In re the Marriage of: Martin Sean Schmidt, petitioner, Respondent, vs. Julie Ann Schmidt, Appellant.

STATE OF MINNESOTA
IN COURT OF APPEALS
A20-0884
In re the Marriage of: Martin Sean Schmidt, petitioner,
Respondent,
vs.
Julie Ann Schmidt,
Appellant.
Filed June 21, 2021
Affirmed in part, reversed in part, and remanded
Johnson, Judge
Hennepin County District Court
File No. 27-FA-18-3253
Ben M. Henschel, Susan A. Daudelin, Henschel Moberg, P.A., Minneapolis, Minnesota
(for respondent)
Linda K. Wray, Twin Cities Legal Service, P.L.L.C., Edina, Minnesota (for appellant)
Considered and decided by Slieter, Presiding Judge; Johnson, Judge; and Hooten,
Judge.
SYLLABUS
1. In determining whether a spouse seeking spousal maintenance is unable to
provide adequate self-support through appropriate employment pursuant to Minnesota
Statutes section 518.552, subdivision l(b), a district court must consider the spouse's net
or after-tax income (rather than gross or pre-tax income) if there is evidence in the record
of the spouse's anticipated income-tax obligations and if the difference between the
spouse's gross income and net income may be determinative of the spouse's need for
spousal maintenance.
2. In determining the reasonable monthly expenses of a spouse seeking spousal
maintenance, a district court must account for regular contributions to a retirement-savings
account if making regular contributions to retirement-savings accounts was part of the
standard of living established during the marriage.
OPINION
JOHNSON, Judge
The primary issue in this appeal from the dissolution of a marriage is whether the
district court erred by denying the wife's request for spousal maintenance. She argues that
the district court's decision is based on erroneous findings concerning her income and
expenses. Specifically, she contends the district court erred by making findings of fact and
conclusions of law that do not account for her obligation to pay income taxes, her need to
pay health-insurance premiums, and the marital practice of making regular contributions
to a retirement-savings account. We agree that the district court erred and, thus, reverse
and remand for new findings and for reconsideration of her request for spousal
maintenance. But we conclude that the district court did not err in its valuation of two
financial accounts. Therefore, we affirm in part, reverse in part, and remand for further
proceedings.
FACTS
Martin Sean Schmidt and Julie Ann Schmidt were married in September 1996.
They have two teenage children. The parties separated in May 2017, and Martin petitioned
for dissolution of the marriage in May 2018. At the time of trial, Martin was an executive
at a large corporation, a position he had held since 2011. Julie Ann was employed as the
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principal of an event-planning business, which she founded in 2008 after working as a civil
engmeer.
The case was tried before a referee on two days in July 2019 and one day in
September 2019. The parties had agreed on custody and parenting time, and their
agreement was approved by the district court. The disputed issues at trial were spousal
maintenance, division of property, and child support. Martin, Julie Ann, and four other
witnesses testified. A total of 188 exhibits were received into evidence.
In December 2019, the referee filed a 64-page recommended dissolution decree,
which was approved by a district court judge. The district court denied Julie Ann's request
for spousal maintenance, equally divided the parties' marital property, and ordered Martin
to pay Julie Ann basic child support of$1,667 per month.
In January 2020, Julie Ann moved to amend numerous findings of fact and
conclusions of law or, in the alternative, for a new trial. In May 2020, the district court
denied the motion in substantial part, with the exception of a few minor amendments to
findings of fact.
In the decree, as amended, the district court made numerous findings of fact
concerning the parties' respective incomes and expenses. With respect to Martin, the
district court considered his base salary, incentive-based compensation, and investment
income and found that his gross annual income is $249,071, which equates to a gross
monthly income of $20,756. That fmding is not in dispute on appeal. The district court
found that Martin's reasonable monthly living expenses are $6,994. That finding also is
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not in dispute on appeal. Martin's gross monthly income exceeds his reasonable monthly
living expenses by $13,762.
With respect to Julie Ann, the district court considered the income she derived from
her business over a six-year period as well as expert testimony about the salary she could
earn in the marketplace and found that her gross annual income is $95,000, which equates
to a gross monthly income of $7,917. The district court found that Julie Ann's reasonable
monthly living expenses are $7,624. Julie Ann's gross monthly income exceeds her
reasonable monthly living expenses by $293.
