In a divorce, assets such as your Minnesota home will need to be divided in an equitable fashion. A number of factors will likely be evaluated to determine if a proposed settlement can be considered equitable. Those factors may include when an item was acquired, how it was acquired and how much it is worth after taking taxes and other costs into account.
When an asset was acquired matters
Generally speaking, assets that are acquired prior to a marriage are not subject to state property division rules. However, an exception might be made in the event that it is commingled during the marriage. You may risk commingling a home, plot of land or similar property if joint funds are used to make repairs or upgrades. The same might be true if joint funds are used to make mortgage payments or used to pay closing costs related to refinancing an existing mortgage.
Assets may be acquired in many ways
If an asset was acquired with separate funds, it may be considered a separate asset regardless of when it was purchased. It may also be a separate asset if it was acquired with funds from a trust or some other source from outside the marital estate. A prenuptial agreement may also stipulate that a home, commercial property or land remains yours to use or own in the event of a divorce.
Determining an asset’s value
A home or piece of land that is worth $100,000 might not actually net you $100,000 after it’s sold. This is because you’ll likely need to account for taxes, closing costs and other expenses. Furthermore, you’ll need to account for property taxes, insurance and upkeep while it’s in your possession when determining whether to sell or keep it after a divorce.
A divorce may have a significant short and long-term financial impact. However, there are steps that you may be able to take to protect assets such as placing them in a trust or including them as part of a prenuptial or postnuptial agreement.
