Divorce

Military divorces are slightly different than civilian divorces in matters of filing/serving, residency requirements, and property division. These differences are due, in part, to the fact that both federal law and state law govern aspects of a military divorce.

Under the federal 1982 Uniformed Services Former Spouse Protection Act, a state court is allowed to treat the retirement benefits of military personnel as either the sole property of the individual or the joint property of the individual and his/her spouse. Additionally, the Act does not specify a formula for how a state court must divide the retirement benefits in the case of divorce, though it does state that up to 50% of an individual's military retirement benefits may be awarded.

Since there is no requirement by federal law that dictates how military retirement benefits are to be divided in the case of divorce, state courts must make their own determinations based on state law.

Some states are considered community property states while others are equitable property states. In Minnesota, the court strives for a "just and equitable division of the marital property," and typically divides marital property equally between the parties.

While military retirement benefits may be subject to division between spouses, it is important to note, however, that Veteran's Administration disability benefits are the sole property of the individual service member and are not considered part of the community estate in the case of a divorce.

For additional information regarding the division of military benefits during divorce, please contact the Minneapolis family law attorneys at Banas Family Law now.

According to the United States Department of Labor, “more than 46 million private wage and salary workers are currently covered by employer-provided retirement plans in the United States.” These plans often serve as the primary source of retirement savings for the workers who have them. During a divorce, in order to have a fair and equitable division of property, one spouse may wish to claim an interest in the other spouse’s plan.

A Qualified Domestic Relations Order (QDRO) is a judgment, decree, order or court-approved property settlement agreement that recognizes the legal interest one spouse has in the other spouse’s benefits under an employer-provided retirement plan.

The division of marital property is governed by state law. However, QDROs carry tax consequences for each party involved. This means that the division of retirement interests must also comply with federal law. In order for a QDRO to be valid in Minneapolis and St. Paul it must be drafted in accordance with Minnesota law, the federal Employment Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code of 1986.

Due to the intricacies involved in drafting a valid QDRO, these orders should be drafted with extreme care and foresight to ensure your assets are divided and able to be accessed according to your wishes. A single mistake could render your money inaccessible.

An experienced attorney can help you divide your employer-provided retirement benefits while avoiding the mistakes and pitfalls commonly associated with QDROs. For additional information, please contact the Minneapolis family law attorneys at Banas Family Law now.

When filing for divorce, many people are aware of the common financial ramifications, including: property division, child and spousal support, and healthcare coverage changes. The impact of a divorce on the parties’ taxes, however, is often overlooked or misunderstood.

Divorce may affect your tax situation in a number of ways. The right to claim a dependent child will affect the amount of money owed or refunded at the end of the year. There may be money owed to the IRS from the sale of marital property, such as a house. Additionally, there are important things to know about the tax consequences of child support and spousal support payments.

Child support payments are treated as if they have no tax consequence: they are not taxable to the payee, nor are they deductible for the payor. However, spousal support typically is treated as income for the payee. As such, the payee generally must pay taxes on the spousal support payments received and the payor is allowed to deduct the money paid.

A more severe tax consequence may occur years after a couple divorces. Many married couples file their tax returns jointly. This means that each spouse has both individual and joint liability for any taxes owed for that tax year. In many cases, one spouse handles all of the finances for the household, including the taxes. If that spouse makes a mistake on the year’s tax return or purposefully claims less income than the household received, the other spouse is jointly liable for that error and any money owed to the IRS as a result.

The innocent spouse may have no knowledge that money was hidden or that the returns were done incorrectly. However, the IRS will still hold the spouse liable for the money owed unless a claim for “innocent spouse relief” is filed.

If you find yourself in a situation where the IRS is penalizing you for back-taxes owed from a year you were married and you had no control or knowledge of your financial situation at that time, you may be able to claim “innocent spouse relief.” A qualified attorney can assist you with reviewing your situation to determine whether or not you have a claim for “innocent spouse relief.”

Getting divorced is never easy. An experienced family law attorney will walk you through the process and ensure you understand the implications of divorce on all aspects of your life, current and future. For more information about the tax consequences of a divorce, please contact Banas Family Law for assistance.

Under Minnesota law, “marital property” is any property acquired by either spouse during the marriage, unless it:

“(a) is acquired as a gift, bequest, devise or inheritance made by a third party to one but not to the other spouse;

(b) is acquired before the marriage;

(c) is acquired in exchange for or is the increase in value of property which is described in clauses (a), (b), (d), and (e);

(d) is acquired by a spouse after the valuation date; or

(e) is excluded by a valid antenuptial contract.” (Minnesota Statute 518.003 Subd. 3b)

As noted above, an antenuptial, or premarital agreement, can affect the court’s determination of “marital” and “nonmarital” property by specifying what property is to be considered nonmarital in the event of divorce, separation, or the death of one of the parties.

According to Minnesota Statute 519.11, to be valid, the agreement must be signed prior to the date of marriage in front of at least two witnesses, be based upon fully disclosed financial information, and have been signed after each party had time to consult with an attorney.

For advice on either preparing or signing an antenuptial agreement in Minnesota, contact Banas Family Law at (651) 361-8109.

