Fighting over money is one of the top reasons cited for divorce. So it makes sense that fighting for spousal support would cause consternation when dealing with an already emotionally-charged issue of divorce. If you are ready to file for divorce, consider how to manage financially during the separation as well as after the finalized divorce. Don’t make the mistake of trying to be the “nice person,” or martyr by giving up much-needed spousal support. Enlist the help of a Minneapolis spousal support lawyer who pursues a fair and reasonable amount based on the length of your marriage and other factors. According to an article by thestreet.com, there are several ways a person can manage their life post-divorce.
Addressing the health insurance issue
Some people are so consumed with a divorce and paying the basic mortgage payment and utility bills that they neglect other important factors such as health insurance. If you are covered under your spouse’s company health insurance plan, it’s important to discuss the issue as part of a divorce. In some cases, it makes sense to elect COBRA coverage for up to 36 months, and in other cases it is cost prohibitive to elect COBRA. The cost of health insurance is an important factor in determining your financial need. Also, the courts will look at your education, training and ability to obtain employment as well as the standard of living to which you were accustomed to having during the marriage.
Reviewing any other plans or documents that could affect your decree or post-decree
As part of the divorce, it’s important to look at whether there are any estate documents that could affect your divorce. Depending on the situation and whether you signed prenuptial agreements, the spousal maintenance you may receive could be impacted as well as any property division issues. Make changes to important documents such as power of attorney that gives another person the ability to make important decisions if you become ill or incapacitated and have a Will prepared or look into revisions on your current Will.
Organizing all of your documents
After the divorce, you will have a decree that explains how assets are divided. While the divorce is in process, gather together all financial documents such as checking, savings, 401(k), Roth IRA, investment accounts and titles to homes or mortgage statements. If you do receive a Qualified Domestic Relations Order or QDRO that entitles you to an interest in a spouse’s retirement account, you can likely roll over the distribution into a tax-free account in your own name. Other important property items to review include vehicles, jewelry, boats and collectibles.
Changing your name
Some women wonder whether they should change their name after a divorce. Typically people revert back to a maiden name. When it comes to financial planning after a divorce, try to wait until the assets are transferred before completing the name change with the Social Security office (at times this may not be possible). Changing your name back to your maiden name in no way disqualifies you from receiving Social Security benefits based on your spouse’s work history if you remained married for at least 10 years.
Considering potential tax ramifications
Experts with thestreet.com point out potential tax consequences related to divorce. If you receive a taxable investment that does not fall under the retirement investment umbrella, estimate the unrealized capital gains or losses. If you have to sell a home as part of the divorce, you may or may not have to pay capital gains taxes. Alimony tax changes due to recent tax reform could impact some divorcing couples, according to a piece by cnbc.com. The Tax Cuts and Jobs Act changed a few rules so divorces after Dec. 31, 2018 will deal with different tax situations than before. Alimony will no longer be deductible for the payor for divorces commenced after December 31, 2018, and taxes don’t need to be paid on the spousal support if you are the recipient. All tax ramifications should be discussed with an accountant as well as with your attorney.
Financial experts point out a divorce has the greatest impact on an individual’s finances. Don’t feel too intimidated to go for spousal maintenance in Minnesota whether it’s temporary or permanent maintenance. With alternative dispute resolution (“ADR”) methods, it’s possible to find mutually agreeable ground without entering the courts. For many people, the less adversarial path through mediation or a collaborative practice divorce creates the best results.
At Beckman, Steen & Lungstrom, we put families first as we guide you through the legal process. We provide strong legal representation as Minneapolis family law attorneys specializing in matters such as custody, child support and spousal support. For more information on retaining a Minneapolis spousal support lawyer for even the most challenging case, please contact us.