Bernard Larson v. Rita M. Larson

Summary

The Minnesota Court of Appeals held that a homestead acquired by one spouse before marriage with that spouse's funds was nonmarital property under Minnesota Statutes section 518.54, subdivision 5. The court reversed the trial court's classification of the homestead as marital property and remanded for sale and distribution of the net proceeds using the formula established in Schmitz v. Schmitz.

Holdings

1. Because Bernard acquired the homestead before the marriage, the property was nonmarital property under Minn. Stat. § 518.54, subd. 5, notwithstanding the trial court's conclusion that it was not acquired in exchange for another asset.
2. Bernard was entitled to receive the portion of the homestead's net equity attributable to his $25,000 nonmarital investment.
3. The homestead was to be sold, with reasonable costs of sale and existing liens paid, and any remaining net proceeds divided under the formula stated in Schmitz v. Schmitz.

Questions Presented

1. Whether a homestead acquired by one spouse before marriage, under a contract for deed in that spouse's name alone and with the acquisition payment furnished exclusively by that spouse, is marital property subject to division in the dissolution proceeding.

Disposition

reversed_and_remanded