Traditional divorces are often highly confrontational and antagonistic, causing undue stress on the individuals involved. This adversarial approach may make it difficult for the parties to work together after the divorce is finalized, particularly in regard to child rearing decisions and parenting time agreements. Luckily, there are other options available to those wishing to dissolve their marriage as amicably as possible.

Alternative dispute resolution processes help parties come to amicable agreements outside of the courtroom. There are several types of alternative dispute resolution, including: mediation, arbitration, collaborative law, and (in Hennepin county) early neutral evaluation. These resolution processes typically produce less stress, cost less and are resolved more quickly than a traditional divorce.

Meditation is a process through which the two parties, along with their attorneys, work together to reach a mutually agreed upon settlement. A highly trained third party, called a mediator, facilitates the negotiation. Mediation is non-binding, which means if the parties cannot reach an agreement the case may still proceed to court.

Arbitration is much like mediation, except that the third party, called the arbitrator, issues a final, binding decision. Due to its binding nature, and to the fact that obtaining an appeal is highly unlikely, arbitration is most often used to settle post-divorce issues, including those involving child custody and/or parenting time.

Collaborative law is a relatively new process through which both parties and their attorneys formally agree to work together to reach a settlement. If during the course of negotiations a settlement cannot be reached, the attorneys must withdraw and the parties must obtain new representation in order to proceed to court.

A process created by the Hennepin County Family Court, early neutral evaluation utilizes a team, made up of at least one male and one female, to evaluate the case and inform the parties of the most likely resolution if the case were decided by a judge. This enables the parties to understand what would most likely happen in the event they cannot reach an agreement. This process may be used in conjunction with mediation and collaborative law.

To learn if mediation or another form of alternative dispute resolution is right for your Minnesota dispute, contact Banas Family Law at (651) 361-8109.

Except for child custody issues, the division of marital property is often the most adversarial and stressful aspect of a divorce. Determining who gets what can be complicated. The overall division typically depends on whether the property, or asset, is deemed to be marital or non-marital in nature.

According to Minnesota Statue 518.003, Subd. 3b, “Marital property” is defined as all property, whether real or personal, “acquired by either spouse subsequent to the marriage and before the valuation date . . . regardless of whether title is held individually or by the spouses in a form of co-ownership.” This includes retirement accounts and vested public or private pension plan benefits or rights.

In Minnesota, the court presumes that “each spouse made a substantial contribution to the acquisition of income and property while they were living together as husband and wife.” (Minnesota Statue 518.58, Subd. 1) As this is the presumption, the court strives for a “just and equitable division of the marital property,” and typically divides marital property equally between the parties. Valuations are generally based upon the date of the initial prehearing settlement conference, unless both parties agree to a different date.

But, what about assets held prior to marriage? If one spouse wishes to claim a sole interest in any asset, that spouse must provide proof that the asset is non-marital in nature.

“Non-marital property” refers to “property real or personal, acquired by either spouse before, during, or after the existence of their marriage, which (a) is acquired as a gift, bequest, devise or inheritance made by a third party to one but not to the other spouse; (b) is acquired before the marriage; (c) is acquired in exchange for or is the increase in value of property which is described in clauses (a), (b), (d), and (e); (d) is acquired by a spouse after the valuation date; or (e) is excluded by a valid antenuptial contract.” (Minnesota Statute 518.003, Subd. 3b)

Proving that property is non-marital in nature can be extremely difficult. Often, property that was originally non-marital can become partially marital during the course of the marriage. As experienced Minnesota divorce attorneys, Banas Family Law can assist you in satisfying the burden of proof required by the court. If necessary your attorney may utilize the services of a forensic accountant to “trace” your non-marital assets and provide expert testimony on your behalf in court.

In a divorce, identifying marital and non-marital assets and understanding how a court renders its valuations is essential to ensuring that your financial interests are protected. Minneapolis family law attorney Chris Banas has extensive experience assisting clients in asset identification and valuation. To discuss your case, call 651-361-8109 now.

Divorce can be complicated. Property must be divided, child custody agreements must be reached, and, sometimes, spousal maintenance (alimony) is considered. When one spouse owns a business, however, a Minnesota divorce can become a more arduous process.

These types of divorces typically involve larger assets that must be divided (both separate and co-owned), and there is generally a greater income disparity between the parties than in divorces where neither spouse owns a business. Additionally, there is an increased likelihood of one spouse being a stay-at-home parent, which may influence who the court views as the primary caregiver. Additional considerations include: the tax consequences of property division, and the fair-market value of the business.

