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Divorce and money interests

| Oct 27, 2016 | Divorce

Although money can be one of the leading reasons why a Minnesota couple divorces, ending a marriage can amplify the issue even as resolutions are sought. There are several important financial areas that are tackled during divorce negotiations, and it is helpful to have an awareness of these matters prior to beginning the process. Failing to think carefully about finances could lead to long-term challenges.

Minnesota law provide guidelines for distributing property obtained by either party during the marriage. The goal is to ensure that both parties complete the process in a manner that fairly distributes assets. However, this can be complicated if personal funds and assets have been combined for issues such as buying a home. Debts are also important during a divorce as any loans, credit accounts, or other agreements signed during marriage could still remain in place after a divorce. It may be necessary to close joint credit accounts to protect one’s interests going forward. Further, it is important to realize that a responsibility to pay does not imply that the ex-spouse will follow through. Clarity is essential in these matters.

One’s tax status may change after a divorce, which means that it is important to consider issues such as federal tax withholding changes. Further, it is important to think carefully about types of retirement accounts that might be sought or offered in a settlement. Those funded with pre-tax dollars could carry huge federal income tax costs as the funds are accessed in the future. Child support is another important financial issue during divorce proceedings, an issue that will particularly affect a non-custodial parent in most instances.

An individual seeking a divorce might not be dissuaded by negative financial implications. However, a divorce lawyer can help a client to evaluate financial priorities prior to beginning negotiations with the other party.

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