Gislason & Hunter Law Blog

One of the most difficult areas of Minnesota family law (for both lawyers and clients) is spousal maintenance, otherwise known as alimony.  Unlike child support, there is no formula that you can plug numbers into and come away with a good answer. 

Instead, awards of spousal maintenance are based on social norms and public policy—therefore, not entirely consistent, and subject to significant change over time.  In the end, whether or not spousal maintenance is granted may come down simply to what one person thinks is “fair”—and what is fair to one person, is not always fair to another, especially the person ordered to pay.

That said, there are some criteria that the court must take into account when determining whether spousal maintenance should be awarded and, if so, how much. 

Some of those criteria include:

• Does the party seeking spousal maintenance have sufficient assets to support herself?  The court only considers income from the assets awarded, and not an invasion of the asset itself.  So, consider awarding the spouse who might receive spousal maintenance assets capable of producing income (i.e., rental properties, dividend-paying stock, etc.).
• Is the spouse seeking spousal maintenance “self-supporting?”  The court will consider if the spouse seeking spousal maintenance is appropriately employed.  
• What standard of living did the parties have during the marriage?  A higher standard of living during the marriage may show that spousal maintenance is appropriate. 
• Do the children have specific needs which require a parent to stay home or some other reason to justify one parent continuing to be a stay-at-home parent?
• If spousal maintenance is needed, how much? 
• Can education or training allow a party to become self-supporting at some point?
• What is the financial ability of the paying party?
• How old are the parties?
• What is the physical and emotional condition of the party seeking spousal maintenance?
• How long should a party receive spousal maintenance?

In many cases, it is possible to secure a waiver of spousal maintenance as part of an agreement to settle property issues, and sometimes even in exchange for parenting time or custody.

Spousal maintenance is also, generally, taxable income to the recipient and tax deductible for the paying spouse. 

Cases involving spousal maintenance deserve and require a significant conversation with your lawyer about your particular circumstances.  Skilled lawyers, accountants and financial planners can assist in creating a settlement or a court strategy that maximizes the net result to their clients. 

Andrew M. Tatge is a business and family law attorney with Gislason & Hunter LLP (www.gislason.com) and can be reached at atatge@gislason.com or (507) 387-1115.  This information is general in nature and should not be construed as tax or legal advice.

For anyone who owns a business, the topic of what happens to their business upon divorce (especially if it is someone else’s divorce) is crucial.  Here are some tips and suggestions to help you plan for possibility of divorce, so that you can get back to doing business and save some money (and your sanity) in the event a divorce impacts your business. 

You need to safeguard against not only your divorce, but those of your co-owners, investors, as well as your adult children.

Antenuptial Agreement:  If you own a business with your spouse and there are no outside investors or owners, you should give due consideration to executing an antenuptial agreement (otherwise known as a prenuptial agreement) before marriage or a postnuptial agreement if you are already married.

Buy-Sell Agreement:  If you own a business or are an investor in a business which includes multiple persons, you should consider executing a buy-sell agreement.  These buy-sell agreements go by different names depending upon how your business is organized (corporation, limited liability company, partnership, etc.), but the general principles are the same.  The goal of these documents is to provide some certainty to an otherwise uncertain outcome.  They can be used to determine what happens to a business when a person dies, becomes disabled, retires, wants to sell his or her interest in the business, or when someone gets a divorce.

In Minnesota, divorce laws provide for an “equitable distribution” of marital assets.  Equitable does not mean equal, even though most people think it does.  This means that absent an agreement to the contrary, a judge decides how to divide marital assets.  This can cause absolute havoc on a business.  Even if a judge does not award the business interest to a non-participating spouse, at a minimum, the business can be pulled into court and have its business records and practices opened up to the other spouse and potentially the public—appropriately tailored confidentiality agreements and protective orders are of vital importance to protect intellectual property, trade secrets and the like.

These documents are certainly not easy to talk about – especially with a spouse or soon-to-be-spouse, but they are essential to proper business planning.  Your co-owners, on the other hand, should appreciate discussing these matters, since the protections included in these documents benefit them too.

Andrew M. Tatge is a business and family law attorney with Gislason & Hunter LLP (www.gislason.com) and can be reached at atatge@gislason.com or (507) 387-1115. This information is general in nature and should not be construed as tax or legal advice.

In Minnesota, couples may enter into agreements which determine what happens to their finances and property in the event that the marriage ends in divorce, separation, or in the event of the death of one of them.  Such agreements are called antenuptial agreements (sometimes referred to as a prenuptial agreement or “prenup”).

In most instances, antenuptial agreements are used to protect assets an individual wants to keep separate from marital property, but these contracts can also be used to determine how marital debt will be paid off, how spousal maintenance will be structured, and what will happen to assets in the event that the spouse in whose name the assets are held predeceases the other spouse.  Some people who have been previously married or have children from before the marriage wish to have an antenuptial agreement to protect and preserve their assets for those children.  The purpose of an antenuptial agreement is not to define what will occur during the marriage. 

The parties can be very creative in drafting an antenuptial agreement; however there are limitations.  For one, a court is not bound to uphold provisions of an agreement which violate Minnesota law.  Certain provisions of an antenuptial agreement, for example, who will have custody, the terms of visitation and/or child support, will be carefully scrutinized by a court at the time of separation and divorce to determine what is in the best interests of the children and whether the support provided is within the laws of Minnesota.  Courts are free to ignore entire provisions of an agreement if those provisions are against the law or public policy.

There are some very important considerations before executing an antenuptial agreement.  For one, be sure to have the agreement signed in advance of the wedding, but close enough in time so that the value of assets and debts are accurate.  That said, the conversation with your soon-to-be-spouse about entering into an antenuptial agreement should happen as soon as possible to avoid any claims of coercion.  The closer you get to the wedding day, the more likely a court could disregard all or part of the agreement if one party is pressured by a short timeline to sign.  Never sign an antenuptial agreement the day of the wedding.

Second, a court can disregard all or part of an antenuptial agreement if there was fraud involved.  If you ask your future spouse to sign an antenuptial agreement do not mislead him or her about your financial circumstances.  That could be viewed as fraudulent. 

Third, make sure your future spouse has a chance to consult with legal counsel of his or her own choice.

Finally, Make sure the agreement is fair.  If a court thinks that the agreement was unfair at the time it was created, it may not be enforced. 

Already married, but think an antenuptial agreement would have been a good idea? You can still enter into such an agreement (called a postnuptial agreement) if the agreement:  (1) complies with the requirements for antenuptial agreements and Minnesota law; and (2) at the time of its execution each spouse is represented by separate legal counsel.

Postnuptial agreements may not determine the rights of any child of the spouses to child support from either spouse or rights of child custody or parenting time.  Also, a postnuptial agreement is presumed unenforceable if either party commences an action for a legal separation or dissolution within two years of the date of its execution, unless it can be established that the agreement is fair and equitable.

In addition to these substantive requirements, there are important procedural requirements.  For example, both “prenups” and “postnups” must be in writing, signed in the presence of two witnesses, and notarized. 

This information is general in nature and should not be construed as tax or legal advice.  Please consult your tax and/or legal advisor for guidance in your particular situation.  The author can be reached at atatge@gislason.com or (507) 387-1115.