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Arizona Community Property Laws – Who Gets What?

Arizona Community Property Laws – Who Gets What?

by | May 18, 2020 | Annulment, Divorce, Legal Seperation

Defending the People of Arizona

With more than 100 Years of combined experience

Arizona Community Property Laws – Who Gets What?

When you go through a divorce in Arizona, you and your spouse will have to divide your property and debts. How your property will be divided will depend on when it was acquired and whether you have a prenuptial or postnuptial agreement in place.

The attorneys at the Schill Law Group can help you to understand the community property laws of Arizona and advise you about the potential tax consequences and other issues that might arise during the property division portion of your case.

How is Property Divided in Arizona Divorces?

While some states are equitable division states for divorce cases, Arizona is what is known as a community property state. Under A.R.S. § 25-211, all of the assets and property that are accumulated during your marriage are considered to be community property with the following exceptions

  • Property that one spouse inherits
  • Property that is given as a gift to only one spouse
  • Property that is obtained after a divorce or separation petition has been filed

[1] Community property is considered to be equally owned by both spouses. This means that the community or marital property will be divided equally between each spouse during the property division portion of the divorce.

How are Debts Handled in a Divorce?

Like the assets that you accumulate during your marriage, the debts that you and your spouse have accumulated are also considered to be community debts and subject to division in your divorce. Handling the division of debts in your divorce can raise some important issues.

If the judge orders that your spouse is responsible for repaying a debt that has both of your names on it, your credit score can be harmed if your spouse fails to pay it on time. This is because your creditors are not parties to your divorce case, and they are not required to follow the family court’s orders.

If you have joint debt with your spouse, you should try to either jointly pay them off before your divorce is finished. If that’s not possible, you should contact the companies to try to get your name removed.

If your spouse is allocated the responsibility for repaying a jointly held debt after your divorce but fails to fulfill his or her obligation, you will need to repay it yourself to avoid damage to your credit.

You can file a motion with the court to hold your spouse in contempt for failing to meet his or her obligations to seek reimbursement for the amount that you had to pay for the debt that was allocated to him or her.

What is Separate Property?

Under A.R.S. § 25-213, the separate property includes the property and liabilities that each spouse brought into the marriage. It also includes inheritances that are received by one spouse and gifts that are given to only one spouse during the marriage.

Separate property is not subject to division in a divorce and instead remains the sole property of the spouse who owns it. However, property that becomes commingled with the marital property during a marriage may lose its separate nature and be included in the marital estate.

For example, if one spouse inherits money, deposits it into a joint bank account, and uses some of the funds to pay for bills and other items during the marriage, it might be considered to be commingled with the marital estate and subject to division.

If a spouse who inherits money instead keeps it in a separate account and does not use it to pay for community debts, it should retain its separate nature and avoid being divided in a divorce.

What is the Effect of a Prenuptial or Postnuptial Agreement?

A prenuptial or postnuptial agreement is a legal agreement that both spouses enter into either before or after their marriage. Prenuptial agreements have become more popular. If your fiancé presents you with a proposed prenuptial agreement, you should consult with a family law attorney at the Schill Law Group before you agree to sign it.

A prenuptial agreement may be used to waive your rights to certain types of property in the property division of any future divorce. It can also be used to waive your right to seek spousal maintenance.

If a prenuptial agreement is in place, it could prevent you from getting some of the assets that would otherwise be considered to be marital property in your divorce. For example, if your spouse had a business before your marriage, you may not be able to get your portion of the increased value of the business in your divorce if you waived your rights to it in a prenuptial agreement.

A Phoenix divorce attorney at the Schill Law Group can review a prenuptial agreement to determine whether it is valid and how it might affect your rights. If the agreement was not entered into or drafted correctly, the court may disregard it and order the community property to be divided between you and your spouse as if it did not exist.

A prenuptial agreement can be challenged and might be set aside by the court for the following reasons:

  • You entered into it involuntarily.
  • Your spouse failed to disclose the extent of his or her assets.
  • The prenuptial agreement was unconscionable at the time that it was drafted.
  • The prenuptial agreement resulted from fraud, coercion, or duress.

