You have made the decision to go ahead and get a divorce. You’ve gone through all of the preliminary mental gymnastics – - – considered the possibility of reconciliation, counseling, etc. You have come to the final conclusion that there is no hope and you are going to proceed with a divorce. However, you have decided that you are going to delay filing the divorce for approximately one year. This could be because of issues regarding children, health, family, financial, or many other reasons. Actually, the delay may work to your advantage, because it will give you time to prepare and plan your divorce.
As we work through the issues let’s assume several facts. First, let’s assume that we are dealing with a fairly long-term marriage with good people. Secondly, there is no physical abuse or no infidelity. And finally let’s assume there are no child issues involved in the divorce, either because none were born or adopted during the marriage or because they are now adults. Typically this describes someone in the range of 45 to 60 years of age who has been married for quite some time.
Your divorce planning will begin with the accumulation of information. Attorneys and courts do not operate in a vacuum. They have to know about the particulars of your financial situation in order to represent you and to make intelligent decisions concerning your divorce. All too frequently people fail to advise their attorney or the courts about important issues including assets, debts, obligations, legal obligations, etc. Furthermore, all too frequently people fail to adequately accumulate the necessary information for their attorney. This leaves the client at a great disadvantage, the attorney at a great disadvantage, and ultimately increases the cost of the divorce. So use the delay to your advantage to accumulate the necessary information and documents.
When you begin accumulating data, here are some of the items that you will need to provide to your attorney.
- If you have a prenuptial agreement or a premarital agreement, you will need to provide a copy to your attorney, along with any supporting documents, or subsequent amendments or alterations.
- If you own a house or condominium will need to provide your attorney with copies of all real property records, including deeds, closing statements, a current mortgage statement, and a current tax statement. If you or your spouse maintains own any investment or vacation real estate you need to provide your attorney with copies of all real property records, including deeds, closing statements, a current mortgage statement, and a current tax statement
- If you or your spouse have individual retirement accounts, 401(k) accounts, or 403(b) accounts, or pensions, you need to provide your attorney with current information regarding these assets. I generally prefer the December 31st statement which is mailed out in January of each year, because it includes a full description of the employer, the account manager, phone numbers, account numbers, et cetera. Also, if you have any brochures or employer statements that explain the benefits you need to provide those to your attorney.
- You need to provide your attorney with a copy of any savings accounts, checking accounts, financial institution accounts, and credit union account statements. On first blush your attorney does not need all of the records, generally, he or she simply needs the first page of a current statement.
- If your divorce involves any stocks or bonds then you need to provide records regarding the stocks or bonds. If stock options are involved then copies of the stock options, the granting documents, the vesting schedules, and the account numbers are extremely important. If you and your spouse have invested in any small companies such as a limited liability company (LLC), limited partnership (LP) or real estate investment trust (REIT), then you need to make a copy of these documents for your attorney. If you or your spouse are the beneficiary of any trust or estate then you need to make copies of the trust documents.
- You need to make copies of your complete individual tax returns for the last three years. When I say complete copies I mean every schedule that was filed with your tax return, along with all supporting documents, notes and memo to and from your accountant and communications from the IRS. If you and/or your spouse own any interest in any small company, limited liability company (LLC), limited partnership (LP) or real estate investment trust (REIT) you will need tax returns for these entities for the last three years. You also need to provide current copies of any W‑2 forms, 1099 forms, or K1 forms.
- If you and your spouse have a safety deposit box you need to access the safety deposit box and inventory the complete box. I suggest that you take photographs of the box as you open it up, of each item as you remove it, and make copies for each document in the box. For other items in the box (coins, jewelry, etc) take detailed the photographs. I have been involved in many cases where there was a coin collection that supposedly existed in the safety deposit box but no one could describe to the court what the coin collection consisted of, and lo and behold by the time the divorce was to be finalized, the coins were no longer in the box.
- You need to provide your attorney with copies of any loan documents, mortgage documents, guarantees, credit card statements, or other obligations and debts that you have.
- You need to provide your attorney with copies of certificates of title; this includes not only automobiles, but also boats, jet skis, snowmobiles, four wheelers, and airplanes.
- You need to provide your attorney with copies of life insurance policies (not necessarily term life provided by an employer); including any life insurance policies that have cash surrender values. Also, if you have any annuities you need to provide copies to your attorney.
- If you have any appraisals, whether of real property, personal property, or jewelry you need to provide those appraisals to your attorney.
- If you have any insurance policies that insure anything of particular value like scheduled jewelry or other scheduled assets, you need to provide a copy of these documents to your attorney.
- If you or your spouse have provided a bank, mortgage company, loan company, or any other financial institution with any type of personal financial statement within the last five years you need to furnish a copy of this to your attorney.
- If you can prepare an excel spreadsheet of your assets and liabilities it will be extremely helpful to your attorney.
- Prepare a budget of your existing income and expenses and what you hope it will look like after divorce. Income includes any salary, wages, or other monies you receive as a result of your employment or investments. Expenses include mortgages, car payments, utilities, debt payments, other obligations, and expenses for everyday living.
Once you have accumulated all of your documents, the next step is to organize the documents. I once had a client (a businessman nonetheless) bring me two grocery sacks full of documents. Since he owned 43 pieces of property in Houston, and every one of the pieces of property was rented, it was necessary to organize all of his documents. I had to assign a young attorney to the project for two solid weeks to organize the documents. Your attorney has no idea what he or she is attempting to organize, but you know what you are organizing – what loan document goes with which deed, etc. The point is that, attorneys are very expensive organizers, so save some money and try to organize the documents yourself before handing them off to your attorney.
One of the most effective ways to organize documents for your attorney is to put the documents in a three-ringed tabbed notebook. For example Tab No. 1 may be real property – when your attorney flips over to Tab No. 1 there is a copy of the deed, the mortgage statement, the appraisal and the most recent documents in connection with the real property. Frequently a client will also insert a note in connection with Tab No. 1 concerning real property – - something like, “we bought this with the intention of keeping it as an investment, but it has not been a good investment, and I would just as soon see this piece of property sold.” Tab No. 2 may be retirement accounts such as 401(k) statements, IRA statements, pension statements, et cetera. Again if there is anything that is particular or peculiar about the retirement benefits then insert a note at the front. Once you get the notebook completely assembled then I suggest that you type up a table of contents for your attorney.
The final step that you need to do is to write your attorney a three to five-page narrative. Remember, your attorney knows virtually nothing about you, your spouse, your assets, your marriage, your history, etc. I suggest that that narrative include a description of your history, a description of your spouse’s history, a description of your marital history, an overview of your assets, liabilities, income, and liabilities. And finally, it should include a short a paragraph as to your hopes and goals associated with the divorce.
If you are planning your divorce a year in advance and organize your data for your attorney, I can assure you that your case will go much smoother, move faster, and you will have a better working relationship with your attorney than if you hadn’t planned ahead.
About the author:
Houston divorce attorney John K. Grubb founded John K. Grubb & Associates, a leading family law firm specializing in divorce. Additionally, his practice expands to include community property division, child custody, child support, premarital and marital property agreements, alimony, visitation, family violence, and more.