Based on these findings, the district court resolved Julie Ann's request for spousal
maintenance as follows:
Wife's average monthly income exceeds her reasonable
monthly budget. And, to the extent that wife's self­
employment can result in "feast or famine" income streams,
the Court finds that Wife has an adequate property reserve to
absorb any fluctuations in her revenue stream. Accordingly,
Wife's request for spousal maintenance will be denied.
Julie Ann appeals.
ISSUES
I. Did the district court err by denying Julie Ann's request for spousal
maintenance based on findings of income and expenses that do not account for income
taxes, health insurance, and retirement savings?
II. Did the district court err in its valuation of two of the parties' financial
accounts?
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ANALYSIS
I. Spousal Maintenance
Julie Ann argues that, for three reasons, the district court erred by denying her
request for spousal maintenance. Specifically, she argues that the district court erred by
making findings of fact and conclusions of law that do not account for her obligation to
pay income taxes, her need to pay health-insurance premiums, and the parties' practice
during the marriage of making regular contributions to a retirement-savings account.
Spousal maintenance is defined by statute to mean "an award ... of payments from
the future income or earnings of one spouse for the support and maintenance of the other."
Minn. Stat. § 518.003, subd. 3a (2 0 20). "The purpose of a maintenance award is to allow
the recipient and the obligor to have a standard of living that approximates the marital
standard of living, as closely as is equitable under the circumstances." Melius v. Melius,
765 N.W.2d 411, 416 (Minn. App. 2009) (quotation omitted).
If a party requests spousal maintenance, a district court engages in a two-step
analysis. First, the district court must consider whether the spouse seeking spousal
maintenance either:
(a) lacks sufficient property, including marital
property apportioned to the spouse, to provide for reasonable
needs of the spouse considering the standard of living
established during the marriage, especially, but not limited to,
a period of training or education, or
(b) is unable to provide adequate self-support, after
considering the standard of living established during the
marriage and all relevant circumstances, through appropriate
employment, or is the custodian of a child whose condition or
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circumstances make it appropriate that the custodian not be
required to seek employment outside the home.
Minn. Stat. § 518.552, subd. 1 (20 20). The threshold inquiry asks, in essence, whether the
party seeking spousal maintenance has demonstrated a "showing of need." Curtis v. Curtis,
887 N. W.2d 249, 25 2 (Minn. 2016). A party demonstrates a need for spousal maintenance
if, considering the standard ofliving during the marriage, the party is unable to provide for
the payment of his or her reasonable expenses. See Doherty v. Doherty, 388 N.W.2d 1, 2-3
(Minn. App. 1986).
Second, if the party seeking spousal maintenance has "made a sufficient showing of
need," a district court will consider "the amount and duration of a maintenance award."
Curtis, 887 N.W.2d at 25 2. The award "shall be in amounts and for periods of time, either
temporary or permanent, as the court deems just, ... after considering all relevant factors."
Minn. Stat. § 518.552, subd. 2. The legislature has identified eight nonexclusive factors
for a district court to consider when setting the amount and duration of spousal
maintenance. See id. But no single factor is dispositive. Erlandson v. Erlandson, 318
N.W.2d 36, 39 (Minn. 198 2). In general, this court applies an abuse-of-discretion standard
of review to a district court's decisions concerning the amount and duration of an award of
spousal maintenance. Id. at 41.
A. Income Taxes
Julie Ann first argues that the district court erred by making findings of her gross
income but not her net income. She contends that the district court effectively ignored her
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obligations to pay federal and state income taxes and that, if her income tax obligations are
taken into account, she will not have enough money to pay her reasonable living expenses. 1
The statute governing spousal maintenance does not specify whether a district court
should focus on gross income (i.e., pre-tax income) or net income (i.e., after-tax income)
when determining whether there is a need for maintenance and, if so, its amount and
duration. The relevant part of the statute asks whether the spouse seeking maintenance "is
unable to provide adequate self-support ... through appropriate employment." Minn. Stat.
§ 518.552, subd. l(b). In general, an employed person is required by law to file an income­
tax return and to pay income taxes, unless the employee's income is below the applicable
income thresholds. See 26 U.S.C. §§ l(a)-(d), 60ll(a), 6012(a) (2018); Minn. Stat.