Proving that a prenuptial agreement should be set aside will require some investigation and evidence. If it is set aside, you will then proceed with a normal property division in your divorce.

It is important to note that a prenuptial agreement will not be set aside simply because you made a bad deal or that your circumstances have changed since you signed it.

What Happens if a Spouse is Concealing or Hiding Assets?

In some divorces, one spouse will try to hide his or her assets, transfer them to others, or spoliate them simply to prevent the other spouse from getting his or her fair share. If you believe that your spouse is hiding assets to prevent you from receiving what you should, working with an experienced attorney is important.

A lawyer can work with forensic accountants and other experts to locate assets that your spouse has hidden. If it is impossible to locate everything, your attorney can present evidence to the court and ask for the judge to draw an adverse inference based on your spouse’s conduct.

Have an Aggressive Phoenix Divorce Attorney on Your Side.

Dividing your property and debts in a divorce can be complicated. If you have been married for years and have accumulated substantial assets, the process can be even more complex.

The attorneys at the Schill Law Group have handled hundreds of complex divorce cases and are experienced in handling all types of property division matters. Contact us today to schedule a consultation by calling us at 480.525.8900.

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High Net Worth Divorce in Arizona

High Net Worth Divorce in Arizona

by | May 4, 2020 | Alimony, Annulment, Divorce, Legal Seperation, Parenting, Paternity

Defending the People of Arizona

With more than 100 Years of combined experience

High Net Worth Divorce in Arizona

When younger couples get divorced in Arizona, the process may be fairly straightforward because they may not have had much time to accumulate very many assets. However, if you have been married for a long time and have built substantial assets during your marriage, you may have to go through a type of dissolution called a high net worth divorce.

This type of divorce can be very complex because of the different types of assets that may be involved. High net worth divorces may involve complex asset classes and holdings worth hundreds of thousands up to millions of dollars. People who go through these types of divorces will likely need to get the help of a competent family law attorney who is experienced in handling high net worth divorce cases.

The Schill Law Group understands complex asset and debt division matters and is prepared to help.

How is a High Net Worth Divorce Different from a Regular Divorce?

A high net worth divorce will frequently involve complex legal and business issues that are not involved in regular divorces. High net worth couples may have vastly more extensive assets, including businesses, real estate holdings, art collections, trusts, stocks and bonds, investment accounts, retirement accounts, jewelry, and more. All of these types of assets may need to be identified, located, and valued to accomplish an appropriate division of property.

Under A.R.S. § 25-211, Arizona is a community property state.[1] This means that all of the assets that you have accumulated during your marriage that are not deemed separate property are considered to be equally owned by both spouses and subject to equal division. In many high net worth divorces, however, there may be antenuptial agreements in place.

High net worth divorces are likelier to include disputes about whether certain assets should be considered to be separate or community property.

How are Trusts Handled in High Net Worth Divorces?

Some wealthy couples have trusts established to hold substantial amounts of their assets. The handling of the assets of a trust can be crucial for the outcome of the property division in a high net worth divorce. When a spouse funds a trust with community property, it can transform the assets in the trust from being considered to be the separate property of that spouse to being considered to be the community property of both spouses to be divided in the divorce.

Normally, a trust that was created by a third party to benefit one spouse but not the other will be considered to be the beneficiary spouse’s separate property. The other spouse might argue that the court should consider the trust when it determines the amounts of spousal and child support that the other spouse should be granted.

When a trust is involved in a divorce, an attorney will need to seek disclosure from the trust. This can be hard because trust accounts may be located outside of the U.S. Trustees for U.S. trusts will normally send disclosures in response to a request. Offshore trusts might have trustees that fail to respond. When that happens, you might have to file a petition with that country’s court to seek an order for the trustee to provide disclosures.

How are Businesses Handled in Divorces?

