Friday, April 7, 2017

DIY divorce: Part II

In uncontested divorces procedure is very simple. It could roughly be divided into 4 easy stages
  1. Preparing initial documents
  2. Filing the initial documents with the court
  3. Preparing final documents
  4. Finalizing your divorce at court.

1.      Preparing initial documents.
Initial documents consist of Petition for Dissolution of Marriage, Confidential Information Form, Certificate of Dissolution, and Agreement to Join Petition. Petition and Joinder could be included in one form.

Petition for dissolution of marriage is a document that informs the court and your spouse that you want a divorce.

All mandatory forms could be found at Washington State Court Forms here.

The first document that needs to prepared is Petition for Dissolution of Marriage. At this date, the forms are very easy to fill out and are self-explanatory. Also Northwest Justice Project created very good instructions on how to fill out those forms. The instructions could be found here Instructions on how to fill out the forms start at page 15 of the packet.

The most important part is sections 12 – 14, which discuss division of property and debt. My recommendation is to include in the Petition all property (expect for personal property, and furniture) that you and your spouse have. Ideally the Petition should contain your agreed upon division of property and debt.
Property includes following items:

1.      Real property such as houses, condominiums, land, timeshares.
2.      Vehicles including cars, motorcycles, boats, jet ski, etc.
3.      Bank accounts – all bank accounts, including checking, savings, brokerage, investment and other.
4.      401K and other retirement accounts.
5.      Stocks, bonds, stock options, etc.
6.      Businesses or shares in businesses.
7.      Any items of value such as art objects, pianos, jewelry, etc.

Debts include:
1.      Mortgages on the real estate, loans (personal and car loans)
2.      Credit cards, even those that are not currently in use.
3.      Personal loans from people

My clients always ask me how the assets and liabilities should be divided between spouses. Should it be 50/50 split?
RCW 26.09.080 states that “the court shall, without regard to misconduct, make such disposition of the property and liabilities of the parties, either community or separate, as shall appear just and equitable …” In other words, there is no formula.
It is essential to remember that the court will NOT change the division of assets and liabilities once the court signs the Decree. RCW 26.09.170  provides that “the provisions as to property disposition may not be revoked or modified, unless the court finds the existence of conditions that justify the reopening of a judgment under the laws of this state.”

That means the Petition must be signed by both parties and it must contain final division of assets and liabilities.
At the end of the Petition, there is section that is called Joinder. It should be filled out by Respondent spouse if the spouse agrees to join the Petition. It is my recommendation that in uncontested divorces both spouses sign the Petition.
What happens if responding spouse refuses to join the Petition? Usually it means that there is a chance that spouse will change their minds. In that case, I recommend to file a Petition that the filing spouse wants, not what they both agreed to. Once the Petition is filed, there is no way to take it back.
The Confidential Information Form is located here. And Certificate of Dissolution is located here.
The forms are self-explanatory.

2.      Filing the initial documents with the court.
Once Petition for dissolution with Joinder, Confidential Information Form and Certificate of Dissolution were prepared and agreed upon by both spouses, they need to be signed and the Petition must be signed by both spouses.
To file the initial documents, you must go to the clerk’s office at the Superior Court in the county where you live.

King County superior court has two locations:

1.      Seattle Courthouse - 516 Third Avenue, Room E-609, Seattle, WA 98104
2.      Norm Maleng Regional Justice Center - 401 Fourth Avenue N, Room 2C, Kent, WA 98032

Chose the courthouse that is closer to your home.

Pierce County superior court is located at 930 Tacoma Ave South, Room 334 County-City Bldg., Tacoma, WA 98402
Snohomish County superior court is located at 3000 Rockefeller Ave, M/S 605,  Everett, WA 98201.

Divorces require a filing fee which is paid to the Clerk at the time the action is filed. Payment can be made by cash, money order or personal check if it is drawn on a Washington State Bank. If you are unable to afford the filing fee, you may file a Fee Waiver Request.