§ 289A.08, subd. l(a) (2020). An employed person's obligation to pay income taxes may
affect his or her ability to provide adequate self-support. Because an employee usually has
no choice but to pay income taxes, it usually is necessary for the district court to consider
a spouse's obligation to pay income taxes when determining his or her ability to provide
adequate self-support through employment.
Three supreme court opinions support this principle. In Erlandson, the supreme
court noted that the former wife's "monthly expenses exceeded her net take-home salary,
1 Julie Ann has included in her principal brief a statement as to whether this court's
opinion should be designated precedential or non-precedential. See Minn. R. Civ. App. P.
128.02, subd. l(f). She states that it "is not a settled matter" as to "whether a district court
has discretion to ignore income taxes an obligee must pay on her income when assessing
her need for spousal maintenance." Consequently, she suggests that the court issue a
precedential opinion. We appreciate the suggestion and take this opportunity to clarify the
law on the issue.
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thereby establishing that she is unable to support herself through appropriate employment."
318 N.W.2d at 39 (emphasis added). In Sejkow v. Sefkow, 427 N.W.2d 203 (Minn. 1988),
the district court determined the former wife's gross income and then "applied the
Wisconsin and federal tax tables and calculated her annual net income." Id. at 216
(emphasis added). The supreme court considered those findings in light of her reasonable
expenses and concluded that she "did not show that her living expenses exceeded her
spendable income." Id. (emphasis added). The supreme court also has considered the
effect of taxes on investment income for purposes of determining, pursuant to subdivision
l(a) of section 518.552, whether a spouse seeking maintenance has sufficient property to
provide for her reasonable needs. See Lyon v. Lyon, 439 N.W.2d 18, 22 (Minn. 1989)
("Even allowing for income taxes, the wife's net income will comfortably exceed her living
expenses .... "). In addition, this court has held that, when determining a spouse's ability
to pay spousal maintenance, a district court "must make a determination of the payor
spouse's net or take-home pay." Kostelnikv. Kostelnik, 367 N.W.2d 665,670 (Minn. App.
1985) (emphasis added), review denied (Minn. 1985).
In this case, there is evidence in the record concerning the amount of income taxes
that Julie Ann likely will be required to pay after the dissolution. Martin introduced an
exhibit indicating that, with a gross annual income of$95,000, Julie Ann would be required
to pay $16,634 per year (or $1,386 per month) in federal and state income taxes.2 That
2Julie Ann contends that a more accurate number is $17,401. She relies on a
document, labeled exhibit A, which she asserts was requested by the district court and
prepared by the parties' neutral financial expert but apparently not actually introduced into
evidence. The parties dispute whether the document is or should be part of the record on
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income-tax obligation obviously is consequential because the difference between Julie
Ann's gross monthly income of $7,917 and her reasonable monthly expenses of $7,624 is
only $293. Subtracting income taxes from her gross income would, by itself, make the
difference between a slight monthly surplus and a significant monthly deficit. We are
mindful that a district court has "broad discretion in deciding whether to award
maintenance," but a district court abuses its discretion if its decision "is against logic and
the facts on record." Curtis, 887 N.W.2d at 252; see also Madden v. Madden, 923 N.W.2d
688, 696 (Minn. App. 2019). In the circumstances of this case, the district court's failure
to consider Julie Ann's income-tax obligations when denying her request for spousal
maintenance is against logic and the facts in the evidentiary record.
Martin's counter-arguments are unpersuasive. He first contends that the district
court was not required to make a "precise" finding concerning Julie Ann's income. But
the estimated amount of Julie Ann's income taxes is not de minimis. See, e.g., Hesse v.
Hesse, 778 N.W.2d 98, 105 (Minn. App. 2009); Duffney v. Duffney, 625 N.W.2d 839, 843
(Minn. App. 2001). Julie Ann's income-tax obligation is estimated to be approximately
one-sixth of her gross income and nearl)' five times the difference between her gross
income and her reasonable monthly expenses. As already noted, accounting for her
appeal. Exhibit A is not dispositive of this court's resolution of Julie Ann's appeal. But it
may be material on remand to the district court's determination of Julie Ann's request for
spousal maintenance. Thus, on remand, the district court shall allow the parties to offer
exhibit A or an equivalent exhibit, and the district court shall consider the admissibility of
any such exhibit that is offered.