Many high net worth divorce cases involve private businesses. When a private company is owned by one of the spouses, multiple complex issues will need to be addressed. The business will need to be properly valued. If the company has assets that are spread around the world, the valuation will be more complex. Often, business valuations will require significant investigations and the work of forensic accountants.

After a business valuation is completed, the divorcing couple will then need to determine how to distribute it in the property division portion of their divorce. One spouse may not be willing to give up his or her interest in the company. The spouse that wishes to keep control of the company might need to give a larger portion of the other assets to his or her spouse to retain control of the business.

How is Real Estate Handled in a High Net Worth Divorce?

While a regular divorce might involve dividing the marital home, high net worth divorces may involve real estate holdings beyond the home. Wealthy couples might have rental properties, commercial properties, and vacation homes. An appraisal of each of the various properties that are owned will need to be completed to understand what their fair market values are.

Some of the real estate properties might be the separate property that one spouse brought into the marriage. Other properties might be community property. Finally, some separate real estate might become community property if marital funds were used to make improvements. All of these issues will need to be addressed to ensure a fair division of the property.

Types of Complex Valuations in a Divorce

There are multiple types of complex valuations that might be necessary for a high net worth divorce. Some of the types of valuations that might need to be completed include the following:

  • Retirement accounts
  • Investment accounts
  • Stocks and bonds
  • Jewelry
  • Art collections
  • Intellectual property
  • Real estate
  • Businesses
  • Yachts
  • Other valuable assets

Different experts might have to value the assets from within their fields and submit written appraisals. In some cases, each spouse will hire his or her experts to testify about how they arrived at their valuations.

Spousal Maintenance in High Net Worth Divorces

Under A.R.S. § 25-530, spousal maintenance is a type of support that may be ordered by the court in cases in which the divorcing spouses have a large income disparity. Spousal maintenance is in addition to any child support that might be ordered, and it is frequently at issue in high net worth divorces. However, some cases involve prenuptial agreements through which the lower-earning spouse may have waived his or her rights to spousal maintenance.

In those types of cases, the lower-earning spouses might challenge the prenuptial agreements’ validity and claim that he or she signed under duress. A lower-earning spouse might also claim that the wealthy spouse failed to disclose all of his or her assets, meaning that the lower-earning spouse could not understand the rights that he or she was waiving.

Managing tax implications involved with asset division

Many tax implications might be involved in high net worth divorces. Both spouses will need to consider credits and deductions that might be lost after divorcing. Spouses who will have to pay spousal maintenance are not able to deduct the payments on their taxes any longer, and spouses who receive spousal maintenance are required to report the payments as income on their tax returns.

Transferring certain assets in divorces can trigger tax consequences. Some of the illiquid assets that might involve tax issues include the following:

  • Brokerage account funds
  • 403(b) accounts
  • 401(k) accounts
  • IRAs
  • Stock options
  • Annuities
  • Thrift savings plans

To prevent tax consequences when transferring some of these illiquid assets, a qualified domestic relations order may need to be prepared. This might help people to avoid penalties and taxes on what is transferred.

Concealment of Assets During a Divorce

Unfortunately, some spouses try to conceal or hide assets to prevent their spouses from getting their rightful share in divorces. They might try to transfer assets to family members or friends, hide them, or spoliate the assets. Others simply do not disclose all of their assets. For example, they might have accounts that are not disclosed and transfer funds from disclosed accounts to make it appear as if they have less. They might also move assets to offshore locations or place community assets in trusts.

Whenever a spouse believes that the other spouse is concealing or hiding assets, he or she will need to get help from an experienced attorney. A lawyer might work with a forensic accountant to find assets that have been spoliated, hidden, or concealed. If it is not possible to determine the extent of the person’s actions, the court can draw an adverse inference against the spouse who has engaged in this type of behavior.

Schill Law Group Experienced High Net Worth Attorneys

If you have accumulated substantial assets during your marriage and want to get divorced, getting help from an experienced high net worth divorce lawyer at The Schill Law Group is important. Our experienced property division and divorce lawyers understand how to handle the complex issues that are frequently involved in these types of divorces.

