As we’ve discussed before, the division of assets during a Minnesota divorce operates under a concept known as equitable division.
This means things like retirement accounts, savings accounts, stocks, bonds, real estate and many other important assets will need to be fairly divided between husband and wife when the marriage finally ends. Another asset that almost all couples have, but whose division may not always be as simple as dividing down the middle is a vehicle. The equitable division laws do not come into play in child custody or Minnesota child support situations.
What is equitable division?
As we’ve mentioned, Minnesota is an equitable division state, which means that during a divorce a couple’s assets must be split “equitably.” It’s important to note that equitable does not mean equal. Each party should walk away with a fair share of the marital assets, but this is not always guaranteed to be 50/50 and can instead be influenced by a variety of factors.
What usually happens with a car?
In the simplest of cases, each spouse will have his or her own vehicle with his or her own name on the title. In these cases the default rule will apply so that each party walks away with the car they typically drive. This means that not only will the person get the car, but they almost always are required to take responsibility for whatever expenses are associated with their vehicle. This means that you are responsible for any payments related to the vehicle, registration costs, maintenance, taxes, repairs and insurance.
What about more complicated cases?
In many cases things aren’t as simple as the above scenario. Often times both spouse’s names will be on a car’s title which makes simply splitting and walking away problematic and potentially risky. If your spouse’s name is on the title to your car and there is no debt on the vehicle it is very easy to have your spouse sign the car over to you. However, if there is debt on the vehicle and both of you have signed for that debt then refinancing will likely be in order.
The reason that refinancing is important is because if your spouse keeps a vehicle where you have signed on to repay the debt and if something goes wrong (meaning your spouse stops making payments), the company will come after you. This can and will happen even in cases where the divorce decree explains that your spouse will be responsible for all debt related to the vehicle. Your earlier agreement with the loan company trumps this arrangement and they will expect you to pick up the payments. To avoid this hassle, it’s a good idea to insert language in a divorce agreement requiring parties to refinance loans and remove the names of the other party, minimizing the chance of future complications.
What if there’s only one family vehicle?
Though many families have two vehicles, that’s not always the case. If you’re in a family with only one car that is shared then simply sawing the vehicle in half will do no one any good. In these cases you’ll have to first reach an agreement about which party gets the vehicle, often the person who drove the car the most in the first place. After this is decided, you’ll usually have to offset this by giving something of comparable value to the spouse without the car. That means if the husband walks away with a $10,000 car, it’s only fair that the wife be given $10,000 in another form.
An experienced Minnesota family law attorney can help walk you through the difficult process of divorce, including offering advice on confusing financial issues such as alimony and helping negotiate emotional subjects like child custody arrangements. For more information on divorce in Minnesota, along with a variety of other topics, contact Joseph M. Flanders of Flanders Law Firm at (612) 424-0398.
See Our Related Blog Posts:
Minnesota Family Law: What Happens To The House?
Minnesota Family Law And The Divorce Discovery Process