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income-tax obligations would, by itself, make the difference between a slight monthly
surplus and a monthly deficit of more than $1,000.
Martin also contends that Julie Ann's income taxes did not play an important part
in the district court's decision-making because the district court also considered her ability
to meet her reasonable needs through a combination of employment income and her
property award. See Minn. Stat. § 518.552, subd. l(a), (b). Martin presumably refers to
the district court's statement that, "to the extent that wife's self-employment can result in
'feast or famine' income streams, the Court finds that Wife has an adequate property
reserve to absorb any fluctuations in her revenue stream." The district court's findings do
not support the conclusion that Julie Ann could pay her reasonable monthly expenses and
her income taxes with a combination of employment income and investment income. Most
of the marital property awarded to Julie Ann does not appear to be income-producing or
capable of being converted to income-producing property. See Curtis, 887 N.W.2d at
253-57. The most valuable assets in Julie Ann's marital-property award are the parties'
marital home, IRA and Roth IRA retirement accounts, and the assets of her business, which
are necessary for her to generate income through employment. Julie Ann was awarded one
marital investment account with a value of only $4,372. She retained her non-marital
interest in an investment account valued at approximately $46,000, but that account
generated investment income of only $550 ( or $46 per month) in the one-year period before
the valuation date. Julie Ann also was awarded the parties' investment property, which the
district court found had a positive cash flow of $4,263 per year (or $355 per month). The
total amount of investment income from these assets falls far short of the amount of Julie
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Ann's income-tax obligations. And Julie Ann cannot be expected to invade the principal
of her marital-property award to pay her reasonable monthly expenses. See Curtis, 887
N. W.2d at 254; see also Honke v. Honke, N.W.2d _, __ , 2021 WL 2125821, at
*4 (Minn. May 26, 2021). In light of the evidentiary record, the district court's
determination that Julie Ann does not have a need for spousal maintenance cannot be
justified by her marital and non-marital property.
Martin contends further that the supreme court held in Maurer v. Maurer, 623
N.W.2d 604 (Minn. 2001), that a district court is not required to consider income taxes
when ruling on a request for spousal maintenance. The Maurer opinion is not concerned
with spousal maintenance and, thus, does not apply here; rather, it is concerned with
valuing assets when dividing marital property. See id. at 606-07. Even so, the Maurer
opinion does not give district courts unlimited discretion with respect to taxes. Rather, the
supreme court stated that consideration of tax consequences depends significantly on "the
evidentiary record," id. at 607, including evidence as to whether a taxable event is
sufficiently likely to occur, id. at 606. In the present case, it is highly likely that Julie Ann
will be required to pay income taxes on a gross income of $95,000. See 26 U.S.C.
§§ l(a)-(d), 6011(a), 6012(a); Minn. Stat. § 289A.08, subd. l(a).
Thus, the district court erred by making a finding of Julie Ann's gross or pre-tax
income but not making a finding of her net or after-tax income and, consequently,
determining her need for spousal maintenance without considering the effect of her
income-tax obligations.
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B. Health Insurance
Julie Ann next argues that the district court erred by making findings of her income
and her expenses without making any provision for her payment of health-insurance
premiums.
During the parties' marriage, Julie Ann was covered by a group health-insurance
policy that was provided by Martin's employer. Both parties submitted exhibits estimating
that Julie Ann would pay $500 per month for her health-insurance premiums. Julie Ann
testified that she intended to maintain health-insurance coverage through Martin's
employer by relying on COBRA and that the monthly premium would be $57 4. The referee
commented during trial that he wanted to be fully infonned about Julie Ann's COBRA
coverage so that her health-insurance expenses would not be overlooked. But in the decree,
the district court did not account for health-insurance premiums for Julie Ann, either as a
reduction of her gross income or as part of her reasonable monthly expenses. The decree
states that each party "shall be responsible for his or her own medical and dental insurance
coverage, and neither party shall have henceforth any obligation relating to the coverage
of the other party." Julie Ann brought the issue to the district court's attention in her motion
to amend and requested an amended finding that her reasonable monthly expenses should
include health-insurance premiums in the amount of $550. But the district court ruled on
her motion without specifically addressing the issue.
