Maybe not. Under Minnesota law, any property acquired by either person during the marriage is presumed to be marital property and, as such, is subject to equitable distribution between the parties at the time of divorce. Conversely, property acquired by either person before the marriage is considered nonmarital property – not subject to division between the parties.

The crucial issue is whether the property was acquired during the marriage. Houses are examples of property that can have both marital and nonmarital components. For example, a house owned by a person before the marriage may have an equity increase (i.e., the difference between the value of the home and the balance of any existing mortgages or loans) during the parties’ marriage. Minnesota courts have held that an increase in equity during the marriage is marital property.

The courts have developed a formula for determining what portion of the equity is marital property and what portion is nonmarital property. At its most basic, the formula for computing nonmarital property (which is referred to as the Schmitz formula) is the percentage the home equity bore to the fair market value at the time of marriage multiplied by the fair market value at the time of divorce. The formula can get quite complicated. If you have any questions, please don’t hesitate to contact us.

by Robert W. Gadtke

Tags: marital property, nonmarital property, Prperty division