Dispute Resolution Services (DRS) : Topics to be Resolved
At DRS, we facilitate agreements on all of the following topics:
Parenting
We help our clients create parenting plans for all types of situations including those involving separation, divorce, and unmarried parents. We also assist parents who need to review, modify or enforce their existing parenting plans or custody arrangements.
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Child Support
When parents with a minor child (or children) born or adopted during the relationship (“joint children”) separate from or terminate the adult relationship, they need to consider a method for paying the child’s expenses. Typically such a plan is called “child support” and addresses child related expenses which are unique to each parent’s home, and those which are common to both homes. Expenses common to both homes may include work or school related childcare, dependent health insurance, medical or dental expenses not covered by insurance, and some extra curricular activities. DRS mediators can facilitate the parents’ agreements regarding child support.
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Spousal Maintenance
Spousal maintenance refers to monthly, or other periodic, payments from one spouse to the other. The purpose is to assist the recipient in meeting his or her financial needs. Such payments are made while the separation or divorce process is pending and/or after finalization. The income tax term for spousal maintenance is “alimony”. While unmarried parties may agree to periodic payments, only actual alimony can be deducted by the payor on his income tax returns, and must be treated as taxable income by the recipient.
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Marital Assets
In a divorce, it is necessary to identify all marital assets, agree on a value for each asset and agree on which party will receive the asset.
In many marriages, one person is in charge of finances and the other person usually has other responsibilities. Since full knowledge and understanding is necessary to make good agreements, the party with less experience will need to become comfortable with all the facts upon which the agreement will be based.
For certain types of assets, such as an ownership interest in a closely held business or a complex pension plan, clients typically agree to hire neutral valuation experts outside of DRS. The parties will also need to consider various factors in dividing their assets, such as providing residence(s) for the children, liquidity, and future tax consequences.
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Liabilities
Most separating or divorcing couples have certain debts which are secured by an asset, such as a home mortgage or car loan. These debts are typically assumed by the person keeping the asset. A margin debt in an investment account is treated similarly.
Many of our clients also have unsecured debt, such as credit card balances, which are in both names or either party’s name individually.
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Non-Marital Assets
Under Minnesota law, each asset is considered marital – regardless of how it is titled – unless it falls under one of the categories in Minnesota Statute§518.54. A particular asset can be partly marital and partly non marital. According to law, a party seeking to claim that an asset is non marital must prove his or her claim. Such proof requires “tracing” the history of the asset and computing the non-marital value.
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Insurance
Divorcing or separating clients and unmarried parents will likely need agreements regarding health insurance for themselves and any minor children. Maintenance of health insurance for minor children is often a relatively simple matter, based upon determining which parent can obtain the best coverage at the least cost.
Health insurance for an adult not employed outside of the home can be more complicated as different employers have different policies and both federal and state laws may apply. At DRS, we assure that our clients address these matters. For example, we frequently ask our clients to consult with their attorneys regarding possibilities under a given plan for “continuation” and “conversion” coverage as well as to verify that the premium charge is no higher than is appropriate under the law.
Other types of insurance, such as home, auto and umbrella, are typically discussed in connection with assets and expenses.
Tax Matters
Divorcing, separating and unmarried parents need to agree on which parent will claim the dependency exemption for each child. Their agreements will also affect head of household filing status, the child credit, and the child care credit.
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