There can be no dispute that health insurance is a reasonable expense given the
parties' marital standard of living. Martin does not argue otherwise. Instead, he argues
that Julie Ann did not introduce sufficient evidence of the amount of the expense. That
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contention is without merit in light of Julie Ann's testimony that she had learned from
Martin's employer that she would need to pay $574 per month for COBRA coverage.
Martin also contends that the district court actually considered the issue and determined
that Julie Ann could pay the expense with other resources. But, as discussed above, Julie
Ann has limited income-producing assets. The estimates of Julie Ann's health-insurance
expenses are greater than the difference between her gross income and her reasonable
monthly expenses.
Thus, the district court erred by making findings of Julie Ann's rncome and
expenses without making any provision for the expenses of her health insurance.
C. Retirement Savings
Julie Ann also argues that the district court erred by making a frnding of her
reasonable monthly expenses without including regular contributions to a retirement­
savings account.
During the parties' marriage, they regularly saved for retirement. Specifically,
Martin elected to have the maximum amount allowed by law ($18,50Q in 2018) deducted
from his paychecks and deposited into a 401(k) account. See 26 U.S.C. §§ 402(g), 414(v)
(2018). That 40l(k) account was deemed a marital asset, and it was worth approximately
$360,000 on the valuation date.
Martin submitted an exhibit estimating that, in the future, he would contribute
$19,000 per year to a 40l(k) account, and Julie Ann would contribute $6,500 per year to a
retirement-savings account. Julie Ann submitted an exhibit proposing that her budget
allow for contributions of $14,250 per year to a retirement-savings account. In the decree,
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the district court did not make any provision for Julie Ann to make contributions to a
retirement-savings account.
In detennining whether a spouse seeking spousal maintenance is capable of self­
support, a district court must consider "the standard of living established during the
marriage." Minn. Stat. § 518.5 52, subd. l(a)-(b). If the party seeking maintenance
establishes a need for maintenance, a district court must consider, among other factors, the
"retirement benefits ... forgone by the spouse seeking spousal maintenance," if any. Id.,
subd. 2(e). In Kampf v. Kampf, 732 N.W.2d 630 (Minn. App. 2007), review denied (Minn.
Aug. 21, 2007), the district court found that the spouse seeking spousal maintenance had
reasonable monthly expenses of approximately $9,000, of which approximately $700 was
allocated to savings, including retirement savings. Id. at 632. On appeal, the maintenance
obligor argued that the district court erred by including savings in the obligee's reasonable
monthly expenses. Id. at 634. This court affirmed with respect to that issue, reasoning as
follows:
Id.
[T]he record shows that the parties accumulated substantial
savings, investment, and retirement accounts in excess of
$340,000 throughout their 28-year marriage. On this record,
we hold that the parties' savings and retirement planning were
an integral part of their standard of living during the marriage.
Accordingly, the district court did not abuse its discretion by
including savings expenses in [the obligee's] reasonable
monthly expenses. Further, because the record supports the
amount of the savings expenses allowed by the district court,
the figure of $693 per month is not clearly erroneous.
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The facts of this case are similar to those of Kampf The parties prudently made
regular contributions to a tax-favored retirement-savings account. It was well within their
means to do so given the significant surplus in their household budget. We are mindful
that a district court has discretion to determine the marital standard of living and to
determine reasonable post-dissolution expenses according to that standard of living. See
id.; Curtis, 887 N.W.2d at 252. But in this case, the evidentiary record is unequivocal with
respect to retirement savings. The parties consistently set aside significant amounts in a
tax-deferred retirement-savings account. Accordingly, saving for retirement was "an
integral part of their standard of living during the marriage." See Kampf, 732 N.W.2d at
634. In such a situation, there is no logical reason to not include retirement savings in the
parties' respective monthly budgets.
