It is easy to make generalized statements about divorce. One common assertion about this subject is that it is inherently stressful. It can be, but no two cases are the same, so an individual examination of your situation is necessary.
Divorce in Minnesota often does mean drastic life changes that can send individuals into crisis mode. However, by enlisting experienced legal counsel dedicated to providing strong guidance, it is possible to reduce potential anxiety and maintain a positive focus in planning for the next chapter of life.
Realistic financial planning is crucial
One general statement it is safe to say about divorce is that it will involve money issues. This is certainly true when children are involved. While two-income families are quite common, there are still many situations when one parent stays home with the children while the other works.
Regardless of status on that front, divorce is going to mean some economic shifting. That’s because the collective income supporting the family under one roof now must pay for two households. To make it work, many experts recommend divorcing couples take control through disciplined planning. Steps they say to consider would include:
- Create a budget: Even if you were operating under a budget before, it’s likely to be more important than ever after divorce. Focus on covering immediate needs, not wants. Where spousal support is a factor, take into account the long-term implications, including that support might end on a known date in the future.
- Sensible handling of the marital home: There are many different ways to handle the marital home upon divorce, including one spouse keeping the house indefinitely, one spouse keeping the house until the children move out, selling it and splitting any proceeds, or something else that might meet a family’s needs. But with each option, there are many issues to consider. If one spouse keeps the house, how will the mortgage and maintenance be paid? Also, unless the mortgage is refinanced or assumed, there is still a potential liability for both spouses for years to come. How might the spouse keeping the house compensate the other for its value? How will the proceeds be split? What happens to any nonmarital interest in the home?
- Know what you have: What do you own? What does your spouse own? If you bought an asset together, how will it be valued for equitable division? Accounting of tangible and liquid assets is important, but so is an accounting of less tangible things, such as retirement funds and life insurance.
- Be aware of tax implications: Some assets may come with a tax liability. Sell a property or cash in investments and face possible capital gains taxes. It’s important to know what an asset’s after-tax value will be before accepting it as part of the divorce.
Whatever the situation, finding optimal solutions that meet your needs is easier with a knowledgeable attorney’s help.