In Washington State filing fee for dissolution of marriage action is $314.
3.      Preparing Final Documents
Final documents include: Notice of Hearing, Decree of Dissolution of Marriage, Findings of Fact and Conclusions of Law.
The forms are located here.
The instructions created by Northwest Justice Project can be found here.
In short, your Decree and Findings of Fact and Conclusions of Law should be same as the Petition and should be signed by both spouses.
If your responding spouse does not agree to sign the documents identified above, you still can finalize the divorce but it will not be as fast. I will address this situation in a later blog post.
               4.      Finalizing Your Divorce
Your divorce can be finalized only 90 days after the initial documents were filed with the court. There is no way to avoid this rule.
The step by step process of finalizing the divorce is very well explained in here.
First step is  - Prepare two copies of the final documents.
Second step - 2 weeks prior to the completion of 90 days cooling off period, you or your spouse must go to the clerk’s office in person and file a Notice of Hearing. This way you will set up a hearing date for your divorce.
Third step - the same date, you must drop off copies of the final documents to the judge’s mail room. Those will be judge’s working copies. Sometimes in uncontested divorces working copies are not required, so it is best to ask a court clerk. Also they will tell you where to drop the working copies to.
Fourth step – at the date of the hearing, you must come to the court room with all original paperwork.
Your name will appear on the computer monitors in the lobby for the courtroom where you are scheduled.
Do NOT bring children with you.
Go to the court room and wait for your name to be called. Once  you are called, you must come forward and follow judge’s instructions. You will need to answer judge’s questions under oath. Be sure your answers are complete and truthful. Questions will include the following:
  • Is your marriage irretrievably broken?
  • Have you provided for division of property and liabilities?
  • Did you review Decree of Dissolution and Findings of Fact and Conclusions of Law?
  • Do you agree with the division of assets and liabilities stated in those documents?
  • Are you or is your wife pregnant?
After you answer all of the questions, the judge will sign the original orders.
Finally, sometimes you will be given original orders back. That means that you need to make a copy of the orders and drop of originals at the clerk’s office for filing with the court. YOUR DIVORCE IS NOT FINALIZED UNTIL THE SIGNED COURT ORDERS ARE FILED WITH THE COURT. It is essential that you do not take the signed orders out of the court house.

Monday, March 13, 2017

How to prepare financially for divorce

One of the main goals of every divorce is to create two financially and otherwise separate individuals. Financial independence is the inevitable result of all divorces.

Step I.

If you are not completely sure that you want a divorce, but you are contemplating one, I recommend you to do the following:
First, write a budget. You need to know how much you spend on necessities of life and how much you make. If your income is low right now, you need to know how much money you will need to live independently from your spouse.
A realistic budget will help to determine amount of spousal maintenance that a low-income spouse may be entitled to. It is necessary to remember that in Washington State judges do not use a formula when they determine amount of spousal maintenance. They look at financial situation of both parties, at their realistic needs (budgets) and financial abilities.
In cases, where both spouses have income, budgets help to plan for their financial future. When writing it, I recommend to start with figuring out your living arrangements (rent or live in the current family house).
If you want to stay in the house, you need to find out if you can refinance it in your name only. Sometimes people want to stay in the house, but cannot really afford to pay mortgage and are not eligible for refinancing the house in their only name.
If you intend to rent, you need to know how much that rent will be.
Second, figure out if you have any credit history. You should check your credit score. A good credit score is crucial for your financial future. It will help you to rent an apartment (if necessary), get a credit card, or refinance mortgage in your name only.
Third, open one or two credit cards in your name only. That way your spouse will not have a chance to cancel your credit cards without your permission. Also paying off credit cards will help you to raise your credit score.
Fourth, get following financial documents:
  • Tax returns for the last 5 years with all schedules and W-2s.
  • Paystubs for the last year, if possible. You should get your paystubs and your spouse’s paystubs. However, this items might not be accessible to you.
  • Bank statements from all bank accounts, including checking, savings, investments, retirement accounts.
  • Insurance statements and explanation of benefits from all employers.
  • Credit card statements, mortgages and other loans statements for the last year. Other information about debt.
  • Wills and/or Trusts
  • All written agreements.

Finally, figure out what property and debt you and your spouse have at the moment. At first write a list of the property and liabilities that you and your spouse have. Once you have compiled the list, you should start gathering financial documents including:
  • Real property – deeds, escrow papers, mortgage balances, monthly payments of the mortgage, tax property assessment information. You can even schedule an assessment of the property to see currently market price of it. Please note, is not very reliable when it comes to assessment of the market price but it gives an working estimate.
  • Cars, boats, other motor vehicles – registration slips, titles, loan documentation.
  • Pension plans, 401K, other retirement accounts – you will need copies of all financial statements available.

Normally there is no need to compile a list of household items, unless they are very valuable. In that case, it is best to take pictures (with dates on the pictures) of those items.

Step II.

Once you are ready to file for divorce or your spouse have filed for divorce:
Open a different account in your name only and preferably in a different bank that your current bank accounts.
After you open that account, you should transfer your most recent paycheck to that account and set up payments to go to your separate account.
If you are afraid your spouse will close access to the finances after you inform them about your intent to file for divorce, transfer some funds to your new account.
If you consider your spouse to be reasonable, discuss the matter of divorce first. It is essential that you bring up the issue of money. You should have some sort of an agreement on how much money you can transfer to your new account for your living/moving expenses and to hire an attorney, should you decide to retain one.
Talk to a CPA about your taxes and how to minimize them. Taxation is the second largest financial setback endured during the divorce. People with larger income might end up paying additional taxes after the divorce is finalized. Talking to a CPA might help you to avoid additional tax burden.

III. Things to avoid doing

First, do not close accounts, move assets from one account to another, or make other financial changes. All activity that is out of the ordinary should be avoided as it could give the appearance you are trying to hide funds.
Second, do not pay off community debt. Keep making payments as usual. All community debt will be divided between you and your spouse. If you pay it off now, you will not be able to ask for reimbursement of those payments later.
I have created a Budget form and Property and Liabilities Checklist. If you want those documents, please email me at and I will give them to you free of charge.