MikLin Enterprises, the owner of 10 Jimmy John’s restaurants, recently learned the hard way that retaliating against employees who are engaged in legally protected activity can have serious consequences.
Employers frequently require job applicants to submit to a criminal background check. An applicant’s criminal history can be relevant to an employer in combating theft and fraud, preventing workplace violence, and avoiding potential liability for negligent hiring. However, the use of criminal-history records can constitute unlawful employment discrimination because exclusion from employment of persons with a criminal record can have a race-based disparate impact. A policy that automatically excludes all employment opportunities because of any criminal conduct is inconsistent with these factors because such a policy does not focus on the dangers of particular crimes and the risks in particular positions.
In the case of Jacobs v. Jacobs, an unpublished opinion of the Minnesota Court of Appeals filed on July 16, 2012, the Minnesota Court of Appeals discussed the rule that income earned during the marriage, even from non-marital sources such as reinvestment dividends and interest off non-marital investments, are marital property.
In Minnesota divorces, income received during the marriage from non-marital investments is treated differently than appreciation of non-marital assets during the marriage. Income from a non-marital investment, such as interest or a dividend, produced during the marriage is always marital property. However, determining whether appreciation in the value of a non-marital investment depends on what caused the appreciation. If the appreciation is due to active efforts of one or both spouses during the marriage, then the increase in value is marital property. If the increase is attributable to inflation forces or market conditions, the increase in value maintains its non-marital character. Thus, it is important when dividing non-marital assets which have appreciated in value during the marriage to determine whether that was a result of active management or efforts by one or both spouses, or is merely from market forces.
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.
A common question in Minnesota divorce cases, especially where one or both of the divorcing parties own substantial assets or businesses, including farms, is what to do with assets during the divorce (in other words, after the divorce has started but before the court makes its final order).
Once a divorce is started by service of a Summons, there is a temporary restraining order on both parties requiring that neither party dispose of any assets except (1) for the necessity of life or for the necessary generation of income or preservation of assets, (2) by an agreement in writing, or (3) for retaining counsel to carry on or to contest the divorce proceeding. Also, all currently available insurance coverage must be maintained and continued without changing coverage or beneficiary designation. If a party violates any of these provisions, he or she will be subject to sanctions by the court. Minnesota law also provides that parties may not dispose of assets in contemplation of commencing a divorce either.
In Minnesota, each divorce party owes a fiduciary duty to the other for any profit or loss derived by that party, without the consent of the other, from a transaction or from any use by the party of the marital assets.
If a court finds that a party has, without consent of the other, in contemplation of commencing a divorce or during a divorce proceeding, “transferred, encumbered, concealed, or disposed of marital assets except in the ordinary course of business or for the necessities of life, the court shall compensate the other party by placing both parties in the same position that they would have been in had the transfer, encumbrance, concealment, or disposal not occurred.” The burden of proof to convince a court that the other party has transferred or concealed or disposed of marital assets is on the party claiming that the other person has done so without consent of the claiming party, and that the transfer was not in the usual course of business or for the necessities of life.
If someone does transfer, conceal, or dispose of marital assets, the court, in dividing the marital property, may impute the entire value of an asset and a fair return on the asset to the party who transferred, encumbered, concealed, or disposed of it. Use of a power of attorney or the absence of a restraining order against the transfer, encumbrance, concealment or disposal of marital property is not available as a defense.
This means that hiding assets with family members or friends or selling assets to others at fire-sale prices to injure your soon-to-be-ex-spouse will not work and can come back to cost you substantially. Think of what would happen if one spouse destroyed the other’s favorite impressionist painting worth $5 million—quite an expensive way to release some anger. Although it may be fun in the short term, the financial consequences can be dire.
Although Minnesota judges cannot base a property division upon a finding of fault of one party or the other, Minnesota courts have great discretion in determining an equitable distribution of property and a court could certainly find other ways to “punish” one spouse or “protect” the other spouse.
Andrew M. Tatge is a business and family law attorney with Gislason & Hunter LLP (www.gislason.com) and can be reached at atatge@gislason.comor (507) 387-1115. This information is general in nature and should not be construed as tax or legal advice.
What happens when a divorce has been started and one of the parties dies during the divorce proceeding? Typically, the divorce is ended and the case is dismissed. The surviving spouse receives the entire marital estate. There are some protections if a court actually enters a judgment and decree dissolving the bonds of marriage. In those cases, courts will typically let the remaining asset and debt division to continue and place the decedent’s personal representative in his or her place.
In many instances, we recommend, in consultation with experienced estate planning attorneys, that spouses in the midst of a divorce execute a new will, expressly terminate any Power of Attorney, change their Health Care Directive so that the other spouse does not have the ability to make end of life decisions and, in some cases, sever real estate held in joint tenancy so that the parties are then tenants in common and any interest of one spouse does not necessarily become the property of the other. These estate planning techniques can be done in anticipation of divorce.
Also, a valid antenuptial agreement can address issues of disposition of marital assets upon the death of either spouse, even if the parties are not in the midst of a divorce.
It is highly recommended to discuss these issues with your attorney early on in the process so that in case the unthinkable happens, you will be prepared and assets can be preserved appropriately.
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.
