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Lake Elmo Minnesota Legal Blog

Tax changes divorcing couples should know about

For some Minnesota couples who are ending their marriages, changes mandated by the Tax Cuts and Jobs Act, which passed in late 2017, will mean less money for them after the divorce. The TCJA changed how parents can take exemptions for children on their taxes and how alimony is affected by the new law.

There is a significant increase in the head of household deduction, and this can be taken by a single parent who has the child in the home more than 50 percent of the time and who pays over half of household expenses. There is also a child tax credit that the HOH parent can take. In the past, parents could alternate claiming the child tax deduction, but it is unclear whether this will be the case for the child tax credit. Parents may include a provision stating that this will be tradable if IRS regulations allow it.

How health problems may get worse after divorce

"Gray divorce" is a term often used for marriage separations among the 50-and-older age group. According to national statistics, more and more Minnesotans are going through gray divorces. It's important to note that many older ex-spouses face added challenges such as health issues, social isolation and financial problems.

Divorce can cause anxiety and depression even among the more harmonious exes. In bad situations, one may also suffer from insomnia, symptoms of post-traumatic stress disorder and a weakened immune system. Many health conditions, such as diabetes, heart disease and high blood pressure, can worsen under chronic stress. Depression and other psychological disorders may also lead to a more sedentary lifestyle and risky behaviors, including drinking too much and overeating.

Beyond Nurse Jackie: Twin City nurses and addiction

Many of us are aware of the Netflix series Nurse Jackie starring Edie Falco. The series, a medical comedy-drama, chronicles the life of superstar, but pain-killer addicted nurse Jackie Peyton. The series ran from 2009 to 2015. But what we may not be aware of is that high numbers of our Twin City nurses struggle with pain killer and alcohol addiction. 

Staggering statistics

Estate planning for young Minnesota residents

Estate planning is rarely a high priority for young people in Minnesota and around the country, and studies reveal that three in four American millennials have not drafted a last will and testament. This can be a delicate subject even for those who expect to live for several more decades, but financial experts say that there are good reasons for even young adults to put at least a rudimentary estate plan into place.

In addition to providing clear instructions for how an individual's assets should be distributed after they pass away, a last will and testament also names an executor to manage their estates and administer distributions. When no will has been written, the estates of deceased persons are administered by states according to established rules that may not always align with their wishes. Even when estates are simple and assets are few, writing a will can streamline the process and avoid bitter disputes among heirs.

Co-parenting strategies to ease stress throughout the school year

The start of the school year in Minnesota brings new schedules and extra expenses. Divorced parents will benefit from tackling these demands head on. Planning during the final days of summer vacation will go a long way toward preventing scheduling conflicts and making sure that fees for uniforms, extracurricular activities and supplies get paid.

Parents should review the schedule for the coming academic year together. This way, both parents will know about school events, half days and extracurricular activities. They can decide who will transport children and at what times. Online family calendar tools and phone applications could help family members track their commitments. There could also be a family meeting where children learn their parent's expectations about homework. Although parents might have different approaches to education, each parent should make clear to their children what needs to be done within their individual homes.

Parents can plan for their children's future

There are a number of ways that Minnesota parents can use estate planning documents to make sure their children are cared for in the future. In fact, estate planning is perhaps most critical for people who are also parents. By creating key documents like wills, trusts and powers of attorney, people can direct how their assets will be distributed, especially in the interests of caring for their children. Trusts in particular can help people pass on wealth to minor children and continue to exercise some level of control over how the funds are used.

By creating an estate plan, parents can provide their beneficiaries with clear financial advantages, like a reduction in estate taxes or the elimination of fees and delays in probate. In addition, parents themselves can enjoy greater peace of mind with the knowledge that their children will be provided for. However, there are also issues that may not be addressed in standard estate planning documents that parents may wish to pay special attention to. In general, parents will name the individuals who they wish to assume guardianship of their children in a will. However, transferring guardianship is a long-term process that must be confirmed in court.

Avoiding potential problems with estate plan surrogates

There is a potential "time bomb" hidden in some estate plans in Minnesota. Specifically, a possible source of unexpected problems is the individual named to act on behalf of the person making the estate plan. Actions taken by one or more parties named to oversee an estate could trigger family conflicts or affect the financial security of future generations. Some issues might be avoided or minimized when more thought is given to selecting estate plan surrogates.

Agents, trustees, executors, and financial account and long-term care insurance lapse designees are among the potential surrogates who could be involved with estate planning and probate actions. A potential problem with some of these surrogates is that duties may overlap. This is more likely to happen if designations are made over several years or with specific purposes in mind, such as purchasing insurance. It can also be problematic if individuals are appointed to various roles without being asked first, or if designated surrogates lack the experience or knowledge to carry out their tasks.

The pros and cons of submitting to a breathalyzer in Minnesota

You just made a mistake. After drinking throughout the summer day, you get in your vehicle and attempt to drive home. An officer pulls you over and wishes to administer a breathalyzer, but you worry that you could blow over the legal limit.

Because of the implied consent law in Minnesota, a court may penalize you with serious punishments if you refuse a chemical test. Multiple pros and cons exist when determining whether to take a Breathalyzer, so it's important to understand the consequences of refusing the test. Moreover, Minnesota punishments confirm that finding a sober ride this summer is your safest option.

Financial surprises can accompany divorce

When Minnesota women decide to divorce, the decision to end their marriage can come with unexpected financial changes. In one study of 1,785 adult women, including those planning for divorce, going through the process or with a finalized divorce, 46 percent said that they had encountered surprises during the process with an impact on their finances. Most of the women who participated in the study were already divorced, and over one-fifth were 55 or older.

There were several major financial surprises that these women encountered while going through a divorce. In the first place, many learned that they were unaware of the extent of their debt during the marriage, including their mortgages, lines of credit, credit cards, auto loans and other debts. In addition, for some women who had been long-time homemakers, the difficulty of re-entering the workforce led to lowered salaries and career prospects. Many expected that alimony payments would last longer or that child support amounts would be greater. While many people had developed a deep attachment to their marital homes, they often had to leave those homes for smaller, more affordable places.

Changing interest rates can affect estate planning

Trusts are an important part of estate and financial planning for many people in Minnesota. The current interest rates can play a major role in determining which type of trust will be the most beneficial to heirs. After years of lower rates, interest rates are rising, and this trend is expected to continue into the future. As the rates change, the decisions that estate owners make about trusts can also change.

For example, people who have been undecided about creating a grantor retained annuity trust (GRAT) or charitable lead annuity trust (CLAT) may want to act quickly. A GRAT is created for a specific period of time; each year, the person who created the trust receives an income from it. After the period is over, the value remaining in the trust is passed to the creator's beneficiaries. At this point, the value of the trust is taxable, and those taxes are calculated using a formula that takes the initial interest rate into consideration. Creating these trusts while lower rates are in effect can minimize the tax burden.

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