Dividing Farm Land In A Minnesota Divorce

Updated: June 2025

I’ve discussed farm divorces before in this blog, and while there are some unique issues during farm divorces, there are some general principles regarding the division of farmland that is pretty standard in how property is divided in a Minnesota divorce.

The basic principle is that each spouse is entitled to ½ of the assets in the divorce as well as ½ of the debt. So, if you and your spouse own 100 acres of farmland valued at $5,000 per acre with $75,000 still owed on the land, the total equity to divide would be $425,000. Seems simple enough? Well, there are a few sticky points to often pop up.

• What is the “real” value of the land?
• Is the loan against it just for the land or are other assets used as collateral?
• Was the acreage purchased at fair market value or did a family member sell it a discount?

What is the “Real” Value of the Farm Land

This sounds simple, doesn’t it? Unfortunately, it can be pretty tricky to accurately value farmland. The reason is that since most farmers in Minnesota take operating loans, they will often encumber not only the house, the tractors (we call them implements or chattel), but more and more, the bank is requiring that the actual acreage itself be pledged as collateral on the debt.

Let’s take a look at a simple divorce, a couple owns a house worth $200,000 with a $125,000 mortgage. This means the equity in the house is going to be $75,000; divide that in half, and each party should get $37,250. Nice and simple.

Now, look at a farmer who owns a modest farm site of 100 acres with an average value of $5000 per acre (the actual valuation of the acreage is a whole separate post!) so the value would be $500,000 right?

Now, the complexity comes in when you figure in that Dad sold the land at a discount price of of $2500 per acre. This creates a claim of non-marital property that must be dealt with.

Now the debt against it may well be over $500,000, but it could be debt rolled into for the new Case IH tractor, the cars, even the home site (usually under a separate deed and valuation). If that’s the case, how can we figure out the equity in the farm?

Short answer is, we can’t. What we do is start working on our software program that values all significant assets, the house, the car, the acreage, the implements, the crops in the dryer, etc, etc.

So, if you’re going through a divorce and your a farmer, the best thing you can do to save money as well as make the divorce go smoother is to start an HONEST list of assets to give to your lawyer. One thing that often comes up in farm divorces is the farmer tends to undervalue his property, this can lead to a lot of needless fighting later on. It’s best to put a real value on the asset sheet and move on.

Information obtained in mankatofamilylaw.com may contain knowledgable content about Minnesota Family Law that may be considered beneficial to some; however, in no way should this website or its contents be considered legal advice. Mr. Kohlmeyer is a Minnesota licensed Attorney and cannot provide legal services or guidance to those outside of Minnesota. .