In states with community property laws, each spouse is generally entitled to fifty percent of the business, regardless of who owned and operated it. In contrast, Minnesota is an “equitable distribution” state. This means the court will determine how to divide the marital property according to Minnesota Statute 518.58, subdivision 1:

“…the court shall make a just and equitable division of the marital property of the parties without regard to marital misconduct, after making findings regarding the division of the property. The court shall base its findings on all relevant factors including the length of the marriage, any prior marriage of a party, the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities, needs, opportunity for future acquisition of capital assets, and income of each party. The court shall also consider the contribution of each in the acquisition, preservation, depreciation or appreciation in the amount or value of the marital property, as well as the contribution of a spouse as a homemaker. It shall be conclusively presumed that each spouse made a substantial contribution to the acquisition of income and property while they were living together as husband and wife. The court may also award to either spouse the household goods and furniture of the parties, whether or not acquired during the marriage. The court shall value marital assets for purposes of division between the parties as of the day of the initially scheduled prehearing settlement conference, unless a different date is agreed upon by the parties, or unless the court makes specific findings that another date of valuation is fair and equitable. If there is a substantial change in value of an asset between the date of valuation and the final distribution, the court may adjust the valuation of that asset as necessary to effect an equitable distribution.”

Divorces involving professional business owners (doctors with their own practices, for example) can carry long-term financial consequences. Due to the high stakes involved, it is imperative for each spouse to obtain the counsel of a qualified Minnesota divorce attorney.

To ensure your business assets are protected, please contact Minnesota family law attorney Chris Banas at 651-361-8109.

The source of referenced Minnesota Statutes is the Office of the Revisor of Statutes, State of Minnesota, Copyright 2008. All rights reserved.

Domestic violence is a serious issue in divorce and custody cases, not only in terms of the civil and criminal effects, but also in the direct impact it will have on your chances for custody. To put it simply, a finding of domestic violence (order for protection in civil court or a criminal conviction of domestic violence) can ruin a party’s chance for custody.

1. Do not put yourself in a situation where it is likely an argument with your spouse will ensue. A finding of domestic abuse by one spouse against the other makes any custody battle very difficult since there is a presumption under Minnesota law that an abuser should not have custody. The specific language of the statute states: (d) whether domestic abuse, as defined in section 518B.01, has occurred between the parents. The court shall use a rebuttable presumption that upon request of either or both parties, joint legal custody is in the best interests of the child. However, the court shall use a rebuttable presumption that joint legal or physical custody is not in the best interests of the child if domestic abuse, as defined in section 518B.01, has occurred between the parents. (Go to Minn. Statute § 518.17 for the full text of the statute.) Copyright © 2007 by the Office of the Revisor of Statutes, State of Minnesota.  All rights reserved.
2. Do not yell, grab, hit, or throw anything in the presence of your spouse or, even more significantly, in the children's presence. If your spouse tries to incite you, walk away. Something as simple as blocking someone’s exit from a room may be considered abusive.
3. If you are being abused or are in fear for your safety or for the safety of your children, call 911 right away.
4. If you are accused of being physically abusive, do not make any statements - to anyone! Call an attorney right away. Remember, statements you make to the police (and to others) can be used against you in a later proceeding. Assert your right to remain silent.

In civil court, a finding of domestic abuse will result in the issuance of an Order for Protection. An Order for Protection is a civil order (not a criminal conviction) directing the abusing party (Respondent) to, among other things, stay away from the abused (Petitioner) party's residence or employment. When there are children involved, a temporary custody award will be made. An Order for Protection is usually put into effect for one (1) year, and may be extended beyond one year for good cause. Below are some excerpts from an actual order:

• NOTICE ABOUT ARREST AND JAIL: A violation of this Order may be a misdemeanor, gross misdemeanor, or felony. A misdemeanor violation may result in up to 90 days in jail, or $1,000.00 fine, or both. A repeat violation may be a gross misdemeanor, and may result in up to one year in jail, or $3,000.00 fine, or both. A police office must arrest and take into custody a person whom the officer believes has violated this Order.
• NOTICE ABOUT DEPORTATION AND ENFORCEMENT: A violation of this Order for Protection is a deportable offense. If you are not a United States citizen, a violation of this Order could result in your deportation. This Order for Protection is enforceable in all 50 states, the District of Columbia, tribal lands, and the United States territories. Violation of this Order for Protection may subject the Respondent to federal charges and punishment.
• NOTICE ABOUT FIREARMS: The Respondent must not possess, ship, transport, or receive any firearm or ammunition while this Order is in effect.
• NOTICE ABOUT OTHER CASES: Both parties are notified that in any other case involving parenting time (visitation), the Court will consider this Order for Protection if the Petitioner so requests.

If you and your spouse/partner are still living in the same house, be sure to discuss with your attorney early on any concerns you may have about your spouse's temper or abusive tendencies.  Do you believe your spouse is violent or could be violent?  Do you believe your spouse would lie about what happened during an argument?  Do you believe he or she would say you hit, grabbed or pushed him or her?   If you answered YES to any of the above, you should call your attorney immediately. Disputes "behind closed doors" are very difficult to defend, and not all domestic disputes involve the police or any written report for that matter. Sometimes I advise parties to physically separate themselves early on in the proceedings to eliminate even the chance of a spouse making a claim of domestic abuse.

Learn More -- Visit our articles and resources for more Minnesota family law information on Minnesota Divorce,  Child Support & Spousal Maintenance, Custody & Parenting Time and More.

If you would like to have a consultation with a Minnesota divorce lawyer, please contact attorney Chris Banas at  651-361-8109.