How can divorce affect retirement accounts?

After the divorce process has started, most people only think about a few assets that will be divided between the spouses once the divorce is finalized. This usually includes the home, cars or motor vehicles, real property, and household goods. But retirement accounts are one of the largest assets often overlooked in a divorce proceeding.

Retirement accounts might be subject to division following a divorce even if the account, including pensions, 401K or 403B plans, traditional IRAs, and Roth-IRAs, is only in one of the spouse’s name.

Dividing retirement accounts can be a difficult process, especially if the account existing prior to the marriage.

Divorcing spouses may agree to split up retirement accounts or use them strategically in an overall property settlement. If the case proceeds to a trial, a court may also determine that a retirement plan benefit is marital property and subject to division following the divorce.

In some cases, the divorce attorney will need to prepare a legal document called a Qualified Domestic Relations Order. A Qualified Domestic Relations Order, or QDRO for short, splits and changes ownership of a retirement plan or a portion of the retirement plan to give one of the spouses after the divorced become final.

An experienced Minnesota divorce attorney can guide their clients through dividing up retirement accounts in an equitable way, draft QDROs, and understanding significant tax implications.

Posted in Miscellaneous, Property Division | Tagged , , , , , , , , , , | Comments Off

3 questions for a divorce attorney about their qualifications

During an initial consultation with a divorce attorney, he or she will explain the process for getting a divorce and what issues might come up in your case. In meeting with a divorce attorney, people should get a sense if they can work well with the attorney.

Prospective clients should also be comfortable in asking the divorce attorney about his or her legal qualifications and experience in divorce cases. Here are three good questions that will likely produce thorough and informative responses.

What percentage of your cases are Family Law and Divorce cases?

While some attorneys work in all legal fields, many law firms specialize in specific areas of the law, such as personal injury, criminal defense, or business. Family law is no different. In fact, many law firms works exclusively or mainly in the area of family law. This question will help reveal how much time the attorney devotes to family law and divorce cases, which may shed light on the attorney’s overall qualification.

What is your usual or preferred strategy or “philosophy” for handling a divorce case?

While each case is different, each divorce attorneys goes about things differently when working on a divorce. Some attorneys recommend mediation or collaborative law. Others may recommend simply filing the case with the court. Others may encourage contact between the spouses, whereas others may recommend communication only between attorneys. Asking this question will help illustrate how your case might be handled by your divorce attorney.

Do you have time for my divorce case, or a heavy caseload at this time?

It is not unusual for divorce attorneys to have several family law cases they are working on at a given time. That said, it is important to find out if your case will be a priority. This question will help determine how long your divorce process will take, if other people (paralegals, legal assistants, associates) will be working on your case, and how often you should expect to communicate with your divorce attorney.

Posted in Divorce Process, Miscellaneous | Tagged , , , , , , , , , | Comments Off

What steps can I take to financially prepare for my divorce?

Following divorce, the financial situation of each person will likely change. This is because once marital property is divided, each person may move into a new home, and one spouse may be ordered to pay child support and/or spousal maintenance. That said, there are certain steps one can take to financially prepare for divorce in order to become financially independent.

Budget

The first step is to make a budget. A budget will shed light on if there is enough income to cover expenses and if expenses should be reduced or eliminated. For example, a person going through a divorce might decide to cancel a magazine subscription or stop buying $4 lattes at the coffee shop.

To make a budget, start by listing fixed expenses ˗ rent or mortgage payment, utilities, phone, cable TV, health insurance, etc. Then list variable expenses ˗ entertainment, clothing, eating outing, etc. Then list income sources ˗ employment, pensions, and investments. Lastly, compare expenses and income to see if there is enough income to cover expenses.

Adjust

If there is not enough income to cover expenses, individuals should attempt to eliminate or reduce variable expenses ˗ shopping, eating out, entertainment. Simply put, stop overspending.

After reducing or eliminating variable expenses, people still may find themselves short on funds. These individuals must get creative with fixed expenses and see if anything can be cut. For example, can the cable television or cell phone services be eliminated?

If money is still tight, individuals should try to increase income. This might include part-time employment or finding a roommate.

These steps can help divorcing couples reach financial balance. Financial balance is needed because financial situation of divorcing couples will likely change during and after divorce. This is especially true after property is divided, child support or spousal maintenance is determined, and new households are created.

Minneapolis Divorce Lawyers

At Clausen & Hassan, our Minneapolis divorce lawyers have experience with Minnesota divorce law and many details of the divorce process. If you have questions, contact us today for your free consultation about your specific situation.

