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Woodbury Family Law Blog

Decision to keep family home following divorce can be detrimental

Dissolving a marriage is a complicated ordeal from both an emotional and a financial standpoint. Unfortunately, when it comes to finances, making emotionally charged decisions rather than logical ones can lead to personally unfavorable outcomes. One mistake that people in Minnesota often make during divorce is to hold onto the family home.

For many individuals, the family home is the place where they saw their children grow up. It is also their biggest monetary asset. In addition, they dedicated a lot of money, time and energy to keeping it in the best condition possible over the years. However, keeping the home in exchange for other marital assets can be one of the worst decisions a person can make while going through divorce.

Monetary tips may help those navigating divorce

The financial aspect of the dissolution of a marriage in Minnesota can unfortunately be difficult to navigate. Fortunately, specific steps may help people who are going through divorce to manage their money effectively. The more prudent they are from the start, the more likely they are to remain on solid financial footing long after the divorce process.

A particularly wise financial move during and after a divorce is to create a strong budget, including post-divorce expense and income information. Staying on track with the budget might certainly be challenging. However, the budget may give its creator an accurate look at his or her finances, which can help with making informed purchase decisions.

Divorce can have major monetary consequences

Ending a marriage is one of the toughest events that a person in Minnesota may experience. Not only can this process be difficult emotionally and mentally, but it can also be devastating financially. However, a couple of tips may help to make the financial aspect of divorce easier to deal with from start to finish.

For starters, it is wise for people who are dealing with property division in divorce to consider their options outside of keeping the marital home. Many individuals enter the divorce process with their hearts set on maintaining the family residence. However, it might actually be better for them to choose a liquid asset, like cash, over the home. In addition, selling the home may be the couple's only option if they have extensive household debt that must be satisfied.

Divorce trial is very different from settling divorce

When it comes to getting divorced, two individuals could opt to go to trial. Alternatively, they could attempt to reach an agreement on matters like property division through processes such as mediation or informal negotiations. Here are a couple of factors that are important to consider when deciding which divorce process option to choose in Minnesota.

The first key factor to take into consideration is time. The reason for this is that divorce trials could easily take at least a year. Meanwhile, two divorcing spouses may be able to arrive at a settlement agreement months after deciding to divorce. In light of this, an out-of-court settlement is a better option if two people would like to quickly finalize their divorce and thus move on with their independent lives. Still, divorce trial is the only option if the two parties cannot find common ground regarding their divorce issues.

Being respectful during divorce may offer personal benefits

When two people choose to get divorced, they may naturally be tempted to badmouth one another. However, speaking in a harsh manner about, or to, one another may end up harming their reputations, the dynamic of their family and their likelihood of having a positive divorce experience. Here is a rundown on the benefits of treating the other party with respect during a divorce proceeding in Minnesota.

First, not treating their future exes badly may help divorcing individuals to maintain lower stress levels. The more amicable a divorce proceeding is, the less anxiety they may feel, and the easier it will be for them to arrive at a mutually satisfactory settlement. In addition, the two parties' lives as co-parents after the divorce may be more pleasant.

Dividing assets can be challenging during the divorce process

Ending a marital union is far from a simple process emotionally. However, it can be just as daunting financially, particularly for couples who have high-value property. Here is a look at how the property division process works during a divorce proceeding in Minnesota.

Minnesota is an equitable distribution state, as are most states in the United States. This means that any assets that two married individuals have accumulated between their marriage and separation dates have to be divided in what a judge believes is a fair manner. As a result, one party may end up getting 70% of the assets, whereas the other party received 30% of them if they contributed less effort to attaining these assets.

How will my divorce affect my children?

Many divorcing parents are concerned about how their divorce may affect their children. Some parents are so worried about their kids that they decide to postpone their divorce, even if their situation makes them unhappy.

Every family’s situation is different, and the decision to divorce or not must be made on a case by case basis. However, parents who are weighing their options may benefit from learning how the experience could affect their kids.

Postnuptial agreement offers protection during divorce

Many couples in Minnesota opted to avoid a prenuptial agreement prior to walking down the aisle. Now, some are having second thoughts about this decision because it appears they may be headed for a divorce down the road. The good news? It is not too late to create this type of marital contract after the marriage. Postnuptial agreements are essentially prenups that are executed after the wedding day. 

A postnuptial agreement can address how the parties will divide their assets in the event that they get divorced in the future. This is an especially helpful agreement for those who have accumulated significant assets after tying the knot. For instance, perhaps an inventor's creation becomes increasingly popular, or a writer's novel becomes a bestseller. If these individuals increase their net worth rather quickly, a postnuptial agreement may come in handy for protecting their assets from their spouses as much as possible if divorce is inevitable in the future.

Divorce has an impact on 401(k) savings

Along with being emotionally challenging, the dissolution of a marriage can present financial hurdles. For this reason, individuals in Minnesota may worry about how the divorce process will impact their retirement funds and thus their ability to retire. Let's take a look at how divorce impacts 401(k) savings.

If two people decide to get a divorce, it is critical that they review their prenuptial agreement if they created one. This agreement highlights how the two parties' marital property, or shared property, will be divided during the divorce. However, if they did not develop this type of agreement before getting married, then the 401(k) funds of one individual have to be divided between both parties.

Financial planning is an important part of divorce planning

The rate of marital dissolution has dropped from around 50% around 40 years ago to about 39% now. However, divorce in Minnesota can still easily happen today if two spouses have irreconcilable differences. Unfortunately, divorce can be devastating from not only an emotional standpoint but also a financial one. Here is a rundown on what individuals who are going through divorce can do protect themselves financially in the years ahead.

First, it may behoove those going through marital dissolutions to consult financial planners early on. These professionals can assist divorcing spouses in understanding how much they own versus how much they owe. This is especially the case for spouses who were not active in overseeing their family finances, including paying bills, managing budgets, and contributing to investment or retirement accounts.

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