Martin contends that the district court treated the parties alike in that it did not
provide for retirement savings for either party. This contention is inconsistent with the
dissolution decree. The district court made an express finding that it would not reduce
Martin's gross income to account for his contributions to his 401(k) account. That finding
was required by a statute providing that contributions to a 401 (k) account must be excluded
from the calculation of gross income. See Minn. Stat.§ 518A.29(a) (2020); see also Sinda
v. Sinda, 949 N.W.2d 170, 175 (Minn. App. 2020). But that finding does not preclude a
finding that contributions to a retirement-savings account are included in a party's
reasonable expenses. The district court noted that regular contributions to a retirement­
savings account is one of the "things Husband may elect to do with his income after he has
earned it." In essence, the district court found that Martin could and likely would make
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regular contributions to a retirement-savings account. Martin can afford to do so given the
relatively large difference between his income and his reasonable monthly expenses. But
the absence of any finding with respect to Julie Ann means that she is unable to make
regular contributions to a retirement-savings account, even though making such
contributions was a regular practice during the marriage.
Given the evidence in the record, the district court erred by not including regular
contributions to a retirement-savings account in Julie Ann's reasonable monthly expenses.
D. Summary
In sum, we reverse the district court's denial of Julie Ann's request for spousal
maintenance, and we remand for reconsideration. On remand, the district court shall
account for Julie Ann's income-tax obligations by making a finding of her net, after-tax
income in addition to the finding of her gross, pre-tax income. The district court also shall
amend its finding of Julie Ann's reasonable monthly expenses by accounting for the
expenses of her health insurance and regular contributions to a retirement-savings account.
After making new findings concerning Julie Ann's net income and reasonable monthly
expenses, the district court shall reconsider Julie Ann's request for spousal maintenance
pursuant to subdivision 1 of section 518.552 and, if appropriate, shall proceed to the
analysis required by subdivision 2. See Curtis, 887 N.W.2d at 257; Passolt v. Passolt, 804
N.W.2d 18, 25 (Minn. App. 2011), review denied (Minn. Nov. 15, 2011).
We note that Julie Ann also requests that this court instruct the district court to
require Martin to obtain life insurance to secure the spousal-maintenance obligation that
she seeks. See Minn. Stat.§ 518A.71 (2020). We need not address that argument because
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we are not awarding spousal maintenance. Rather, we are remanding to the district court
for reconsideration of Julie Ann's request for spousal maintenance in light of amended
findings of fact. On remand, Julie Ann may renew her argument for life insurance as
security for any award of spousal maintenance.
II. Valuation of Property
Julie Ann also argues that the district court erred in two ways in its valuation of
marital property. A district court has broad discretion in dividing marital property.
Grigsby v. Grigsby, 648 N.W.2d 716, 719 (Minn. App. 2002), review denied (Minn. Oct.
15, 2002). "Detennining the specific value of an asset is a finding of fact," and such
findings "shall not be set aside unless clearly erroneous on the record as a whole." Maurer,
623 N.W.2d at 606 (quotations omitted).
A. Martin's Investment Account
First, Julie Ann argues that the district court erred by reducing the value of Martin's
Fidelity investment account by the amount of the capital-gains taxes that he will owe after
selling appreciated shares of stock.
In general, a district court has discretion to consider future tax consequences when
valuing and dividing marital assets. Maurer, 623 N.W.2d at 606-07. A district court
generally should account for taxes if a taxable sale of an asset "is required or is likely to
occur within a short time after the dissolution." Aaron v. Aaron, 281 N.W.2d 150, 153
(Minn. 1979). A district court does not abuse its discretion by considering future tax
consequences if there is "a reasonable and supportable basis for making an informed
judgment as to the [account owner's] probable liability." Maurer, 623 N.W.2d at 608 n.3
17
(quotation and alteration omitted). The scope of a district court's discretion necessarily
depends on the evidentiary record. See id. at 607.
In this case, the Fidelity investment account was worth $500,064 on the valuation
date. The parties' neutral financial expert calculated that Martin would incur capital-gains
taxes of $70,219 ifhe sold the shares soon after the dissolution. The district court valued
the account at $429,845, which fully accounts for the capital-gains taxes identified by the
neutral financial expert.