Posted in Miscellaneous | Tagged , , | Comments Off

5 facts about the Minnesota divorce process that surprise most people

  1. Fault- Minnesota is a no-fault state, meaning that a spouse’s bad acts during the marriage (addiction, affairs, abuse) are irrelevant. One spouse only needs to assert that there has been an “irretrievable breakdown” of the marriage. At this point, it becomes a question of when, not if, a divorce will occur. Minnesota courts will not hear evidence about a spouse’s misconduct when dividing property or considering spousal maintenance. However, spousal misconduct can be raised when determining custody and parenting time.
  2. Residency requirements- Minnesota has specific residency requirements before a person can file for divorce ˗ one spouse must reside in the state for at least six (6) months before filing. The case will be dismissed if this requirement is not met.
  3. “Title” in property division- Minnesota does not follow title in determining who receives a particular asset in a divorce. For example, Mary purchased a car while married to Bob. Mary and Bob divorce. The car is marital property because it was purchased during the marriage. This is also a common issue for retirement accounts, pensions, and debt. For instance, Bob invested in a 401K during marriage. Upon divorce, Mary has a claim to the 401K because it was earned during the marriage, even if the account is solely in Bob’s name.
  4. Gender preference in child custody- For purposes of determining child custody, Minnesota courts cannot consider gender. Instead, Minnesota courts must take into account several factors that affect the “best interest of the child.”
  5. Only those unemployed get spousal maintenance- In Minnesota, a person does not need to be unemployed to receive spousal maintenance from their former spouses. Minnesota courts look at a variety of factors, including duration of marriage, standard of living established during the marriage, and the other party’s ability to pay.

Minnesota Divorce Lawyers

At Clausen & Hassan, our Minneapolis divorce lawyers have experience with relevant state case law. If you have questions, contact us today for your free consultation about your specific situation.

Posted in Child Custody, Divorce Law, Parenting Time, Spousal Maintenance | Tagged , , , | Comments Off

How long will my divorce take to complete?

One of the most frequently asked questions of clients seeking a divorce is how long the process will take. The answer: it depends.

Some divorces can and do take many months, or even a year, to complete. But these divorces are the exception. In fact, many divorces can be completed within a period of a few weeks, especially if the divorcing spouses amicably reach agreements. Thus, the length of a divorce largely depends if the spouses are able to reach an agreement on the relevant issues, such as child custody, parenting time, spousal maintenance, and division of property.

The length of a divorce also largely depends on how the case is resolved. For example, if the parties agree to a divorce and the relevant issues, their divorce lawyers can simply file a stipulated agreement with the court and await a judge’s signature. This may take only a few days or weeks to receive.

If the divorcing spouses, however, have conflicts regarding many important issues, the case might proceed to a trial. The entire process of a trial can usually take several months to complete, especially if the court schedule is filled with other cases. Moreover, many states now require that divorcing spouses seek out alternative dispute resolution methods before going to trial. These mandatory processes, if unsuccessful, add to the overall time frame.

Each divorce is unique. The parties to a divorce can move the process forward by agreeing to certain outstanding issues. If not, the case might move towards a trial, which lengthens the process considerably. Trials also lead to greater financial cost and emotional strain.

Minnesota Family Law Attorneys

At Clausen & Hassan, our Minnesota Family Law Attorneys have experience with many divorce situations. If you have questions about your specific situation, contact us today for your free consultation.

Posted in Collaborative Divorce, Contested Divorce, Divorce Process | Tagged , , | Comments Off

What does a retainer do when I hire a divorce lawyer?

After selecting a lawyer to hire for a divorce case, lawyers typically require that the soon-to-be-client to pay a retainer that covers how much the client will be charged.

A retainer is an advanced payment for work to be performed at a later time. In other words, a retainer is similar to a down payment that guarantees that the lawyer will be available to work on your case in the future. As such, retainer agreements are essentially contracts that lay out important financial terms of the attorney-client relationship.

For example, a divorce lawyer may require a retainer in the amount of $3,500 before working on a divorce. If the person signs the retainer agreement and pays the $3,000, this money is then be placed in a trust account. If the divorce lawyer bills at an hourly rate of $100, the retainer would not run out until the divorce lawyer worked 30 hours on the case. If the case if completed after only 15 hours of work, the lawyer would keep $1,500 for services rendered and return $1,500, the amount remaining in the trust account, to the client. If, however, the case takes more than 30 hours of work, a divorce lawyer may require their client to replenish their retainer.

Paralegals and legal assistants also bill clients for work performed on a case, although usually as lower rates than lawyers. In addition, retainer agreements usually state that clients are responsible to pay other costs, including filing fees, photocopies, mailings, couriers, mileage, travel, and parking.

