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Financial concerns during a divorce

One of the most important parts of a divorce proceeding is the distribution of marital assets between the two spouses. This is important for a couple of reasons. It sets up your finances for your post-marriage life and will become your new economic footing. The process may be relatively straightforward or it can be very complex, depending on your financial status immediately prior to your divorce.

It will include collecting all of your assets, and determining if they are marital property or are separate property. This process will also include an examination of all of your marital debts and with the help of your attorney, you should carefully identify these debts and how they should be divided as part of the property division. 

 

For instance, if you have a mortgage on the family home, both parties will need to decide if either wishes to keep the home and if so, if that party can afford to buy the other party out of the mortgage. They would also need to refinance the mortgage, which can be challenging after a divorce.

The other significant reason this process is important is that it is difficult to undo or seek a modification. Unless you can prove the other party engaged in fraud during the property division, a court in Minnesota is very unlikely to reopen this determination.

Another element of your property division that must be considered is pension and retirement accounts. If either spouse has a pension that accrued during the time they were married, a portion of it will be the property of the other spouse.

And the potential effect of taxes on all of these transactions should be calculated into the final property settlement. Receiving a substantial and unexpected tax bill for some assets you obtained in the divorce can be more than a little unpleasant.

You want to be certain your property division provides a strong economic foundation for your future, not the potential for financial quicksand.

Source: credit.com, "Who Gets the Retirement Accounts in a Divorce?" AJ Smith, November 16, 2015 

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