Divorcing spouses are often presented with a jumble of choices, not the least of which relate to marital property and debts. This may be especially true for older spouses seeking to dissolve a second or third marriage.
Minnesotans faced with the task of equitably dividing marital property should keep in mind that marriage and divorce are closely knitted with estate planning, and negotiating for a favorable divorce settlement will require a careful analysis of an individual’s financial goals now and in the future.
To achieve the best possible outcome and protect against unwanted surprises, divorcing spouses need to be fully aware of which assets and debts are subject to property division. For example, do you or does your soon-to-be ex have a tax-deferred retirement plan such as a 401(k) or an IRA? Retirement accounts are often subject to property division, and sometimes it is preferable to receive funds from such an account instead of taking ownership of other items such as the marital home.
Some people also forget to update their retirement accounts and other estate planning documents to reflect a change in marital status. In some cases, not covering these important bases has led to ex-spouses and former in-laws receiving assets that might have otherwise gone to a more deserving party.
Negotiating for a fair and equitable divorce settlement may involve anything from insurance policies to art works and jewelry, and Minnesotans who want to protect their financial future would be wise to get an accurate valuation of assets and debts.
Source: Huffington Post, “Financial Tips That Ease the Sting of Divorce,” Julian Block, Dec. 25, 2013