Divorce isn’t simply the process of ending a marriage. It also encompasses resolving the issues that must be determined before the final decree can be entered, including dividing property. But unlike many people might mistakenly believe, not all property is subject to division in divorce. Non-marital assets typically remain the separate property of the spouse who first acquired them. If you are parting ways with your spouse, it’s important to understand what assets are included in the marital estate and divisible in divorce.

Key Takeaways

• Property is classified as either marital property or non-marital property in a Minnesota divorce. Only marital property is subject to division.
• Couples can use a valid prenuptial or postnuptial agreement to determine for themselves how they wish their assets to be classified in the event of divorce, and override Minnesota law.
• Mediation and the collaborative divorce process can provide spouses with the option to negotiate property division and find customized solutions that might not be available in the courtroom.

What’s the Difference Between Marital and Non-Marital Assets?

In a Minnesota divorce, property generally falls into two categories: marital assets and non-marital assets. Marital assets are defined as any property acquired during the course of the marriage, regardless of which spouse’s name the asset is titled in. Non-marital assets are those that were acquired by either spouse prior to the marriage or as a gift or inheritance to one person during the marriage. Minnesota law presumes that all property is marital, unless a spouse can establish a non-marital property claim.

Property characterization can become more complex when marital and non-marital assets are “commingled.” In such cases, property must be traceable in order to demonstrate that a separate asset still exists.

What Are Considered Non-Marital Assets in Divorce?

There are certain exceptions to what Minnesota law characterizes as marital assets. In some cases, property acquired during the marriage may be treated as a non-marital asset. In addition to property owned by either spouse prior to marriage, the following property is typically classified as separate property during divorce:

• Inheritances: An inheritance bequeathed to one spouse is considered non-marital property. However, if the inheritance was bequeathed to both spouses or commingled with marital assets, it may be subject to division in divorce.
• Personal injury awards: The pain and suffering portion of a personal injury award to the injured spouse would be classified as a non-marital asset. However, if the economic loss portion of the award compensates for medical bills, lost income, or other expenses paid by the couple, it may be deemed marital property.
• Gifts given to one spouse: Generally, gifts given to one spouse during the marriage are the separate property of that spouse. However, if the gift was given to the couple, it would be considered a marital asset.
• Any passive increase in value of separate property: If property was acquired by either spouse prior to the marriage, any passive increase in its value would be considered separate property. In the event the appreciation was due to the active efforts of the other spouse, the increase in value would likely be considered marital property.

Critically, couples may exclude assets from the marital estate by entering into their own agreement. Since property classification can be complex, it’s crucial to have a knowledgeable attorney by your side to ensure each asset is characterized correctly and your rights are adequately protected in divorce.

Can Marital Assets Ever Be Characterized as Non-Marital Assets?

A couple may choose to characterize assets that would otherwise be considered part of the marital estate as non-marital assets by executing a valid prenuptial or postnuptial agreement. While a prenup is entered into by the couple prior to marriage, a postnup can be signed at any point during the course of the marriage. These agreements can specify that existing property, future acquisitions, income, or appreciation should be treated as separate property in divorce, and override how they would be classified under Minnesota law. The agreement can also protect inheritances, gifts, businesses, and real estate by ensuring they are classified as separate property, regardless of when they were acquired, as well as avoid the complexities that can arise due to commingling.

Alternatively, a couple also has the option to choose how their property will be characterized in divorce by using mediation or the collaborative divorce process. These forms of alternative dispute resolution allow spouses to find creative solutions and create customized agreements that might not be available in court. Rather than let a judge decide how their property would be divided, spouses can negotiate an agreement based on what they feel is equitable, rather than allow the outcome to be dictated by state law. By promoting cooperation, respectful communication, and mutual understanding, these processes can also help ensure conflict is kept at a minimum and spouses can part ways cost-effectively.

Contact an Experienced Minnesota Property Division Attorney

If you are facing a dispute concerning property division in divorce, it’s vital to have an experienced divorce attorney by your side who can best advise you and ensure your interests are safeguarded and you make informed decisions. At The Law Shop Minnesota, attorneys Louise Livesay and Peter Ladwein help clients across Minnesota with resolving their divorce and family law matters with respect, clarity, and compassion. They can also assess whether your case is appropriate for mediation, the collaborative process, or another form of alternative dispute resolution.

To schedule a consultation at either our St. Paul or Edina offices (either in person or via Zoom, anywhere in Minnesota) please contact us online or call (651) 344-6100 for convenient, accessible legal support.

Louise Livesay and Peter Ladwein share a commitment to helping families find peaceful, practical solutions during difficult times. Together, they bring compassion, experience, and a personal touch to every case they handle.

With more than twenty years of experience, Louise has guided countless families in the Twin Cities and across Minnesota toward out-of-court resolutions through collaborative divorce, mediation, and other flexible, client-centered options. Peter shares that same dedication to protecting families and their futures. Having firsthand experience with a special needs family member, he brings a deep understanding and empathy to his work. Licensed in both Minnesota and Illinois, Peter helps clients navigate the legal process with care and clarity.

Louise and Peter work together to ensure every client feels supported, informed, and confident in moving forward toward a positive resolution.