On
behalf of Askvig
& Johnson, PLLP
It is
unfortunate that sometimes divorce comes with financial surprises for those
involved. This may be especially true if a spouse in Minnesota was not fully
aware of their financial situation and assets prior to a divorce. However,
there are ways to stay financially savvy both during and after the divorce
process.
One of
the first steps each spouse should take is to separate their finances. Open new
individual bank accounts and close any of those that were once held jointly.
The same can be said for credit card accounts. This can be important not just
so that each party can provide for themselves financially following a divorce,
but also so that they are not unfairly forced into paying joint debts incurred
after filing for divorce but before the process comes to an end.
All of
this can be emotionally draining. That is why it is important to focus on
fairness and getting the job done. Harboring revenge or resentment will not
make the property division process an easy one. Making a budget and sticking to
it is one way to stay focused on one's financial goals.
In
addition, each spouse should make sure they have a complete understanding of
how the divorce will affect their taxes. For example, after the divorce a
spouse's income may change placing them into a different tax bracket. If spousal maintenance is being paid, these payments may be
considered taxable income. In addition, if children are involved only one
parent may claim them as an exemption on their tax returns.
Any
financial decisions made during the divorce process can have long-lasting effects,
regardless of whether the couple is going through a contested divorce or an
uncontested divorce. By staying abreast of one's financial situation, it is
possible to walk out of the divorce process on the right foot.
Source: ABC
News, "How to Protect Your Finances in a Divorce," AJ Smith, March 31, 2014
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