Minnesota courts are required to equitably divide marital property. The term “equitably” does not mean equally, and though the division of marital property is generally done equally, at times there are circumstances that would make an equal division unfair.
Whether property is marital or nonmarital is a question of law. All property, real or personal, acquired during a marriage is presumed to be marital property. This presumption is overcome by showing that property is nonmarital, meaning any real or personal property, acquired by either spouse before, during, or after the existence of their marriage, which is acquired before the marriage or is acquired in exchange for or is the increase in value of property acquired before marriage. Nonmarital property includes property that is acquired as a gift, bequest, devise or inheritance made by a third party to one but not to the other spouse. For nonmarital property to maintain its nonmarital status, it must either be kept separate from marital property or, if commingled with marital property, be readily traceable.
The present value of a nonmarital asset used in the acquisition of marital property is the proportion the net equity or contribution at the time of the acquisition bore to the value of the property at the time of purchase multiplied by the value of the property at the time of separation. The remainder of the equity increase is characterized as marital property.
Except for a proportion of appreciation that is determined exclusively by considering an identified nonmarital investment, any other appreciation is subject to the legal presumption that property acquired after marriage is marital property. Accordingly, the legal formula should be used to apportion an increase in the property’s value only if that property has an identified nonmarital component.
If necessary, it is possible to trace a current asset to a nonmarital source. To claim a nonmarital interest in a current asset, a party must show by a preponderance of the evidence that the asset was acquired in exchange for nonmarital property. Nonmarital assets commingled with marital asset may lose its nonmarital status if it cannot be traced to nonmarital source.
In short, if you are in the process of divorce, it is important to understand the difference between marital and nonmarital property in Minnesota. If you believe that some of your property might be non-marital, you will be required to provide the proof.