Contact us today to schedule a consultation by calling us at 480.525.8900.

 

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In the Child’s “Best Interest”: How to Negotiate for Custody and Visitation

by | Feb 28, 2018 | Child custody, Child Support, Custody, Divorce

Defending the People of Arizona

With more than 100 Years of combined experience

In the Child’s “Best Interest”: How to Negotiate for Custody and Visitation

Divorces can be very rough on children. When two parents make the decision to separate from one another, the children may experience significant changes in their lives, and that can result in fear, anxiety, and even anger. In order to minimize these negative feelings, the Arizona court system works diligently to ensure that any decisions that are made regarding the divorce are in the “best interest” of the children involved. What does this mean, exactly? Taking a closer look at what constitutes the best interests of a child will help you ensure a smooth transition for your kids and prepare for court.

Putting Children First

As a parent, your job is to protect and provide for your children. This means that you are always going above and beyond the call of duty in order to ensure that your children are happy and healthy. Divorce doesn’t change any of that. Even when you and your child’s parent make the decision to divorce, your goal is to take care of your kids to the best of your ability. Although emotions and tensions may run high during a divorce, it’s imperative that you work to put your children first when trying to negotiate living arrangements, visitation schedules, child support agreements, etc. Partnering with an experienced lawyer from Schill Law Group can make the process of negotiating with your spouse much easier, and will ensure that someone is fighting on behalf of you and your children, even if you and the other parent can’t reach an agreement outside of the courtroom.

Allowing for Ample Parenting Time

Regardless of how you may feel about your child’s other parent, your child deserves the opportunity to have a positive and healthy relationship with their mother or father. You, your lawyer, and your spouse must come up with a schedule that allows for ample parenting time for both parties. You will need to consider which holidays and traditions are important to your child, and how time should be shared amongst yourselves so that the child is able to stay connected with both sides of his or her family. You will also need to consider how close you and the child’s other parent live to one another, and what is practical in terms of shared living arrangements or visitation. If a child lives far away from one parent, the two should have a regular schedule for communicating via telephone or webcam.

Constant Communication

Even after divorce, communication is essential for ex-partners who are co-parenting their children. If both parents have shared custody, both have the right to make decisions about the child’s upbringing and welfare. This means that if an incident occurs related to the child’s health, schooling, or behavior, both parents should be informed and involved. Without adequate communication, this cannot happen. It’s very important that the child receives input from both parents in order to live a happy and well-adjusted life.

Safety First

It’s always imperative that you consider the safety of your child before anything else. If you believe that the child’s other parent may be abusing drugs or alcohol, or may have violent tendencies, it is your responsibility to protect your kids. This doesn’t mean that you can withhold visitation from the other parent on your own, though. You will need to go through the court system and all of the proper channels in order to protect yourself and your children.

Divorce doesn’t have to be a traumatic experience for children. When the child’s best interests are taken into consideration, he or she can grow up to be healthy and happy. Contact the team at Schill Law Group today to start building a case for your child’s best interests in your divorce.

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Divorce and Kids: Steps to a Smooth Transition

by | Feb 19, 2018 | Child Support, Custody, Divorce, Legal Seperation, Parenting

Defending the People of Arizona

With more than 100 Years of combined experience

Divorce and Kids: Steps to a Smooth Transition

Divorce is extremely stressful, and things only get more complicated when there are children involved. For children, divorce can be confusing and scary. As a parent, it’s your job to make sure that as you and your spouse transition into a life separate from one another, your sons and daughters are able to make that transition as smoothly as possible. Here’s a look at a few tips for minimizing the amount of stress and anxiety placed on your children during the divorce process.