Before entering into a retainer agreement with the divorce lawyer, make sure you understand the agreement and its terms and conditions. Be sure to read the entire retainer, and if you have questions about the fee agreement, get clarification before signing it.

Minnesota Divorce Lawyers

At Clausen & Hassan, our Minnesota divorce lawyers know that many clients have little experience with the legal process. If you have questions about procedures or your specific situation, contact us today for your free consultation.

Posted in Divorce Process, Miscellaneous | Tagged , , , , | Comments Off

Minnesota Divorce Statistics

The number of Minnesota divorces and annulments has been steady in recent decades, after an increase in the 1970s. The rate when compared to the number of people in Minnesota has been trending slightly downward.

Marriages and Divorces in MN 1940 2000 Minnesota Divorce Statistics

Marriages and Divorces in MN 1940-2000

The first graph is the total number of marriages and divorces, not the rate per thousand, and a larger number can be expected when there is a larger population.  However, the doubling in total divorces during the 1970 to 1980 decade seems higher than can be explained by the population growth (from 3,806,103 to 4,075,970).

The upward leap in the 1970s may be due to the appearance of no-fault divorce.  California adopted the first no-fault divorce law in 1970, and over the following decade most states created no-fault divorce laws.  All fifty states had such in 2010, when New York’s law took effect.

Divorce Annullment rate 1940 2000 Minnesota Divorce Statistics

Divorce and Annulment rate in MN 1940-2000

The rate for each thousand people in Minnesota during sixty years has ranged from 1.1 to 3.7, with the rate having a similar change as the total count of divorces during the 1970s.

These graphs are from a 2002 state legislative study.  The Centers for Disease Control was not getting enough data from Minnesota, and stopped trying to estimate the state’s divorce rate after 2004.

Posted in Divorce Process, Miscellaneous | Tagged , , , , , , , , | Comments Off

Domestic Abuse Order for Protection (OFP)

In Minnesota, a victim of domestic abuse can seek an Order from the District Courts, prohibiting contact from an abuser. Minnesota Statute Section 518B.01 subd. 1 allows a Court to grant an Order for Protection (OFP) upon making a finding of domestic abuse. A finding of domestic abuse can be made when any of the following are committed against a family or household member:

  1. Physical harm, bodily injury or assault;
  2. Infliction of fear of imminent physical harm, bodily injury or assault; or
  3. Terroristic threats, criminal sexual conduct, or interference with an emergency call.

A ‘family or household member’ can include:

  1. A spouse or former spouse;
  2. Parent(s) and child(ren);
  3. Persons related by blood;
  4. Persons residing together or who have resided together;
  5. Persons who have a child in common (whether or not they were married or have lived together);
  6. Man and woman (if the woman is pregnant and the man is the alleged father – regardless of marriage or cohabitation); or
  7. Persons involved in a significant romantic or sexual relationship.

Other than prohibiting contact, some (but not all) of the relief a Court can grant a victim of domestic abuse includes:

  1. Excluding the abuser from the victim’s residence, place of employment or education, and a reasonable surrounding area;
  2. awarding temporary custody, parenting time rights to minor children of the parties;
  3. ordering counseling or other services for the parties;
  4. ordering treatment services for an abusing party;
  5. ordering possession of property, pets,
  6. prohibiting all contact, whether by phone, email, messaging, or through a third party; and
  7. ordering restitution (compensation for losses incurred by the victim).

An OFP can be a powerful method of prohibiting contact. If properly enforced, an OFP can be both effective and enduring. Once the OFP is in place, a peace officer can immediately arrest (without warrant) an abuser if there is probable cause to believe that the abuser violated the OFP. Ongoing violations of the OFP by an abuser can result in a felony conviction, and can extend the life of the OFP. Although OFP’s are initially limited to two years in duration, they can be extended for up to fifty (50) years in cases where an abuser violates the OFP or in cases where a victim has had multiple OFP’s against the same abuser. An extension of an OFP is also permitted when a victim can articulate a reasonable fear of physical harm from the abuser, or the abuser has engaged in stalking behavior against the victim, or the abuser is released or about to be released from incarceration.

An example of the Court’s power to extend an OFP was demonstrated in a recent Minnesota Court of Appeals decision to uphold a lower court’s extension of an OFP for ten (10) years. The victim had placed multiple OFP’s against the same abuser over the span of several years, but the abuser still purchased property next to the victim’s residence, was caught peering into the victim’s yard, and even built a pole barn next to the victim’s residence to enable the abuser to peer out of the windows at the victim. This behavior was found, by the district court, to constitute a violation of the OFP, even without evidence of a conviction for violating the OFP. The OFP was consequently extended for another ten (10) years. See In the Matter of Sally Ann Ekman v. Lee McFadden Miller.

