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Financial planning for a divorce

For Minnesota couples, the decision to divorce can require a lot of financial planning. This may include obtaining copies of credit reports to clear up any errors before the divorce is underway. Soon-to-be exes should also gather copies of other financial documents and keep them somewhere safe such as with a trusted family member or in a safety deposit box.

If possible, a spouse should set up an individual bank account and establish a line of credit. The latter could present challenges for those who did not work outside the home during the marriage. However, the Credit Card Accountability Responsibility and Disclosure Act of 2009 allows people to apply for credit based on household income.

Ex spouses should also understand that their taxes will change. They may move to a different income bracket, and if assets are sold during the divorce, there could be a capital gains tax to pay. For help, an ex could hire a financial professional to assist with taxes and other money-related issues.

Before the actual separation, a spouse might also want to sit down with an attorney and talk about financial goals for the divorce. Protecting oneself financially can be critical since people may suffer a severe drop in their standard of living after a divorce. Another financial consideration could be child support, which is usually paid to the custodial parent. People who are concerned about paying or receiving either child support or alimony might also want to discuss this with the attorney. These amounts may also be modified in the future based on a change in circumstances.

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