Hire an Attorney

The first step to keeping your divorce simple and stress-free for your kids is to hire a divorce attorney right from the get-go. Schill Law Group has worked with countless individuals and families going through the divorce process and understands what it takes to create a safe and nurturing environment for children after their parents have separated. Our team can work with you to come to an agreement with your ex with regards to legal custody of the children, living arrangements, child support, visitation schedules, and more. Having an attorney work with you on these types of arrangements is a critical part of keeping things civil between you and your former spouse so that your children can transition into this new way of life without fear and anxiety. Working with legal representation helps to remove much of the emotional turmoil and drama so that you can focus on what’s truly best for the kids.

Establish Paternity

When a child is born, there’s no question of who the mother is. Even in committed, long-term marriages, though, paternity can come into question. Without legally establishing paternity, a father may find himself stripped of his parental rights. Conversely, without the legal establishment of paternity, a mother may be forced to grant visitation to a man who is not legally the father of her child. It’s a good idea to go through all of the proper channels and legally establish paternity in order to guarantee that no problems arise as the result of your failure to do so.

Obey Court Orders

Once the court makes a ruling about custody, visitation (or “parenting time”), and/or child support, you must comply with this ruling. Even if you disagree with the decision that was initially made, you should never violate a court order as this can lead to much more trouble. Trying to keep your kids longer than the allotted visitation period, for example, could result in a kidnapping charge or you could be held in contempt of court. This is very traumatic for your children and could result in your inability to spend any time with them at all. Failure to pay child support in full and on time, too, is a huge mistake. You may believe that the amount is unreasonable, but that doesn’t mean that you can make the decision not to pay. This is harmful to your children and could lead to penalties. It’s imperative that you always go through the court and petition for changes to be made to the ruling instead of doing whatever you believe is right and fair.

Work Together

Wherever possible, it’s always in the best interest of you and your children to work to cooperate with your ex and keep communications open at all times. Your relationship with your ex will impact your children whether you realize it or not, so try to work together and keep things civil. Trust us – though it may be difficult with some couples, we urge you to grin and bear it for everyone involved.

If you’re going through a divorce with children, you absolutely need someone on your side. The Schill Law Group is experienced in this area and is ready to help you today. Reach out to us for a free case evaluation.

How Could the New Tax Reform Bill Impact Alimony Deductions?

by | Jan 22, 2018 | Alimony, Divorce, Legal Seperation, Tax Reform

Defending the People of Arizona

With more than 100 Years of combined experience

How Could the New Tax Reform Bill Impact Alimony Deductions?

All Americans will be impacted by the new tax reform bill in one way or another. For those who are going through the divorce process, however, the bill could make its mark in the immediate future. We’ve been keeping our eye on the Tax Cuts and Job Act and the ways in which it has promised to play a role in spousal support awards in 2018 and into the future.

Arizona Spousal Support 101

Frequently referred to as “alimony,” spousal support is sometimes awarded to one spouse in a divorce by an Arizona judge. This typically happens when one spouse has been the primary “bread winner” for the family throughout the years while the other spouse has taken time away from work to raise the family or care for the home. Here, a judge will order the spouse with a higher income to make support payments to the other party for a limited period of time, thus encouraging him or her to become financially independent. In other instances, spousal support may be ordered for a longer period of time, such as in situations where one spouse is disabled or unable to work.

The amount of spousal support awarded by an Arizona judge will depend on a number of different factors. A judge will consider the income of both spouses, the education and work experience of the spouse who will be awarded spousal support, the length of the marriage, etc. Ultimately, the intent of spousal support is to ease the process of transitioning into a new post-divorce life. Schill Law Group has worked on a number of Arizona spousal support cases and has pushed for fair and reasonable judgments that allow for a smoother divorce or separation.

Tax Laws and Arizona Spousal Support

Traditionally, the spouse who has been ordered to pay spousal support has received some benefit for doing so. This benefit has come in the form of tax deductions. While the paying spouse is entitled to a tax deduction on annual income tax forms, the receiving spouse is required by law to claim it as income and pay taxes on it. Unfortunately, the IRS has reported that there have been many problems with this system. In fact, the IRS claims billions of dollars worth of discrepancies between the amount of money that payees are claiming as alimony deceptions versus the amount of money that recipients are claiming as income and paying taxes on.

