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One of the most challenging aspects for a couple going through a divorce is deciding how to divide property. This is particularly true for spouses with sizable assets, such as a family-owned or closely-held business, a vacation home, investment properties, retirement plans, and other such assets. Under Minnesota law, assets that belong to the marital estate are generally divided equitably, which, at times, may mean 50/50. Through property division and spousal maintenance, judges will endeavor, to the extent possible, to strike a balance that enables both parties to maintain a similar lifestyle after the divorce. This article is intended to provide some degree of insight into the more complex issues that are involved in dividing assets in divorce.
Couples with substantial assets often have business interests that need to be taken into consideration. If it is a family-business or closely-held company, determining ownership can be a rather complex task. Even where one spouse was primarily responsible for running the business, it is generally deemed to be part of the marital estate and thus subject to equitable distribution. Assessing the value of a business is another often problematic area in any divorce, more so with high net worth clients or when multiple business entities are involved. At Mundahl Law, we draw on business appraisers and other financial experts to assist in providing an accurate assessment of the business’ worth. We are then able to assist our clients to weigh their options, which may include dividing the business; selling it and apportioning the proceeds; or awarding it to one spouse with the other spouse receiving payment for his or her share.
Real estate holdings together with business interests can represent the bulk of the marital estate for high net worth clients. A common challenge with property can be determining whether or not all or a portion of the real estate is non-marital. The court presumes that the property is marital and subject to equitable distribution. In determining whether property is non-marital, a judge will consider whether the property was acquired before r the marriage, or by gift from a third party, inheritance, or bequest. The party who believes that they have a non-marital interest has to provide the proof to the court to document their non-marital interest. Our experienced family law attorneys can assist you in determining the non-marital interests in real property and negotiate for you an equitable resolution.
For many high net worth clients, employment compensation packages often include deferred compensation, such as profit sharing or employee stock option plans. Any amount received by either spouse as part of a deferred compensation agreement during the marriage is generally considered to be part of the marital estate. Determining its value, however, can prove difficult, particularly when unvested stock options are involved.
For high wage earners going through divorce, valuing and dividing retirement benefits is another concern as the value of such benefits is generally quite sizable. Many people mistakenly believe that if these benefits are held in the name of one spouse, the other is not entitled to claim a share. In Minnesota retirement funds accumulated during the course of the marriage are considered marital property subject to equitable division between both spouses, regardless of which spouse holds the interest. Such retirement funds may include pensions, IRAs, SEPs, and 401(k) plans. These plans can be divided through the divorce process without early withdrawal fees. One of the tools used to divide these assets is a Qualified Domestic Relations Order or QDRO.
For individuals with substantial non-marital assets prior to marriage, the use of a pre-nuptial agreement can help to avoid many of the challenges and complications that are to be expected in a high asset divorce. A pre-nuptial agreement can help the couple to plan in advance how they want their assets to be divided if the marriage should end in divorce. A valid and well-considered pre-nuptial agreement can have a significant impact on the ultimate division of assets during a divorce and can often save the couple a great deal of time and money in the end.
At Mundahl Law, our Minnesota family law attorneys can help you to consider these and other options to help protect your financial, business, and proprietary interests. Our goal is to assist our clients to obtain a reasonable outcome.