In Minnesota, receiverships may be used to manage or sell a couple’s marital assets in divorce cases. The cost of the receivership, including the receiver’s fees, is paid by the assets under the receivership. However, the party who requested the receivership will be responsible for the costs if the couple’s assets are insufficient to cover them.
An experienced family law attorney can guide you through the Minnesota divorce process. They will handle all aspects of your case, including determining whether a receivership is necessary.
What Are the Costs of a Receivership?
The direct costs of a receivership include the receiver’s fees, the attorney’s fees for the receiver, and miscellaneous costs the receiver incurs to manage the assets. For example, if the marital home is placed under receivership, the receiver’s fees and expenses will likely be deducted from the home sale proceeds. However, if the couple has insufficient home equity, the spouse initiating the receivership will likely be responsible for the balance.
Who Serves as the Receiver?
The Court appoints the receiver. However, the party requesting the receivership can recommend one. The Court will evaluate specific factors when considering who to appoint as a receiver, including whether the requested individual has the requisite experience and financial expertise to handle the position and whether they can post a receiver bond to secure their performance of the receiver duties. The receiver’s role can vary depending on what duties the Court requests them to perform. For example, the Court may charge them with safeguarding marital property before the Court divides it.
Why May You Need a Receiver?
An example of circumstances in which a receivership may be necessary is if the couple jointly owns real estate. If the property is at risk of being foreclosed because one spouse failed to pay the mortgage, the Court may appoint a receiver to take over the property. Or if the couple is in business together but the company is at risk of failing due to mismanagement by one spouse, the Court might appoint a receiver to manage the business and preserve it before the Court divides the property.
Another situation when a receivership may be warranted in a divorce case is if there is a risk of one of the spouses concealing assets, such as rental payments from real property the couple owns. Minnesota also appoints receivers to help facilitate payment of a judgment, sometimes in the case of an unpaid child support obligation.
What Are the Alternatives to a Receivership?
Because receiverships can be costly and time-consuming, the Court will explore other options to assist the divorcing spouses, such as requiring parties to submit their financial information for review or issuing orders prohibiting the sale of property or a business. On the other hand, they may order the sale of a property so they can equitably split the sale proceeds between the parties. Sometimes, such court action is necessary when informal negotiation between the parties is unsuccessful or mediation fails. Though typically a last resort, the Court may, at its discretion, determine that a receivership is necessary so it will appoint the receiver who must report to it as required.
Contact Jaspers, Moriarty & Wetherille, P.A. Today
If you are ready to file for divorce, contact a skilled and knowledgeable family law attorney from Jaspers, Moriarty & Wetherille, P.A. We understand this can be a challenging time for you and your family, and we want to help. From answering questions about child support to helping you seek the equitable property division you deserve, we will assist in all aspects of your case. Contact us today for a confidential consultation.