What are Marital and Non-Marital Assets?

Man and woman talking about the division of non-marital and marital assets in divorce.

When a couple divorces, one of the most complex issues they may face concerns the division of marital assets. This can become even more complex when marital assets and non-marital assets are combined. Notably, when a court divides property applying the doctrine of equitable distribution, it doesn’t always result in an outcome a couple might think is fair. Spouses can use the collaborative divorce process or unbundled legal services to divide their property in a way that they think is just — without letting a judge determine the results.

What Are Marital Assets?

Marital assets are defined as those that are acquired during the course of the marriage, regardless of which spouse acquired it or whose name the title is in. This category of property is divided in divorce and subject to equitable division in Minnesota. Specifically, marital assets that are commonly divided in divorce can include both tangible and intangible property, such as:

  • Cash
  • Bank accounts
  • Retirement accounts
  • Businesses
  • Investments
  • Real estate (including the family home)
  • Vehicles
  • Artwork and jewelry

In addition, any debts acquired by either spouse during the time they were legally married is considered marital property that must be divided in divorce.

What Are Non-Marital Assets?

Minnesota law presumes that all property is marital unless a spouse can establish a non-marital property claim. Non-marital assets can include property that was acquired prior to the marriage by either spouse. These assets are typically not subject to division in divorce and remain with the original owner. However, there are also certain types of property that may be acquired during the marriage and considered non-marital assets.

Under Minnesota law, non-marital assets can generally include the following:

  • Assets acquired before the date of the marriage
  • Assets excluded from the marital estate through a prenuptial or postnuptial agreement
  • Personal injury settlements that compensate one spouse
  • Inheritance acquired by either party
  • Gifts given to one spouse
  • The passive increase in value of property that was acquired before the marriage

To prove that property is non-marital, it must remain separate from marital property throughout the marriage. Otherwise, if separate and marital assets were commingled, the property must be traceable. If a spouse can trace the separate asset to demonstrate that it still exists, they might still have a claim to it. In the event the funds were spent and do not exist any longer, a spouse would not have a viable claim to the property under Minnesota law.

Using the Collaborative Divorce Process to Divide Marital Assets

Establishing what constitutes non-marital assets versus marital assets can be one of the most difficult issues when a couple parts ways — especially in long-term marriages where commingling has occurred and decisions were made never understanding that this would be a future issue. Critically, the law is not necessarily fair on this. Many couples would likely have made different choices during the marriage if they understood how Minnesota law treats assets in divorce. By using the collaborative divorce process, spouses can make decisions about property division that they feel are equitable. It can allow them to end the relationship feeling good about the outcome, rather than let a judge who does not know them decide what will happen to their assets.

However, it’s important to understand that the law is only one factor in making decisions about how property should be divided. Values, facts, and how something feels to the person are other issues that should be considered when making decisions about property division — in addition to the law. The collaborative process is a place where spouses can talk about the sense of fairness they feel and find solutions that they are both comfortable with. And you can decide what level of tracing is needed to arrive at an agreement about these issues.

Using Unbundled Legal Services to Dividing Marital Property

If property division is one of the only issues that must be resolved in your divorce, unbundled legal services might be right for you. Also referred to as limited scope representation, with unbundled legal services, your attorney will only take on part a specific aspect of your case — rather than provide comprehensive representation for the duration of the entire divorce proceedings. This can allow you to have the guidance, insight, and counsel of a divorce attorney for your property division matter while reducing the costs of legal fees in your case.

When you use unbundled legal services for property division, an attorney can assist you with identifying marital versus non-marital assets, negotiating a settlement, researching legal issues that may arise, and drafting an agreement. All or any one of these are part of unbundled legal services. Significantly, limited scope representation can also give you flexibility and an opportunity to participate more in your case — and be more satisfied with the results.

Contact Divorce Attorney Louise Livesay

Property division in divorce can be complex and contentious and how you handle matters can shift it to being respectful and focused on problem-solving. Family attorney Louise Livesay has represented families in the Twin Cities area for divorces, property division matters, and family law disputes for over twenty years. She has dedicated her practice to helping clients resolve conflicts peacefully and respectfully. If you have questions about pre-divorce consultation, collaborative divorce law, divorce or family law mediation, or if you're interested in Our Unbundled Legal Services, we encourage you to contact us online for a consultation or by calling (651) 344-6100. We are available to meet in person or via Zoom, regardless of whether you are in Minnesota.