When a couple who owns farmland in Minnesota divorces, one of the most complicated aspects of the division of assets is determining how to handle the land. If farmland is the primary marital asset, it can significantly impact the financial future of both parties. Farmland often holds significant value both in terms of its real estate worth and its income-producing potential. Understanding how Minnesota law treats farmland during a divorce can help ensure that you are prepared and informed.
Is Farmland Considered Marital Property?
Farmland is typically considered marital property if it was purchased during the marriage. For many families, however, farmland is handed down from generation to generation and may have been inherited during the marriage, which means it could be considered non-marital. For inherited farmland especially, determining which portion, if any, is marital property can get very complicated.
The biggest consideration for determining whether inherited farmland has become marital property is to evaluate if the farmland has been commingled with marital assets. For example, if marital funds are used to improve the land or pay off a mortgage, that could create marital interest in inherited farmland.
Valuing Farmland
One of the first steps in dividing farmland during a divorce is determining its value. This will likely require a professional appraisal of the land. This appraisal will take into account the market value of the land, any crops or livestock that may be associated with it, as well as any improvements made to the property (like buildings, irrigation systems, etc.).
It’s important to remember that farmland may have both tangible and intangible value. For example, the history or sentimental value of the land might be important to one spouse, and the income-generating potential could be crucial for the other. Both these factors can influence how the court divides the land. Any debt on the farmland will also be taken into consideration when determining its value.
How Farmland Can Be Divided in a Divorce
There are several ways to divide farmland in a divorce, depending on the specifics of the case:
- Selling the Farmland: If the farmland cannot easily be divided or if both parties cannot agree on how to keep it, the court may order the land to be sold. The proceeds would then be divided equitably, with each spouse receiving their share. This is often the most straightforward solution if neither party is interested in continuing to farm or maintaining the property.
- One Spouse Keeps the Farmland: If one spouse is more interested in keeping the farmland (perhaps to continue farming or because of sentimental value), the court may award the farmland to that spouse, provided they compensate the other spouse with other assets.
- Shared Ownership: In some cases, the court may determine that the land should be co-owned by both spouses post-divorce. However, this is relatively rare, especially if there are concerns about the land’s management or the ability of both parties to work together.
- Other Creative Options: If the parties are able to work together, they could come up with another solution that better meets their needs and desires. For example, large tracts of farmland may be able to be divided into separate parcels of land. This could allow one spouse to take ownership of some land while selling a portion of the land to fulfill the property division. Or, if the parties both want the land to be handed down to a child to continue farming the land, they could set up a trust or agree to transfer the property to the child. Spouses could also structure more long term buy out options to ensure that a spouse can retain ownership of the land or continue to operate a farming business.
Consulting an Attorney
Farmland is a unique asset in a divorce, and the division process can be complex. If you are facing a divorce in Minnesota and farmland is a significant part of your marital estate, it’s highly recommended that you consult with a family law attorney who is experienced in handling agricultural property. An attorney can help you navigate the valuation process, explore your options for dividing assets, and ensure that your interests are protected. Contact Rochford Langins Jarstad LLC today to schedule a consultation.