Uncontested Divorce Checklist

If you have a house (or condo, real estate, etc.), you have to figure out what's going to happen with it. Your options would be, Husband gets it, Wife gets it, house is sold, or, both parties walk away and allow it to get into foreclosure. If one of the parties is taking the home (the "Husband gets it" or "Wife gets it" scenario), then you have to figure out how the non-taking party will get their marital equity out of the home. If there is no equity, which is unfortunately somewhat common these days, then it's easy, there is no marital equity to divide so the non-taking party just leaves. If there is equity in the home, then the parties need to figure out what an appropriate buyout amount would be and how that buyout will be paid to the non-taking party. Often times this can be done when the party who is taking the home refinances the mortgage (which is generally done to remove the non-taking party's name from the home loan).

What if you're unable to get the cash necessary to pay a cash buyout? When the party taking the home is unable to get the liquid cash necessary to pay the non-taking party a buyout, the parties may avoid a cash buyout by instead agreeing to an uneven distribution of the marital equity of a different asset. A simple example helps clarify this: let's say Husband and Wife own a home with $100,000 in marital equity, a baseball card collection worth $50,000, and a savings account with $150,000 in it. For our example, we'll assume that the entirety of each of these assets was accrued during the course of the marriage. The parties agree that they want to divide the marital assets equally, and that Husband will remain in the home. If it turns out that Husband can't get $50,000 cash to buyout Wife's one-half share of the equity held in the home, the parties in this example could instead agree that Husband takes the home outright ($100,000) and the baseball card collection ($50,000) and that Wife takes the entirety of the savings account ($150,000). Then, as you can see, without a single dollar changing hands, each party will receive $150,000 in marital assets/equity, which is the 50/50 equal split that the parties in this example desired.

Retirement accounts are often some of the largest assets a couple will have. When attempting to balance the distribution of assets, it's important to take taxes into account. For example, a dollar held in a pre-tax retirement account is not of the same value as a dollar held in, for example, a home, or a bar of gold, or a checking account, since the dollar held in the pretax retirement account (a 401(k), for example) has not yet been taxed. In the above example, let's say that instead of Wife receiving the savings account, she instead received a pretax 401(k) retirement account worth $150,000. For example, take the scenario of the Husband and Wife from the previous paragraph, but let's say that instead of the $150,000 savings account, the parties have pretax 401(k) with $150,000 in it. If Husband receives the equity in the home and the baseball card collection (combined value of $150,000) and Wife receives the 401(k) worth $150,000, is that distribution equal? No, since the dollars held in the 401(k) have not yet been taxed.

Parties in an uncontested divorce must determine who gets what vehicle(s) and who pays for the loans, if any, associated with those cars, boats, etc. Further, the parties will need to come to an agreement as to whether or not jointly held vehicle loans will need to be refinanced in order to remove the non-taking party's name from the note.

Are there joint accounts? If so, how are the contents of those joint accounts going to be divided? If one party has gotten a new bank account in their sole name, and the other party has continued to use the joint account as his or her account, assuming there is no division of the account contents, we can simply direct the party who is not using or taking the joint account post-dissolution to remove his or her name from that joint account. Of course, the party with the account in his or her sole name takes their account post-dissolution. If the parties are dividing the contents of the joint account and thereafter closing the account, that is fine too, but you will need to determine what percentage of the joint account each party will take as his or her sole and separate property.

You will need to figure out who is getting which investments and who is taking what retirement accounts. If the parties are dividing a retirement account, they will want to determine if a Qualified Domestic Relations Order (QDRO), will be necessary to facilitate the division of the account. If a QDRO is required, the Marital Settlement Agreement should outline how the costs associated with drafting and administering the QDRO will be split between the parties.

If the parties still have commingled household items, furniture, and personal items, then the parties should have a list of what each party will take after the divorce. The descriptions of these items and furniture, which you will provide to your attorney, should be specific enough so that if there is a dispute in the future, the item description clearly articulates which household good or piece of furniture is being identified.

The parties in an uncontested divorce will need to decide who is paying what loans. Jointly-titled loans provide an additional layer of complexity, as the parties will need to address whether refinancing of those loans will be required to remove the non-taking party's name from the note and, if so, how long the taking party will have to complete that refinance process.

Who is going to pay which credit cards? If you have credit cards where both parties are co-borrowers, I am of the opinion that those cards should be given priority in being paid off, so that they can be cancelled or, alternatively, so that the non-responsible party can be removed as a co-borrower from the card. It is also possible for clients and their spouse elect to each take out a loan or a credit card in their respective sole name to each pay off one-half of a joint credit card. This allows the debt to be apportioned in the divorce and provides that neither party will be adversely affected by the other party's failure to pay their 50% share.

Your tax status is determined on December 31st each year. If you are divorced on December 30, 2017, you cannot file a married tax return for tax year 2017. If you're divorced on January 1, 2018, you have the option to file married returns for 2017. Easy as that. Parties who are divorcing towards the end of the year can have me "sit" on their divorce past when I would normally submit the case for finalizing, because they are wanting to push back the date of divorce until after the new year. In these situations, the parties intent to file jointly should be outlined in the Marital Settlement Agreement, as well as how the parties plan on dividing any refund or deficiency attributable to that joint return.

Couples looking for an uncontested divorce need to consider things they may have done throughout the year that could lead to tax ramifications on one party or the other. For example, let's say in February that Husband and Wife decided to buy a house. In order to purchase this home, Husband took an early withdraw from his 401k. The year goes on and the parties decide to divorce. Their divorce is finalized in October and nothing is mentioned about the taxes that will have to be paid on Husband's 401(k) withdraw. The parties, being single on December 31st, file single tax returns. Husband learns that his tax liability includes the taxes from the withdraw from the 401(k). The resolution to this scenario, whatever it may end up being, is not important to communicating the message that the parties must consider (and address in the Settlement Agreement) what "actions," like a 401(k) withdraw, may have occurred during the course of the marriage that will affect the tax liability of one of the parties.