The New Tax Reform Bill and Arizona Spousal Support

The new tax reform bill has made an effort to correct these disparities by completely axing the alimony deduction from income taxes beyond 2017. While the idea is to help the national economy and the IRS, many Arizonans – and people throughout the country – have concerns about what the implications may be for divorces in 2018 and beyond. Critics are worried that both payers and recipients of spousal support may be negatively impacted. Obviously, those ordered to pay spousal support will no longer be able to enjoy the tax break each year, thus causing them to lose more money to the government. On the flip side, critics say that recipients may receive less spousal support because the payers will be giving more of their money to Uncle Sam.

Because the tax reform bill will only impact those getting divorced after January 1, 2018, we will only start to see the true implications of the law on spousal support cases in the weeks and months ahead. Regardless of what happens, you can count on the fact that Schill Law Group has what it takes to fight for your best interests and for what’s fair. Give us a call for a free case consultation to get started today.

FAQ on Child Support Delinquency in Arizona

by | Jan 15, 2018 | Child Support, Divorce, Parenting

FAMILY ATTORNEYS

With more than 100 Years of combined experience

Child Support Attorneys

Although every divorce is different, many Arizona divorces that involve children result in one parent being ordered to pay child support to the other parent. A judge will consider the income of both parents, the household in which the child or children will spend the majority of their time, the number of children in question, and other factors before determining how much the paying spouse will need to send to the other on a monthly basis. Child support payments can be altered or adjusted over time as income changes, but whatever the ordered amount may be, the paying parent is required by law to make the payment in full and on time.

Despite the fact that the Arizona court system takes child support very seriously, Schill Law Group continues to see many instances of delinquent payments. For one reason or another, the paying parent may fail to pay the correct amount of child support, make late payments, or fail to make payments at all. What can be done about this? Understanding the repercussions of shirking child support obligations is an important part of protecting yourself and your family.

Reasons for Child Support Delinquency in Arizona

Throughout the years, Schill Law Group has witnessed many different child support delinquency cases. In each situation, the delinquent parent has a reason for why he or she failed to make the required child support payments in a timely manner. Some of the explanations for child support delinquency include:

  • Loss of a job
  • Reduction of income
  • Changes to or loss of medical insurance coverage
  • Injury or disability of the parent
  • Changes in childcare costs
  • Incarceration
  • Arguments or misunderstandings between parents

Even in situations where there is a legitimate reason why the paying parent may have fallen behind on child support (such as the loss of a job), the paying parent is still held accountable by the Arizona courts. An individual cannot simply make the decision to stop making payments or reduce the amount being paid without going through the court. Proper steps must be followed in order to adjust the amount of child support. Attempting to take matters into your own hands can lead to serious consequences.

Consequences for Child Support Delinquency in Arizona

As soon as the paying parent becomes delinquent on a child support payment, the other parent has the right to seek legal representation and go to the courts to enforce the child support order. In some cases, the Arizona Department of Child Support Services will become involved and will take steps to garnish the paying parent’s wages, seize assets, revoke his or her driver license, or put a lien on his or her property. In addition to this, an Arizona judge may hold the paying parent in contempt of court and can issue a warrant for his or her arrest. The paying parent may then receive jail time for the delinquent child support payment, and could also be subject to additional fines.

Legal Action for Child Support Delinquency in Arizona

Regardless of whether your child’s parent has become delinquent on child support payments, or if you yourself have fallen behind on making court-ordered child support payments, it’s important to seek legal representation immediately. Arizona courts take child support seriously, and specific steps can and should be taken in order to ensure that the best interests of the child or children in question are met. The Schill Law Group has the experience required to help navigate the situation in a way that will allow for the best and fairest outcome for all parties involved.

Do you require legal assistance with your child support delinquency case? Don’t hesitate to reach out to the team at Schill Law Group. Call us to schedule a free case evaluation today.

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