If you're doing your estate planning or are in the process of getting a divorce you may be wondering about whether marital property is divided in Minnesota.
“Is Minnesota a community property state?” In short, no.
For more details about how this works in Minnesota, keep reading. In addition, if you’re seeking the guidance of a financial advisor to help you with your estate planning, schedule a call with a 360 Financial advisor.
A good advisor will help you with tax planning, estate planning and wealth management. Estate planning is complex, and you shouldn’t have to go through this process alone.
Please note that this post is general in nature and is not intended to be a substitute for working with an estate planning attorney or a financial advisor.
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What Is a Community Property State?
A community property state is a state in the US where spouses are considered to be joint owners of assets and debts that were acquired in marriage.
When a couple lives in a community property state and divorces, they will divide their marital assets 50/50, including properties. While equality can seem fair, if one spouse has been contributing more to the marriage financially, this can lead to disagreements and long-term conflict.
As of 2024, there are only 9 community property states in the US: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. The rest are not community property states.
Is Minnesota a Community Property State?
No, Minnesota is not a community property state.
In Minnesota, the law provides for equitable division of marital property. This means that while dividing marital assets may be equal, it doesn’t have to be. It’s completely possible for one spouse to be awarded more than half the assets acquired during the marriage.
Equitable Distribution in Minnesota
If you’re a couple in Minnesota and you decide to divorce, several steps occur as part of equitable distribution.
The first step is classifying what property is classified as marital property vs separate property. Only marital property will be taken into consideration when splitting the assets.
Each item will then be evaluated, typically through the establishment of a valuation date (usually the date of your separation). Property will be designated a value based on the market value established on that date.
After completing the evaluation, property will be divided between you and your spouse. Certain factors, like the occupation of you and your spouse, how long you two have been married, prior marriages, and even health, will be taken into consideration by the court of Minnesota.
Marital Property vs. Separate Property in Minnesota
Not all property is subject to being divided in Minnesota. Marital property includes:
All real estate properties purchased during the marriage.
Income earned by either spouse during the marriage, including cash in bank accounts, savings, and collectibles.
Furniture or household items purchased during the marriage.
Vehicles purchased during the marriage.
Investments accounts that were contributed to by either spouse during the marriage, including 401(k)s, IRAs, and other retirement accounts.
On the other hand, separate property is not subject to being divided during the divorce proceedings. Separate property includes:
All properties owned individually before marriage.
Personal injury compensation.
Individual inheritances and gifts, even if they were received during the marriage.
All properties acquired after the date of legal separation.
Properties that were specifically designated as separate in a prenuptial agreement beforehand.
In some cases, the line between marital property and separate property can be blurred. For example, if you have acquired separate property (like savings pre-marriage) and combined it with marital property (deposited into a joint account and used for expenses during the marriage), it can now be considered as commingled property and may be divided as part of marital property.
What Are Considered Non-Marital Assets in Minnesota?
As defined in the official Minnesota Legislature (Section 518), non-marital property is any property that was acquired before your marriage and after your marriage has ended.
During your marriage, the only non-marital assets that can be acquired are typically gifts or inheritances clearly stated and given to one spouse and not the other, personal injury compensations, and any additional assets stated as separate in a prenuptial agreement.
All non-marital assets are considered either the property of you or your spouse in the event of your legal separation. However, there are always exceptions to the rule. Working with an experienced attorney can help you understand your rights when it comes to division of property.
Assets That Are Part Marital and Part Non-Marital
As mentioned earlier, some assets can be deemed by the court of Minnesota as part marital and part non-marital.
Commingled assets can be tricky to figure out, making it difficult for the court to decide what the marital and non-marital assets are.
Common examples of commingled property include:
An inheritance deposited into a shared spousal bank account.
Assets purchased with non-marital income, but titled in joint names.
Investments made with contributions from before, during, and after the marriage.
There are several ways you can prevent the commingling of assets in the possible event of a separation. These include drafting up a clear prenuptial agreement, avoiding using marital funds to pay off separate debts or properties, keeping separate bank accounts, and keeping up-to-date records of any purchases made during the marriage.
Are Debts Marital or Personal Property?
Debts are considered marital property in Minnesota.
However, it’s often more complex than simply being subject to equitable division—which can be a relief for those whose spouse has accumulated debts during their lifetime.
Only debts accumulated during the marriage (acquired together) will be declared as marital property by the court. For debt acquired outside of the marriage by one spouse for personal reasons, the individual will be solely responsible for paying off their own debt.
Is Your Financial Advisor Helping You with Your Estate Planning?
Whether you have significant property that could be affected in the case of divorce or you want to plan and organize your financial assets ahead of time, you should seek the advice of a wealth management team that can help you with estate planning.
Estate planning helps you prepare and organize the designation of your estate in the event of your death. However, working with a fiduciary financial advisor can also help you pursue the best financial outcome in unexpected cases like spousal separation.
Common Questions
Is Minnesota a 50/50 state for divorce?
No, Minnesota follows equitable distribution, meaning marital property is divided fairly but not necessarily equally, depending on various factors.
What is considered marital property in MN?
Marital property includes assets acquired during the marriage, like income, real estate, and investments, unless classified as separate.
What are marital assets under Minnesota law?
Marital assets in Minnesota include any property acquired during the marriage, such as real estate, income, retirement accounts, household goods, and vehicles. These assets are subject to equitable division in a divorce, meaning they’ll be divided fairly, not necessarily equally.
What does "just and equitable division" mean in a Minnesota divorce?
In Minnesota, "just and equitable division" means assets are divided fairly based on factors like each spouse's economic contributions, needs, and marriage duration. This doesn't guarantee an equal split.
How do community property laws differ from Minnesota's approach to property division
Community property laws mandate a 50/50 split of marital assets, while Minnesota uses equitable distribution, which aims for a fair, but not necessarily equal, division based on various factors.
Are capital assets considered marital property in Minnesota?
Yes, capital assets like investment accounts acquired or contributed to during the marriage are generally considered marital property, subject to equitable distribution.
What qualifies as non-marital property in Minnesota?
Non-marital property includes assets owned before marriage, inheritances, gifts, personal injury awards, and assets designated as separate in prenuptial agreements. These are typically not divided in a divorce.
How does a prior marriage affect the division of assets in Minnesota?
A prior marriage may impact asset division if there are existing obligations like alimony or property agreements. Courts consider these factors when distributing marital property equitably.
How long do you have to be married to get half of everything in Minnesota?
Minnesota doesn’t guarantee a 50/50 split; property division depends on equitable factors rather than marriage duration.
Who gets the house in a divorce in Minnesota?
The court considers factors like each spouse's contributions, financial needs, and custody arrangements to determine who keeps the house.
Can my wife take my house in a divorce if I bought it before marriage in Minnesota?
Generally, property bought before marriage is separate, but it may become marital if commingled with marital funds.
Is my spouse entitled to my inheritance under Minnesota law?
No, inheritance is typically separate property unless it has been commingled with marital assets.
Am I responsible for my spouse's debt in Minnesota?
Debts acquired during the marriage are marital, but each spouse is usually responsible for their premarital or individual debts.
Who gets the house when an unmarried couple splits up in Minnesota?
For unmarried couples, property ownership follows title deeds, but they may need legal intervention if they co-owned property.
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