Standing Her Ground: Violet’s Fight for Fair Property Division

A Narrative Story of Schmitz v. Schmitz, 309 N.W.2d 748, 750–51 (Minn. 1981) for the burden of proof in nonmarital property claims.

When Violet Schmitz* married Lawrence in January 1973, she brought more than just love to their blended family. As a widow with children from her previous marriage, she understood the importance of financial security and fair treatment. What she didn’t expect was having to fight for recognition of her contributions to their shared life.

Their story began with hope and practical planning. Both had lost their first spouses and were raising children from previous marriages. When they decided to build a life together, they purchased a duplex in northeast Minneapolis for $38,000 in summer 1973. While Lawrence contributed the $8,000 down payment from his previous home’s sale, Violet made her own meaningful contributions throughout their six-year marriage.

Violet worked tirelessly as both a factory worker and cook, earning over $22,000 during their marriage while also pursuing her education at Augsburg College. She managed her own finances responsibly, even receiving and carefully managing two inheritances totaling over $38,000. When they purchased Florida lots together, she contributed $500 toward the down payment and made additional payments totaling $189.

Despite maintaining separate finances, Violet contributed to their shared household in countless ways. She cooked main meals for the entire blended family during weekdays, creating stability and nurturing their home environment.

When their marriage ended, Lawrence challenged the property division, arguing that because he had made the down payment from his premarital assets, the entire homestead should be considered his nonmarital property. He wanted to deny Violet any share in the property’s significant appreciation—the home had more than doubled in value from $38,000 to $79,300.

Violet stood firm. She knew that despite Lawrence’s initial contribution, their marriage had created shared value that deserved recognition. The trial court agreed, awarding her a $19,489 mortgage interest in the homestead, representing her fair share of the equity increase and acknowledging her contributions to their joint investments.

When Lawrence appealed to the Minnesota Supreme Court, Violet faced the uncertainty of having her rights challenged at the highest level. But justice prevailed. In August 1981, the Supreme Court affirmed the trial court’s decision, establishing important precedent about how property with both marital and nonmarital components should be fairly divided.

The court’s ruling in Schmitz v. Schmitz created what became known as the “Schmitz formula”—a fair method for calculating each spouse’s interest when nonmarital funds are used to purchase marital property. This landmark decision ensured that contributions and shared growth during marriage are properly recognized, even when one spouse brings premarital assets to the relationship.

Violet’s victory represented more than just her individual case. Her willingness to stand up for fair treatment helped establish legal principles that continue to protect spouses today, ensuring that marriage partnerships are valued and that both parties receive equitable treatment when relationships end.

Through her perseverance, Violet demonstrated that every contribution to a marriage matters—whether financial, domestic, or emotional. Her case reminds us that true partnership means recognizing and honoring all the ways spouses build their lives together.

*This story is based on the true facts of the appellate court’s decision, but the personal experiences and emotions described are a fictional representation to bring the case to life.

Question: What do I need to show to prove that something I own is nonmarital property?

Answer: Property acquired during marriage is usually considered marital property unless you can prove it came from a nonmarital source with evidence like documents or testimony.

As set forth in the definitional section of Minnesota Statutes chapter 518, property acquired during the marriage is “presumed to be marital property….” Minn. Stat. § 518.003, subd. 3b. Because of this presumption, the burden of proof rests on the party making the nonmarital claim to show by a preponderance of the evidence that the asset is derived from a recognized nonmarital source. Wopata v. Wopata, 498 N.W.2d 478 (Minn. Ct. App. 1993); Freking v. Freking, 479 N.W.2d 736 (Minn. Ct. App. 1992). What may qualify as sufficient proof has been varied and unpredictable.

Question: Can gifts received during marriage be considered nonmarital property?

Answer: Yes, but you must prove the gift was given to you alone, not both spouses, and good documentation like gift tax returns helps.

Nonmarital claims are frequently based on gifts received during a marriage. In order to sustain such a nonmarital claim, the party asserting the claim must prove that the gift was to that party and not both spouses. See Olsen v. Olsen, 562 N.W.2d 797 (Minn. 1997). While the question may not have been considered at the time of the gift, when the now-divorcing spouses were happily married, parents who may have given undifferentiated gifts to the married couple frequently align with their child during a divorce. Because of this, family members’ testimony may be discounted as self-serving. Documentation such as gift tax returns and cancelled checks is often the best evidence in support of a nonmarital gift. Beyond this, circumstantial evidence may also support or damage the nonmarital claim. For example, if no gift tax returns are filed and the amount of the gift is in excess of the amount which could be claimed as an annual exclusion for gift tax purposes, an inference may arise that the gift is properly viewed as a marital gift to both spouses. In the end, the result will depend on the quality of documentation and advocacy, as well as the credibility of witnesses, when determining whether the donative intent was a gift to one or both spouses. See Blessing v. Blessing, Nos. A21-1709, A21-1725, 2023 WL 1093864 (Minn. Ct. App. Jan. 30, 2023) (citing Olsen, 562 N.W.2d 797).

Question: How are personal injury recoveries treated as marital or nonmarital property?

Answer: If the recovery is for personal injury like pain and suffering, it’s nonmarital; if it’s for lost wages or medical bills during marriage, it’s marital property.