Julie Ann contends that the evidence does not support the premise that Martin must
sell the stock after the dissolution. She contends that it is uncertain whether Martin will
make a down payment to purchase a home. She acknowledges the evidence that Martin
intends to pay down debt but notes that the amount of the debt is only $65,000. She asserts
that the evidence is speculative as to whether Martin will liquidate some of the stock and
insufficient to prove that he will need to liquidate all of the stock. In response, Martin
refers to his testimony that he was planning to buy a home and that he estimated the down
payment to be at least $275,000 and preferably more. He also asserts that he will need to
use the account to pay the capital-gains tax itself. He notes that the district court considered
future tax consequences when valuing other marital assets.
In light of the evidentiary record, the district court did not abuse its discretion when
it considered the future tax consequences of Martin's anticipated sale of stock in the
Fidelity investment account. The evidence supports an implied finding that Martin will
liquidate at least $340,000 of stock. Included in that amount is Martin's estimate that he
will make a down payment of $275,000 on a new home. Because Julie Ann was awarded
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both the marital home and the parties' rental property, Martin was required to find another
home. His purchase of a home would be consistent with the marital standard ofliving, and
he testified that he would like to use as much of the funds in the account as possible when
making a down payment. In addition, he likely will use the proceeds of selling stock to
pay the capital gains tax. Furthermore, Martin was required to make an equalizer payment
to Julie Ann in the amount of approximately $66,000, which reduced his liquidity. All of
this evidence indicates that Martin is likely to sell all or nearly all of the stock in the
account. The district court's treatment of the account is consistent with the principle that
"property valuation is necessarily an approximation in many cases, and it is only necessary
that the value arrived at lies within a reasonable range of figures." See Maurer, 623 N.W.2d
at 608 ( quotation omitted).
Thus, the district court did not abuse its discretion by accounting for capital-gains
taxes when valuing the Fidelity investment account that was awarded to Martin.
B. Julie Ann's Business Checking Account
Julie Ann argues that the district court erred in its valuation of a business checking
account that was awarded to her. Specifically, she argues that the district court erred by
not adjusting the value of that account based on the fact that, shortly before the valuation
date, she paid a marital debt by writing an $8,000 check, which cleared the account shortly
after the valuation date, thereby benefitting Martin by $4,000.
In response, Martin notes that the parties had more than a dozen bank accounts and
that funds flowed in and out of the business checking account both before and after the
valuation period. He also asserts that he is not responsible for any disadvantage Julie Ann
19
experienced because she decided when to write the check. He notes further that Julie Ann
did not introduce any evidence at trial about this particular check and did not raise the issue
until her post-trial motion to amend, at which time the evidentiary record was closed. See
Grigsby, 648 N.W.2d at 726.
A district court "shall value marital assets" as of the date of the prehearing
settlement conference, a different date agreed upon by the parties, or a valuation date
specified by the district court. Minn. Stat. § 518.58, subd. 1 (2020). A district court may
adjust the value of a marital asset only in limited circumstances: "If there is a substantial
change in value of an asset between the date of valuation and the final distribution, the
court may adjust the valuation of that asset as necessary to effect an equitable distribution."
Id.
In this case, the parties agreed to a valuation date of June 30, 2018. To establish
that the district court erred, Julie Ann must, at a minimum, show that there was "a
substantial change in value of' the checking account. See id. Martin points to evidence
that the balance of the account fluctuated substantially. He states that the balance was
approximately $88,000 one month before the valuation date, was approximately $71,000
on the valuation date, and was approximately $80,000 one month after the valuation date.
He also states that, in the one-month period before the valuation date, there were
withdrawals of approximately $29,000 and deposits of approximately $12,000. In context,
the $8,000 debit to the account shortly after the valuation date was not a substantial change
in the value of the account. See id. Furthermore, there is no evidence in the record
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concerning the change in value "between the date of valuation and the final distribution."
Id.
Thus, the district court did not err by denying Julie Ann's request to adjust the value
of her business checking account.
DECISION
The district court erred by denying Julie Ann's request for spousal maintenance
based on findings of her income and expenses that do not account for her income-tax
obligations, her health-insurance expenses, and her regular contributions to a retirement­
savings account. Accordingly, we reverse and remand for new findings and for
reconsideration of Julie Ann's request for spousal maintenance. The district court did not
err in its valuation of Martin's Fidelity investment account or Julie Ann's business
checking account.
Affirmed in part, reversed in part, and remanded.
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