In Minnesota, if a divorcing party is able to prove that property is that individual's "non-marital" property (i.e., was brought into the marriage or was a gift or inheritance to one but not both of the parties), that property is typically not subject to division in the divorce and will be awarded to the individual who proves the property is non-marital.
Minnesota Business Divorce Archives
Few events can set a business back as quickly as a divorce involving one if it owners. Whether the business is a farm, manufacturing company, medical or dental practice, or other professional practice or business, a divorce and efforts related to getting the parties and the business through the divorce can wreck substantial havoc to the business's bottom line, in addition to the health and emotional wellbeing of all involved.
When a Minnesota business divorce includes an ongoing business as an asset, there are many interesting and complex issues which need to be addressed. Valuing a business is an art, not a science, and there is no precise, perfect method of measuring a business's value. That said, there are various components to a business which may impact value for purposes of divorce. One important factor is whether or not to include "goodwill" and, if so, how much.
In Minnesota, a divorce commences upon service of a Summons and Petition. The Summons includes a "mandatory restraining order," ordering that neither party may dispose of any asset except: (1) for the necessities of life or for the necessary generation of income or preservation of assets; (2) by an agreement in writing; or (3) for retaining counsel to carry on or to contest the divorce. All insurance coverage must be maintained and continued without change in coverage or beneficiary designation. Your family court judge can modify these restraints, but only after a motion is filed.
Farm divorce cases in Minnesota are extremely complex. In addition to understanding how to equitably divide marital and non-marital assets, Minnesota farm divorce lawyers must understand the farm business, accounting and tax issues, as well as banking and finance principles. Many farm divorces require a significant understanding of business transactions and valuations, as well as an understanding of secured transactions and the Uniform Commercial Code.
When most divorces in Minnesota end, neither party is able to maintain the "marital standard of living." This happens because, not surprisingly, most people do not have a lot of money left over after payment of expenses while they are married and that issue only gets worse when the bills effectively double.
In Minnesota, antenuptial agreements (also called "prenuptial agreements" or "preunps") are useful tools for a number of reasons. One such use is to protect assets acquired before marriage. But depending on the language of the antenuptial agreement, not all of the asset may be protected from division in divorce. Law schools teach that property should be looked at as a "bundle of sticks." Each stick represents a certain component associated with the property--for real property, such "sticks" include the rights to sell, build, and obtain income, etc. These rights are divisible and can be sold or leased separately. Property brought into a marriage has different components too. For example, stock in a corporation owned before the marriage includes the value of the stock at the date of marriage, any appreciation or increase in value of the stock, and any income (typically in the form of dividends) derived from the stock. In the absence of proper language in the antenuptial agreement, the increase in the value of the stock through "marital effort" and the dividend income (even if reinvested in more company stock) would be marital and divisible in a divorce setting. Sometimes this is done intentionally in the antenuptial agreement, but sometimes it the unintended consequence of a poorly worded document. Now, if the stock is in a public corporation and you don't work there, it is unlikely that the appreciation in value of the stock owned before marriage is through "marital effort." But if the stock is in a family business which you work at, your spouse may very well be entitled to some of that appreciation. When discussing an antenuptial agreement with your lawyer, consider discussing the following in detail: 1. What property that I own today will and will not be divided if I divorce? 2. Will the income from that property be divided or not? 3. Will the appreciation in the value of the property be divided or not? 4. Will it matter whether the appreciation is through marital effort or not or whether the appreciation is "passive" or "active" appreciation? Your attorney should be able to answer all of these questions and advise you as to how the antenuptial agreement will be likely be interpreted upon enforcement, as well as whether or not it makes sense to try to include or exclude some of these "sticks" in the document. Andrew M. Tatge is a partner and chair of the Family Law and Divorce Practice Group at Gislason & Hunter LLP (www.gislason.com). He regularly represents farmers, business owners, professionals, and other high earning and high net worth individuals (or their spouses) in divorce and related actions. Andrew can be reached at email@example.com or (507) 387-1115. This information is general in nature and should not be construed as tax or legal advice.
On May 29, 2013, in the case of Haefele v. Haefele, the Minnesota Supreme Court reversed the Minnesota Court of Appeals and held that when calculating a self-employed parent's income for purposes of determining child support, the court must first identify the self-employed parent's business's total gross receipts, costs of goods sold, and ordinary and necessary expenses, regardless of whether any business funds have been distributed or are available to that parent. This is the starting point for a district court analyzing a self-employed parent's cash flow to determine child support.
Reading your divorce decree is not exactly a fun task. Not only is reviewing the document dissolving your marriage emotionally difficult for many people, the documents are usually full of "legalese" and not always drafted with any eye toward making the document easy to read. For complex cases, there may be more than one document to read of the parties agreed to "bifurcate" or deal with property issues separate from custody and parenting time, for example. Complex cases can result in divorce decrees that look like (and weigh as much as) a book when they are done.
In Minnesota divorce cases, trial judges have significant power to determine when and how to award marital assets. Rarely are their decisions overturned on appeal.