You’ve been married 20 years or even just a few, either way you’ve accumulated, some things, and by Some things I mean a lot of stuff! What do you do with personal property during a Minnesota Divorce? Well, read on and you will learn what Judges can and, often do, during a divorce.
What Is Marital Personal Property?
First let’s take a look at what marital personal property is: Personal property is considered all the property that isn’t a car, house or financial accounts. This includes the television, couch, chair, lamps, pictures, tools, pots and pans and everything else. Items which require a title (like an automobile or a motorcycle) are usually not considered “personal property”. Also, don’t confuse “real property” which is land or a house with personal property since these all require a deed (or title). For a refresher on what marital vs non-martial property is you should check out that earlier blog post.
Don’t want to read the blog, here you go: the short answer is that if the property was brought into the marriage or given as a gift it usually is considered non-martial property, while most things acquired during the marriage is considered marital property. Remember non-marital property means you don’t divide it with your spouse.
How to Value All That Stuff?
Now you know what marital property is, but how do you actually put a value it? Do you use the value you paid for it? The short answer is no, you don’t. Minnesota Divorce laws use FMV or Fair Market Value to determine the value of marital property. Usually, fair market value is what a person would pay for the item during an “arm’s length transaction” an example of this might be a listing in the paper or online and sold to a non-family member or friend, someone you don’t typically know or have a relationship with would prove what the value is.
Don’t get any smart ideas and sell that brand-new television to your brother in law for $1 though! If you don’t get a reasonable price (reasonable as defined by the Judge) you might very well still have to pay what the value would have been if you sold it fairly.
Some Judges do use a Craigslist.com value, this of course, usually means the $2,500 sofa you purchased 2 years ago is going to be worth $250 on Craigslist. Keep this in mind when trying to value everything since most people over value what they own. This is why you really don’t want to spend hours and hours fighting about a 10 your old love seat or television since you’ll spend many more dollars on legal fees than the property is actually worth.
It is possible to get an appraisal of personal property, but this isn’t done that often because it’s generally not cost effective. A person, usually an auctioneer, just walks through the house and starts to assign values to the various items which as you can guess is not the most effective and there is an additional cost to do this.
Option 1: The Accountant
One option in how to organize and list is to use a spreadsheet and start to list every item, Like this:
I’ll be honest and admit this is not my favorite method, I find that there are two problems with this method: The first is that the values are often not accurate or at the very least your soon to be ex-spouse will argue that the values are not accurate (normally, all the things your soon to be ex-spouse is going to get will be considered valued much too high, while all the property you are going to receive is undervalued!). Since the value is so precise on paper, it’s incredibly easy to start arguing line by line and I don’t see cases like this settle that often.
The next problem is that it is hard to list everything. Think about if you had to list every single thing you own, from the television on the wall all the way down to what is in your junk drawer! Even if you are the most organized person I would bet you will some things. The items that you miss are the ones your soon to be ex-spouse will be sure to tell you about and you can imagine the argument that will happen!
Option 2: List & Equalization Payment
Another option is the person who leaves the house simply makes a list of what they want and the list is agreed upon with an amount to equalize what each person received. This is much less accurate and really just a guess, not a line by line analysis like Option 1. Since the equalization number is hard to come up with (and is really just a guess) which is why the amount is often just a rounded up number such as $2,500 or $4,000 to try and equalize the division of property.
What to do with the irreplaceable things?
Some things you just can’t put a dollar value on, children’s Christmas ornaments, kid’s arts projects from second grade, class pictures, etc. how can you value that? Well you really can’t, but sometimes the court will order one party to pick one item, then the other party will pick so on and so one until the entire collection is divided.
Side note: with pictures, it’s very possible to get a digital copy made and printed that is nearly indistinguishable from the original, keep this in mind when you start to argue about the children’s 5th grade school photo’s!
The Nuclear Option
What if you can’t make a list or you can’t agree on values, what happens then? The Court can always order what I like to call the “Nuclear Option” this is where the court orders everything sold often time at an auction. The reason I call it the “Nuclear Option” is that EVERYTHING is sold, put on tables and your neighbors can come over and bid on it, an idea that most people do not like! Aside from the intrusiveness and awkwardness of it, the prices that are paid are usually pennies on the dollar.
Well, there you go a look at how to divide property as you can tell there isn’t any one way to do divide all your possessions, but there are a few different ways, so be sure to keep an open mind and hopefully you can settle your case without going to trial.