Going through a divorce can be an emotionally and financially taxing process, but McKinley Irvin Family Law attorney Brent Bohan said it doesn’t have to be
Divorce can be a long and arduous process, but organization early on can help make it easier.
In King County, couples are given 11 months to settle their cases before going to trial. With proper preparation — including the organization of financial records — Bohan said couples are more likely to avoid court and settle their cases early. In fact, 98 percent of King County divorce cases settle in mediation.
With more couples filing for divorce in January than any other month, we sat down with Bohan to learn some helpful tips that can make this painful process a little bit easier.
What is the first step couples should take after filing for divorce?
I always advisee (parties) to make copies of (financial) records early on. And really, what I tell people to look for is tax returns, pay stubs, financial account information — anything of that nature. That information can be obtained later on in the case, but it’ll have to be done, not always but usually, through a process we call formal discovery, which can be time consuming and expensive. So, I would always advise people to make sure that they obtain copies of the financial records, especially if it’s a person that hasn’t been involved in the party’s finances. Sometimes in households you’ll see one person running the finances and the other person is just kind of letting them do that. If a person hasn’t been that involved in the finances, I think it’s really important for them to gain information about the finances and understand what the party’s financial picture is, including making copies of documents.
What are financial assets couples filing for divorce should be aware of early in the process?
Sometimes one of the parties will own a business, and so therefore there’s a whole host of information there that you need in order to (assess) the value of the business. All of this is based on the fact of the community property laws and all community property means is that all property acquired during the course of the marriage is presumed to be community property. So, if there is a business started during the marriage or if there’s a party running a business at the start of the marriage, there could potentially be a community interest in that business and therefore it’s going to be helpful to value that business so we know how to divide it up.
The other thing that I’m seeing a lot of, especially from Microsoft employees or Amazon employees, is vested and unvested stock options. Amazon will pay out vested stock option through what we call RFUs, and it shows up as income. So, there’s a whole set of case law around unvested and vested stock options because if stock options are acquired during the course of the marriage but not vested and they vest at a later time, meaning after the marriage has dissolved, there’s a combination there of community property and separate property.
Aside from making copies of the party’s finances, what are other steps couples filing for divorce can take to make the process easier?
One of the things that happens in these cases is you have one income or sometimes two incomes supporting one household, and now when you separate you have one income or two incomes supporting two households. So all of a sudden your bills double and now people are scrambling. There’s only so much of the pie to divide up. One of the best things that I find helpful and I tell people to do is create a monthly budget, especially if they don’t have one. I’ll have them go through and list what their monthly expenses are, and that’s really helpful for people to understand how much money they will need each month, and some of those expenses may have to be reduced.
Anything couples should avoid doing that could make the process more difficult?
One of the things I see people do fairly often, and it’s just not OK, is they’ll just start grabbing money out of an account. The court’s not going to look very friendly on that; they’re going to make that party put the money back. There could be other repercussions for doing that. And if you take (money) out and say I don’t have it anymore, that’s even worse.
Same thing with buying stuff, don’t start selling stuff off. People start selling items that may have community interest in them, which creates problems down the road. And one of the other things I would say, definitely don’t sign anything without a lawyer reviewing it first. Because then, by the time it’s signed, it’s an agreement, and there’s usually not much (the lawyer) can do about it once it’s been signed.
And don’t go out and buy a house or boat. Don’t do this kind of extravagant spending. I see people doing that. It doesn’t make sense, and it’s not going to be helpful. The court could view that as unfavorable.
Divorce is financially stressful. You’re taking one income and dividing it into two households, and that can cause a financial strain on people. One of the things I tell (people) to do is talk and consult with a financial planner. Having an expert go through (your finances) may be helpful. And it’s a real possibility that, if (the couple) already is under financial stress and they go through a divorce, the divorce is not going to help. It’s definitely not going to generate more money, and it may increase in debt.
McKinley Irvin Family Law has several offices across the Puget Sound and in Portland, Oregon, including a Bellevue office located at 601 108th Avenue, Suite 1900, Bellevue. For more information or to seek out legal counsel, visit McKinley Irvin Family Law online.