A full understanding of finances is important for people in Minnesota who are considering divorce. They should understand both current family finances and what their budget will look like after the divorce. This involves gathering information about income, creating a lifestyle analysis and drawing up a statement of net worth before submitting financial information to the court.
Tax returns for the past several years can be used to establish income. People who own a share of a company should try to find out if any personal expenses have been paid through the company since they will need that information in creating the lifestyle analysis. This is simply an account of expenses for the past several years and a forecast of what the budget will be after the divorce. It is important to make it as accurate as possible since this is the basis on which a person will negotiate the settlement agreement. This may involve forecasting some unknown future expenses, such as college costs and health care, that are increasing at a rate faster than inflation.
The statement of net worth is a list of assets and liabilities. There is other financial information that may be useful as well. For example, credit reports can indicate whether there are joint accounts that need to be closed.
Even in a high-asset divorce, couples may find they are able to work out an agreement about dividing property that suits them both instead of going to court. In contrast to the adversarial approach of litigation, mediation can help in reaching a satisfying resolution. However, it is also important for people to maintain financial stability after a divorce, and if the other party is not cooperative, litigation might be the right approach. An attorney may be able to assist with either of these processes.
