Division of marital property is one of the most infamously difficult parts of a divorce, at least if you go by what you see on television. Spouses will fight tooth and nail over who gets to keep this sofa, or that lamp, or this commemorative Beatles dinner plate. Some states allow courts to consider fault-based factors when dividing up marital property. One might argue that this creates an incentive for nasty fights over property. Minnesota’s family laws try to make it easier on everybody by excluding fault as a basis for property decisions. Instead, state law presumes that both spouses contributed to the creation and maintenance of the marital estate, although it does not assume they contributed equally. State law also places obligations on the spouses with regard to marital property.
Under Minnesota law, neither spouse may sell or otherwise transfer marital property in anticipation of or during the divorce without the other spouse’s permission. If a court finds that one spouse concealed or disposed of property in this manner, it can adjust the property division to compensate the other spouse.
Section 518.58(1) of the Minnesota Statutes provides that courts “shall make a just and equitable division of the marital property” in divorce cases. Legislators choose their words carefully, because they know that lawyers will pick over every word in a statute to look for every possible meaning that might help a client. Several words in the quoted text are likely to be familiar to any lawyer. The word “shall,” for example, suggests that courts do not have much discretion over whatever comes next. “Just and equitable” essentially mean “fair.” The word “equitable” does not — and let me be clear about this — mean “equal.”
As soon as the statute establishes a court’s obligation to divide marital property fairly, it adds the caveat that the court must do this “without regard to marital misconduct.” Awarding property to one spouse or another, in other words, cannot be a punishment against either spouse for wrongdoing in the marriage. So what, then, should a court consider when deciding what is “fair”? Section 518.58(1) has some suggestions, including:
As mentioned earlier, state law directs courts to presume that “each spouse made a substantial contribution” to the value of the marital property. The question is then whether any factors exist that would weigh in favor of an unequal division of property. The next part of § 518.58 offers one possible factor.
According to § 518.58(1a), each spouse owes a fiduciary duty to the other spouse to maintain and preserve marital property during preparation for a divorce, and while the divorce is pending. This means they have a duty to act in a way that will benefit their spouse, even if they might have a better opportunity for themselves. It is the same kind of duty that attorneys owe to their clients and that corporate directors and officers owe to their corporations. Courts take breaches of a fiduciary duty very seriously.
The parties to a divorce may not dispose of marital property, such as by selling an asset or emptying a bank account, unless the other spouse consents, or it is “in the usual course of business or for the necessities of life.” The spouse who alleges unauthorized disposal or dissipation by the other spouse has the burden of providing proof in court.
If a court determines that one spouse disposed of marital property without the other spouse’s permission, either at a time when they anticipated a divorce happening soon, or once the case was filed, the court can compensate the other spouse. Courts usually achieve this by adjusting the division of the remaining marital property, but state law gives them some other options as well.
Decisions from the Minnesota Court of Appeals from the past couple of years illustrate various aspects of how courts handle claims of concealed or mishandled marital property:
Family law attorney Anthony Toepfer practices in St. Cloud, Minnesota. He represents people during profoundly difficult times in their lives. He advocates for his clients both in and out of the courtroom in cases involving divorce, disputes over property division, and other family law matters. As a client at Toepfer at Law, you will always have access to the most up-to-date information about your case, and we are always available if you have questions or concerns. Please contact us through our website, or give us a call at (320) 497-4416 today to schedule a confidential consultation to discuss your case.
© 2020 Toepfer at Law