The attorneys at Clausen & Hassan have experience in representing parties in Domestic Abuse Order for Protection matters, including before the Court of Appeals. Please contact Clausen & Hassan if you have questions about or need help with a Domestic Abuse Order for Protection.

Posted in Divorce Law, Domestic Abuse | Tagged , , , , , , , | Comments Off

What is an Annulment?

Definition: In Minnesota, a marriage may be deemed void by a Court-decreed annulment. An annulment is a declaration that a marriage never existed. Annulment and dissolution of marriage (divorce) are not the same thing. A divorce proceeding addresses the parties future marital status and rights, whereas an annulment declares that what had appeared to be a valid marriage was never, in fact, a marriage at all.

Grounds: Only marriages that are void or voidable may be annulled. In Minnesota, an annulment will be granted only on the basis of one or more of the grounds enumerated by statute, and fraud may be grounds for an annulment.

Time Frame (statute of limitations): Filing for annulment is very time sensitive. A party will have only 90 days to file an annulment from the time the party received knowledge about their husband’s/wife’s purported fraud. If the annulment proceeding is not brought within this 90 day period, then a Minnesota marriage is no longer considered a voidable marriage and cannot be annulled.

Minnesota Case Law on Fraud and the “Essence of Marriage”: Minnesota case law instructs the Court how to determine fraud for the purposes of annulment. “Concealment or deception by one of the parties as to defects of character, morality, chastity, habits and temper are not grounds for annulment.” This rule comes from the case Robertson v. Roth, which is the case law Minn. Courts use in annulment proceedings regarding fraud. This case explains that, “Concealment in order to annul a marriage must go to the very essence of the contract.” The essence of marriage and fraud generally refer to cases involving false representation with respect to sexually transmitted diseases, hiding the fact of pregnancy of another man at the time of marriage, or hiding information regarding marital status (meaning a person is married to another person at the time of a subsequent marriage). The essence of marriage generally refers to the sexual relationship of the marriage.

Fraudulent nondisclosure of past debts, misrepresentation of employment, false degrees, etc. may not meet the criteria for an annulment. Minnesota Courts may characterize this type of fraud as mere flaws in personality and not essential and material elements on which a marriage relation exists.

Minnesota Divorce Lawyers

At Clausen & Hassan, our Minnesota divorce lawyers have experience with annulments and relevant state case law. If you have questions, contact us today for your free consultation about your specific situation.

Posted in Divorce Law | Tagged , , | Comments Off

Who is Entitled to the Engagement Ring?

The ownership of an engagement ring depends upon whether an engagement is followed by a wedding.  Whatever happens, the ring will be non-marital property.

Termination of Engagement

In Benassi v. Back & Neck Pain Clinic, Inc., a former employee brought a sexual harassment claim against her former employer/fiancé.  In response, the former employer/fiancé filed a counterclaim for the return of a $24,000 engagement ring.  The Benassi Minnesota Court tackled the issue of “who is entitled to the engagement ring.”

Generally, engagement rings are considered to be conditional gifts given in contemplation of marriage.  If there is no marriage, there is no gift.  This may seem unfair, especially considering that facts surrounding the break-up of an engagement.  Considering Benassi, the woman claimed her fiancé exhibited “deeply disturbing, dangerous and highly insulting behavior.”  The Benassi woman alleged that she was not at fault for the break-up of her engagement thereby justifying her ability to keep the expensive engagement ring.  However, the Benassi Court held that since the Minnesota Legislature adopted a no-fault marriage dissolution law on the grounds of public policy, it is consistent to adopt a no-fault approach to the return of an engagement ring.  Despite his egregious behavior, the woman was not entitled to keep the engagement ring.

Dissolution of Marriage

Once the parties are married, Minnesota Courts treat an engagement ring in a different manner.  Although the parties are married, the engagement ring is not marital property.  Marriage satisfies the condition of the gift, and the woman is entitled to keep her engagement ring.  In Linderman v. Linderman, the husband argued that his wife’s engagement ring was his non-marital property because it was purchased with his non-marital income prior to marriage.  The Minnesota Court’s disagreed and held that the wife could keep the engagement ring because it was her non-marital property.  Under this reasoning, the husband gave his wife the ring in contemplation of the marriage—his wife accepted the ring—a marriage followed—therefore, his wife is entitled to keep the engagement ring as non-marital property (even if they later divorce).

Minnesota Family Law Attorneys

At Clausen & Hassan, our Minnesota Family Law Attorneys have experience with non-marital property and marital property issues. If you have questions about your specific situation, contact us today for your free consultation.

Posted in Divorce Law, Property Division | Tagged , , , , , , , | Comments Off