House in a Divorce

Last reviewed November 3, 2026

For many Minnesota couples, the family home is the most valuable asset to resolve in a divorce, and often the most emotionally significant one. Minnesota law treats the house like other property: the court identifies any nonmarital interest, values the marital equity, and divides it in a just and equitable way. This article explains each step and the practical options for keeping or selling the home. It is part of the site’s guide to divorce.

The Legal Framework

Under Minn. Stat. § 518.58, subd. 1, the court must make a just and equitable division of marital property without regard to marital misconduct. It considers factors such as the length of the marriage, each spouse’s income and employability, and each spouse’s contribution to acquiring the property, including contributions as a homemaker. Each spouse is presumed to have made a substantial contribution to property acquired while they lived together.

An equitable division is often, but not always, an equal one.

Step 1: Marital or Nonmarital?

A home acquired during the marriage is presumed to be marital property, regardless of whose name is on the title (Minn. Stat. § 518.003, subd. 3b). However, some or all of the home may be nonmarital. This can happen when the home, or money used to buy it, was:

• acquired by one spouse before the marriage;
• received by one spouse as a gift or inheritance from a third party; or
• excluded by a valid antenuptial agreement.

The spouse claiming a nonmarital interest must prove it by a preponderance of the evidence. In practice, this usually requires tracing the funds through closing statements and account records.

Dividing a Home With Both Marital and Nonmarital Interests

Frequently, a home has both. For example, one spouse may have used inherited funds for the down payment, while marital income paid the mortgage. In Schmitz v. Schmitz, 309 N.W.2d 748 (Minn. 1981), the Minnesota Supreme Court adopted a formula for these situations.

Under that approach, the nonmarital contribution is divided by the home’s value at purchase. That percentage is then applied to the home’s value at the valuation date. The result is the nonmarital interest, which includes its proportional share of appreciation. The remaining equity is marital.

An Illustration

Suppose a spouse contributes $40,000 of inherited funds toward a $200,000 purchase. The nonmarital share is 20 percent. If the home is worth $300,000 at the valuation date, the nonmarital interest is generally 20 percent of that value, or $60,000. Any remaining equity, after the mortgage, is marital and subject to division.

Step 2: Valuing the Home

Marital assets are generally valued as of the initially scheduled prehearing settlement conference, unless the court finds another date fair and equitable (§ 518.58, subd. 1). If an asset’s value changes substantially before final distribution, the court may adjust.

Spouses commonly agree on a value using a broker’s opinion or the county assessment. When they disagree, each may obtain a formal appraisal. The marital equity is then the home’s value minus the mortgage and other liens, less any nonmarital interest.

Step 3: Options for the Home

One Spouse Keeps the Home

The spouse keeping the home typically compensates the other for their share of the equity. This can be done through other assets, such as retirement funds or savings, or by refinancing. Refinancing also removes the departing spouse from the mortgage. A decree that awards the house to one spouse does not by itself release the other from the lender’s loan.

The Home Is Sold

The spouses sell the home and divide the net proceeds according to their agreement or the decree. In addition, the court may order the sale of the homestead while the case is pending if necessary to preserve marital assets (§ 518.58, subd. 3).

Deferred Sale or Lien

Sometimes, a home is not sold immediately, often so that children can stay in their school through a set date. In that case, the departing spouse may receive a lien on the property, payable on a sale or a specified event.

Living Arrangements During the Divorce

While the case is pending, either spouse may ask the court for temporary use and possession of the home under Minn. Stat. § 518.131, through a temporary motion. Each spouse also owes the other a fiduciary duty not to waste or conceal marital assets (§ 518.58, subd. 1a).

Other Real Estate

The same principles apply to cabins, rental properties, and land. Each parcel is classified, valued, and divided as part of the overall property settlement, which also includes assets such as retirement accounts.