a home could be determined by taking an appraised value and subtracting out the secured mortgage, second mortgage, secured lines or credit, home equity loans and outstanding property taxes.
Valuing assets may require the aid of an appraiser. To reduce costs, it is often most effective for the parties to jointly choose an appraiser and divide that expense. Appraisers are available to value real estate, vehicles, business interests, collectibles and other assets. You may wish to review our list of professionals to find an appraiser in your area. There are also a number of resources listed at the right to help you value cars, boats and motorcycles.
Dividing the Marital Estate
Once you have determined the relative values and encumbrances of the assets, they can be divided by creating a spreadsheet (See Chart A below). he equity of any asset awarded to a party is offset by the payment of any debt obligation by the party to ideally arrive at an equal property division. In this fashion, it is not necessary to divide each asset equally. It is only necessary that each party receives a substantially equal share of the marital estate. Ideally, the division of assets and debts will result in totals that are equal. When that does not occur, such as in the chart below, one spouse may be required to make a cash payment to equalize the division of assets. Often this is accomplished with the party awarded the homestead refinancing the mortgage in an amount sufficient to retire the other spouse’s interest. In the example below, wife could refinance to pay the husband the sum of $6,500 (one half of the difference between the values awarded to the wife and the husband.)
Not All Assets Are Created Equal
It is important to recognize in dividing property that not all property is created equal. You must always consider the tax effect of the asset award. For example, one stock account with a value of $15,000 may not be equal to another stock account with the value of $15,000. If the first account started out with a value of $5,000, when the account is liquidated (the stock is sold) the owner would be required to pay taxes on the increase in value. In this example, the gain is $10,000. This is called a capital gains tax. By contrast, if the stock in the second account was purchased for $20,000 and the value dropped to $15,000, upon liquidation, the owner could write off a $5,000 loss on taxes. As a result, there is a greater benefit to receiving the account that performed poorly since the recipient would not only receive the value of the stock but a tax write off as well.
When custody is in dispute, a Minnesota court issues a custody order that is in the "best interests of the child." Joint custody will only be awarded if parents have shown the court that they are willing and able to cooperate. A court also examines several factors with the child's welfare in mind. They include (1) the child's preference, (2) each parent's health, (3) the child's health and whether any special needs exist, (4) each parent's relationship with the child, (5) which parent has been the child's primary caretaker, (6) each parent's ability to provide a stable environment for the child, (7) any history of domestic violence or child abuse and (8) any allegations of abuse.
Easily Connect With a Lawyer or Mediator
Have Divorce Professionals from Your Area Contact You!
|Your Right to Child Custody, Visitation & Support
Cover Price: $
Your Price: $17.95
You Save: $7.00
"A Plain English Guide to Protecting Your Children"
Author: Mary L. Boland, Attorney at Law
|The information contained on this page is not to be considered legal advice. This website is not a substitute for a lawyer and a lawyer should always be consulted in regards to any legal matters. Divorce Source, Inc. is also not a referral service and does not endorse or recommend any third party individuals, companies, and/or services. Divorce Source, Inc. has made no judgment as to the qualifications, expertise or credentials of any participating professionals. Read our Terms & Conditions.|