In the case of a recovery received as a result of a personal injury, the actual purpose of the recovery must be proven. If the recovery is for an injury to the person—e.g., pain and suffering or disability—that recovery is nonmarital. If the recovery is for economic losses during the marriage—lost wages, medical expenses, etc.—the recovery is marital property. Van de Loo v. Van de Loo, 346 N.W.2d 173 (Minn. Ct. App. 1984). Proving the actual reason for the recovery can be difficult, especially years after the event. For example, in Anderson v. Anderson, No. C0-88-887, 1988 Minn. App. LEXIS 1138 (Minn. Ct. App. Nov. 22, 1988), the settlement agreement and release in the personal injury proceeding, which stated the recovery was for pain and suffering, was found unpersuasive because there was an actual loss of earnings. In Kotzenmacher v. Kotzenmacher, No. C1-94-549, 1994 Minn. App. LEXIS 866 (Minn. Ct. App. Aug. 30, 1994), the fact that the personal injury settlement agreement was sealed turned out to be fatal to the wife’s nonmarital claim.

Question: What if nonmarital funds get mixed with marital funds during marriage?

Answer: You don’t have to trace every dollar exactly, but you must show by evidence that the current asset came from nonmarital property.

Naturally, during the course of a marriage, spouses do not generally segregate funds that might later be claimed as nonmarital. When assets derived from a nonmarital source become mixed with assets acquired during the marriage, the party asserting the nonmarital claim must trace the current asset to its nonmarital source. The general rule is that there is no “strict tracing” requirement, but instead the party seeking to prove a nonmarital claim must only show by a preponderance of the evidence the asset was “acquired in exchange for nonmarital property.” Doering v. Doering, 385 N.W.2d 387 (Minn. Ct. App. 1986); Carrick v. Carrick, 560 N.W.2d 407 (Minn. Ct. App. 1997); Griffith v. Griffith, 415 N.W.2d 763 (Minn. Ct. App. 1987). The Minnesota Court of Appeals has actually reversed a district court for applying an overly strict standard of tracing where the district court denied a nonmarital claim because “there has not been a clear showing of which dollar went where.” Sundermeyer v. Sundermeyer, No. C7-90-675, 1990 Minn. App. LEXIS 877, at *6 (Minn. Ct. App. Sept. 11, 1990). A comparison of nonmarital deposits with marital deposits over several years has been held sufficient to sustain a substantial nonmarital claim. Shiely v. Shiely, No. C4-93-2396, 1994 Minn. App. LEXIS 369 (Minn. Ct. App. Apr. 22, 1994). In Shiely, the court of appeals upheld a simple percentage application based on the source of deposits, a method commonly used to prove nonmarital claims in accounts today.

Baker v. Baker, No. A06-1252, 2008 WL 5135117, at *4–5 (Minn. Ct. App. Dec. 9, 2008) calls into question the adequacy of the approach used in Shiely (a simple percentage application based on the source of deposits). On remand from the Minnesota Supreme Court, the court of appeals included dicta in its opinion suggesting that an asset-by-asset approach may be required when tracing a brokerage account. Baker, 2008 WL 5135117, at *4–5 (noting that a “portfolio” is not a species of property, quoting Warner v. Warner, 807 A.2d 607, 615–16 (Me. 2002)).

The Minnesota Court of Appeals affirmed a nonmarital claim in real estate despite acknowledging the proponent of the claim “was unable to specifically ascertain the source of the down payment.” Risk ex rel. Miller v. Stark, 787 N.W.2d 690, 697 (Minn. Ct. App. 2010). In Miller, the proponent of the claim was the personal representative of the wife’s estate. The wife died during the pendency of the proceeding, but after the district court had bifurcated to grant the divorce. The personal representative’s testimony that she was unaware of any source other than the wife’s nonmarital fund from which the down payment could have been made was deemed sufficient to trace the claim. Id. It may be important that the husband objected to, and may have attempted to delay, the bifurcated dissolution despite the fact that the wife was terminally ill with pancreatic cancer.

Question: Are there cases where tracing nonmarital funds is difficult or impossible?

Answer: Yes, if nonmarital money is so mixed with marital money that you can’t tell them apart, the whole amount is usually treated as marital property.

In Peppler v. Peppler, No. A09-86, 2009 WL 3818361, at *6 (Minn. Ct. App. Nov. 17, 2009), the Minnesota Court of Appeals affirmed the trial court’s finding that the husband’s nonmarital property interest was not traceable, noting that, “where the nonmarital money is so commingled with marital money that it is impossible to distinguish between the two,” all of the money is considered marital money. The court also noted that management fees and the tax liability arising from income and dividend distributions were paid entirely with marital funds, without considering that the income upon which taxes were paid was also marital.

Question: What happens if you fail to trace nonmarital funds properly?

Answer: If you can’t trace the nonmarital funds to other assets, the court may decide all the money is marital property.

In an unpublished opinion, the Minnesota Court of Appeals reversed a trial court’s finding that the wife was entitled to a nonmarital claim in her checking and savings accounts, stating that the wife failed to trace the initial nonmarital funds to other tangible assets that were purchased using those funds. Wallace v. Wallace, No. A13-2167, 2014 WL 4957380 (Minn. Ct. App. Oct. 6, 2014). In Wallace, the wife argued that a portion of funds in each of her bank accounts should be deemed nonmarital based on the balances at the time of the parties’ marriage, deposits and withdrawals made during the marriage, and the account balances at the end of the parties’ marriage. Id. at *1. The wife relied on an “accounting technique” in which she identified all deposits and withdrawals during the marriage, and to the extent that withdrawals exceeded deposits, she reduced the nonmarital interest in the account by that amount. Id. at *3. The court concluded that the wife’s accounting technique is not supported by relevant case law because it does not trace the nonmarital funds to another asset. Id. Accordingly, the court determined that all funds in the bank accounts were marital property and remanded the matter to the trial court for entry of an amended judgment and decree. Id.