Call Today for a FREE Consultation
Toll Free: 800-585-1385
Local: 763-200-5754

Anoka Divorce Law Blog

What business owners should consider during a divorce

When business owners in Minnesota get divorced, dividing company assets can be a challenging process. The initial step in the process is figuring out how much the company is worth. A valuation professional should be granted access to the company's financial records and any other information needed to figure out its true market value. Once it has been appraised, it may be necessary to determine how much of the company's growth took place during the marriage.

Generally speaking, a spouse is not allowed to be compensated twice based on a single asset. Typically, a person is allowed to either receive maintenance payments based on income an owner generates from the business or get compensation as an officer of the company. To determine what may be considered reasonable compensation, an appraiser will have to decide how much revenue the company creates and what type of expenses it has.

Student debt often cited in divorce cases

Higher education costs have risen sharply in Minnesota and around the country in recent years, and student loan debt in the United States has climbed to an all-time high of $1.48 trillion as a result. Figures from the U.S. Federal reserve reveal that students who graduated from college in 2017 will have to repay an average of $39,400, and this debt can have a profound impact on their lives and relationships. When researchers from the debt management website Student Loan hero polled 808 divorced American adults, more than a third said that student loans and other financial problems had contributed to the breakdown of their marriages.

More than one in 10 of the respondents said that student loan debt was the primary reason they divorced. Experts expect this trend to continue unabated in the years ahead as the average outstanding student loan balance has increased by a sobering 62 percent in just 10 years. Equally concerning is that college costs have been rising faster than the rate of inflation since the early 1980s.

Child support and joint custody: what parents need to know

Child support obligations are usually determined by the regulations found in the Child Support Standards Act, but that all changes with joint custody. When parents share custody of a child, a variety of additional factors will need to be taken into consideration. In the state of Minnesota, a very specific formula is used to determine how much a parent will pay in child support if custody is shared.

If one parent is designated as the primary caregiver, then the other parent will almost always be required to pay child support. The judge must consider a few different variables including the income of both parents, the age of the child and how much time the child is going to spend with the primary caregiver. Once every few years, the parents can revisit the agreement to see if any changes need to be made to the child support obligations.

Parenting agreement may make marital breakup easier on the kids

Going through divorce can certainly be challenging for adults, but it can be just as unsettling for any children involved. After all, just as you may feel that your world is spinning out of control during a divorce, your child may feel powerless and apprehensive about his or her future.

However, many cases involving child custody during a marital breakup can be resolved outside of court. Here is a look at the valuable role that a parenting agreement can play in your divorce proceeding in Minnesota.

Why more millennials are opting for prenuptial agreements

Couples in Minnesota in the 18-to-34 age group might be more likely to want a prenuptial agreement compared to couples in the same age group in the past. Attorneys report an overall rise in the number of prenups, but a more recent millennial surge appears to have several causes.

One reason is that millennials are marrying later than their counterparts in previous generations. This means they have had more time to build their retirement accounts, buy a home and make investments. They may be concerned about keeping those assets in case of divorce, and a prenup is one way to protect them. Other millennials are saddled with debt. Student loan debt is particularly high in this age group, and in 2017, college graduates had an average of $38,000 in student loan debt. A future spouse might be concerned that if there is a divorce, debts could be split between the two of them. The prenuptial agreement may prevent this.

The financial challenges faced by divorced women

Ending a marriage usually involves making a number of financial adjustments. A recent study from the online marketplace Worthy suggests that many divorced women in Minnesota and around the country are not prepared to meet these challenges. Worthy polled 1,785 women who were either considering a divorce or had already taken steps to end their marriages, and almost half of them said that they had encountered one or more unexpected financial setbacks.

Experts say that women are sometimes unprepared for life after divorce because they allowed their husbands to make financial decisions during the marriage. In the survey, almost a quarter of the women aged between 18 and 54 said that they abdicated control of their financial affairs to their husbands. However, this figure dropped to 18 percent among women 55 years of age or older.

A lack of communication over finances can lead to divorce

Many Minnesota couples may be aware that the divorce rate in the United States has been approximately 50 percent for some time. While there are many reasons why couples get divorced, one of the most common is the lack of communication when it comes to family finances.

There are several causes behind poor communication when it comes to money issues. In some cases, for example, one spouse might take the family finances as their responsibility. This may mean that they create the budget and are responsible for paying the mortgage and any other bills. This can leave the other partner in the dark when it comes to how much in savings the couple may have. In some cases, either spouse may open credit cards or make large purchases without consulting the other person, putting stress on the family.

Altering an estate plan to account for a divorce

After going through a significant life event, a Minnesota resident should review the details of their estate plan. A divorce qualifies as a significant life event, and there are many items that may need to be revised in its aftermath. For instance, an individual will want to change their power of attorney to ensure that a former spouse doesn't have the ability to access key documents.

Individuals who are going through a divorce may also want to change their health care proxy. This prevents a former spouse from making health care decisions after a critical accident or other medical emergency. It is important to understand that beneficiary designations may be frozen as soon as a person files for divorce. This means that the soon-to-be ex could still be the beneficiary of a 401(k) or other asset if something were to happen during the divorce process.

Here is what to expect regarding spousal maintenance in Minnesota

You and your spouse have decided to call it quits, and you feel a sense of relief. At the same time, though, you feel anxious about how you will support yourself following the divorce.

Fortunately, you may be eligible to receive spousal maintenance, which may help you to stay afloat financially following your marital breakup. Here is a look at how courts handle spousal maintenance, also known as alimony, in Minnesota.

Preparing for retirement while dealing with divorce

In Minnesota and across the country, the divorce rate has become relatively steady for most Americans. However, in one demographic category, it has continued to rise significantly: those at the age of 50 and above. Indeed, between 1990 and 2010, the divorce rate more than doubled among this group, a trend that has continued since that time. This can be a particular concern when it comes to the financial effects of divorce, especially because there is less time to recover from those changes prior to retirement.

In particular, retirement funds and accounts are often the single largest assets up for division during the end of a marriage. After the divorce is finalized, people have less time to rebuild their individual accounts. Nevertheless, "gray divorces" continue to grow, in many cases because the issues that underlie these separations are often severe. The financial considerations that accompany divorce can be significant for people of any age, and it can be important to consider retirement planning during the negotiations that precede a divorce settlement. While this can be most apparent to older people, a study from the Center for Retirement Research at Boston College found that the retirement readiness of people who divorce at any age can also be affected.

Marvin Law Office, L.L.C.

Firm Location:

Marvin Law Office, L.L.C.
2150 Third Avenue North
Anoka, MN 55303

Toll Free: 800-585-1385
Phone: 763-200-5754
Fax: 763-427-1178
Anoka Law Office Map

Firm Numbers: