Hardship Awards and Hidden Assets in a Minnesota Divorce
In Minnesota, the court may apportion up to one-half of nonmarital property to prevent an unfair hardship, and if a spouse hid or disposed of marital assets in contemplation of or during the divorce, it compensates the other spouse and may impute the asset’s value to the spouse who did so.
Hardship awards of nonmarital property
If either spouse’s resources or property, including the spouse’s portion of the marital property, are so inadequate as to work an unfair hardship, the court may, in addition to the marital property, apportion up to one-half of the nonmarital property described in clauses (a) to (d) of section 518.003, subdivision 3b, to prevent the hardship. It must make findings based on the same factors (Minn. Stat. 518.58, subd. 2).
Fiduciary duty and hidden assets
During a dissolution, or in contemplation of one, each spouse owes the other a fiduciary duty for any profit or loss from a transaction or use of marital assets without the other’s consent. If a spouse transferred, encumbered, concealed or disposed of marital assets other than in the usual course of business or for necessities, the court compensates the other spouse by placing both in the same position as if it had not happened, and may impute the entire value of the asset and a fair return to that spouse (subdivision 1a).
The burden
The spouse claiming a transfer must prove it was made in contemplation of or during the proceeding, without consent, and not in the usual course of business or for necessities. A power of attorney or the lack of a restraining order is not a defense.
Sale and distribution while pending
The court may order sale or distribution of assets while the proceeding is pending when it finds it appropriate (subdivision 3).
Evidence to gather
Statements for the year before filing, records of large transfers, titles and loan documents.
Questions to bring to an attorney
Ask how the court is likely to treat any large transfer or nonmarital asset in your case.
Next steps
Ask a licensed Minnesota attorney how hardship awards and the fiduciary duty apply to your assets, and test shares in the Minnesota property division calculator.
Frequently asked questions
Can a Minnesota court divide nonmarital property?
Only to prevent an unfair hardship, and then up to one-half of it, with findings.
What is the fiduciary duty in a Minnesota divorce?
Each spouse owes the other a fiduciary duty for profit or loss from use of marital assets during or in contemplation of the proceeding.
What happens if a spouse hides assets in Minnesota?
The court compensates the other spouse and may impute the entire value of the asset and a fair return to the spouse who hid it.
Who must prove hidden assets in Minnesota?
The party claiming the transfer or concealment has the burden of proof.
Can marital assets be sold during a Minnesota divorce?
The court may order sale or distribution while the proceeding is pending when it finds it appropriate.
Official sources
- Minn. Stat. 518.58: division of marital property
- Minn. Stat. 518.003: marital and nonmarital property
- IRS Publication 555: community property states
A local family law attorney can review your situation — many offer a free consultation.
This is general information, not legal advice. It is based on the cited Minnesota statutes, rules and court opinions, and every case turns on its own facts. Confirm how the law applies to your situation with a licensed Minnesota attorney.