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Important issues when dividing retirement accounts during divorce

Divorce among people over 50 has been trending upward since the 1990s. Older individuals in Minnesota likely have multiple retirement plans to split when they end their marriages. They could have one or more 401(k) plans and pensions from jobs over the years as well as Individual Retirement Accounts.

An owner of a financial services company confirmed that most retirement assets qualify as marital assets. This sometimes upsets people who had not realized that they would have to give a portion to an ex-spouse in a divorce settlement.

Study finds racial bias impacts bail decisions

Black defendants in Minnesota and throughout the United States are 2.4 percent more likely to be held during the legal process than white defendants. This is the key finding in a study to be published in The Quarterly Journal of Economics. Furthermore, it was determined that bail for black defendants was higher and that both white and black judges seemed to be biased against them.

As a general rule, those who are deemed a more significant risk to society will be given higher bail amounts. Research has shown that black defendants are thought of as more aggressive even though there is no clear evidence to back this up. The researchers behind the study say that making decisions based on data could work to reduce racial bias in the justice system. Providing additional training for judges could also help them to make decisions that are based more on facts and less on racial stereotypes.

The value of planning for a divorce

Few couples anticipate going through a divorce when first getting married, but with divorce rates at 50 percent, planning for a future separation is the intelligent thing to do. Knowing what the expect when the time comes can reduce a lot of confusion and stress for both parties. If done correctly, planning can result in a peaceful negotiation of terms through mediation or collaboration rather than an extended and expensive trial. All the adults and children involved can benefit.

There are many things to consider when planning for a divorce, including the division of assets and custody of children. Making a reasonable decision about these factors requires careful thought and research by both parties. Each person should set reasonable goals for a future after divorce and then think of ways to accomplish those goals without generating more difficulties.

Understand your estate planning options

You plan on wetting a line with your loved ones for years to come, but you know life can change in the blink of an eye. In those situations, you want to make sure everything is in place ahead of time. That's where having a will and estate plan comes in handy. But the terms aren't always the easiest to understand. Here are some of the differences between a will and other estate planning tools - and why you should consider them.

What is a will?

Retirement savings can be affected by divorce

Most Minnesota spouses facing divorce know to expect a range of emotional, practical and financial challenges. While people often think of these issues in the immediate terms, the ripple effects of a divorce can echo for years in a person's financial life. It can be particularly important for newly single people to plan for the future in order to increase their preparedness for retirement, especially since divorce is more highly correlated with difficulties in maintaining a standard of living in the retired years.

The Center for Retirement Research, a study center at Boston College, examined the effects of divorce on retirement risk, an index developed by the center to assess the number of American households that can maintain their financial comfort and security after they stop working. Approximately half of all households across the country face a risk of being unable to keep up that standard if they retire. That risk is higher for divorcees by approximately 7 percentage points.

Bankruptcy filing for rapper Lil' Kim

Minnesota fans of rapper Lil' Kim may have heard that she is having financial problems. Lil' Kim filed for Chapter 13 bankruptcy just days before foreclosure on her mansion in New Jersey.

She reportedly owes over $1.47 million in taxes and over $4 million in various debts. She is more than $650,000 behind on her mortgage on the $2.3 million home. The house will be auctioned at the end of June.

Supreme Court rules in favor of privacy

Police in Minnesota and throughout America will need a warrant to search a vehicle located on private property. The Supreme Court ruled 8-1 in favor of a defendant who had been taken into custody after being suspected of stealing a motorcycle. Police believed that the motorcycle in question was sitting in the man's driveway under a tarp. After completing a search, they took him into custody when he arrived back at his home.

The case involved two precedents concerning searches outside of a home and an exemption to the Fourth Amendment as it related to searching a vehicle. If authorities believe a crime has been committed, they can generally search a vehicle since it can be moved quickly. However, the majority of the justices believed that an individual's privacy rights trumped other concerns in a case such as this one. While Justice Clarence Thomas was part of the majority, he did lament that evidence could be suppressed at trial.

Financial Planners Play Major Role in Divorce

For years, a common suggestion for Minnesota couples seeking a divorce was to talk with an attorney before the separation. Now, a new trend is leading couples to secure their finances with help from more than just an attorney.

For many couples seeking a divorce, advice from a divorce attorney has been supplemented with guidance from financial planners. For many financial planners, divorce planning is becoming a significant part of their business. The ideal situation is for a spouse to build a team, namely an attorney and a financial planner, that can help keep a stressful situation from also leading to financial ruin.

How to avoid common estate plan mistakes

The increase in the estate tax exemption to $11.18 million can be a good thing for Minnesota residents and others. However, there are ways for an individual to jeopardize his or her plan for what happens to assets after passing away. For instance, passing away intestate could mean that heirs have to spend time and money proving that they are owed a portion of an inheritance.

It could also call in question whether a special needs family member is entitled to continue receiving government benefits. In some cases, an individual who tries to create an estate plan on his or her own could be making critical mistakes that may render the document invalid. In the event that the document itself is valid, executing it in an invalid manner could render it meaningless in the eyes of the law.

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