I am getting ready to file for divorce here in Arizona. Can I take all the money out of our Scottsdale joint savings account?

No, because although the temporary injunction is not in place, you are intending to file and it is not fair to take all the money out of any joint accounts you have in Arizona. You may take half of the money, and this should not cause any problems in case you have to explain this to a judge.

During a divorce in Arizona, what if neither of us can afford the house in Scottsdale?

This is no different than if you were together. You have the same problems and issues as if you were together (divorce just makes it more difficult). The mortgage company expects both of you to pay. If there is a deficiency judgment because of a line of credit, the creditor will look to both of you to pay, no matter what your divorce agreement says. Decide who pays for repairs during the dissolution, who should sell and how long they have to sell. If one party agrees to buy out the other party, you need to agree when you appraise the house.

What happens when spouses in Arizona own a business together?

During the divorce process here in Arizona, the court will usually attempt to keep the things the way they presently are when it comes to the day-to-day operations of a family business. A business valuation expert can assess the value of the business during the divorce matter. Arizona courts, with the input from the business valuation expert, will determine the value of the family business. The spouse that is ultimately awarded the business may be required to pay the other spouse that individual’s share of the business. That amount is normally one-half of the value assigned to the family owned business. You should consult an attorney for this matter.

What if my spouse does not pay the community debts as ordered in the final decree? Can our creditors force me to pay?

Yes, Arizona Revised Statute 25-318 states that a creditor can collect a marital debt from either spouse, regardless of which spouse is ordered to pay the debt by the court. The innocent spouse then has the right to recover from the obligated spouse. If a party fails to comply with an order to pay debts, the court may enter orders transferring the property of that spouse to compensate the other party.

What does a property settlement agreement do?

A Property Settlement Agreement lays out and explains how your property will be divided. If the court ultimately decides how your property will be divided, the property division will be explained in your decree, which is public record and can be read by anyone. If, however, you negotiate and draft a Property Settlement Agreement, you can incorporate this agreement by mere reference in your divorce decree. (This means that your decree will include language referring to your Property Settlement Agreement as the explanation of the property division).

Should you write your agreement or seek the advice of an attorney? It depends on the complexity of your situation. You may consider consulting an attorney so that you understand the family law statutes and how they apply to you. If there is an impasse between you and your partner, you do not need to go to court; you can mediate (settle) your dispute with a mediator, who is preferably an experienced family law attorney.

How do the vehicles get divided during my divorce?

Usually spouses have driven one vehicle and that is the one they want to keep. There may be an adjustment if one vehicle has a greater value than the other. For instance, if the truck has equity of $10,000 and the SUV has equity of $20,000, one person has $10,000 more value than the other. The truck spouse is due an additional $5,000 on his/her side of the ledger (the vehicles together equal $30,000 so each spouse should get a value of $15,000; the truck spouse only has $10,000 in value, so is due an additional $5,000)

What Happens if the House is Community Property? What if it is Sole and Separate?

Option one is one spouse stays in the house and makes all the payments; the parties get the house appraised and decide the value of the house. Then the party who wants to live in the house pays the other spouse half the value of the house. This can be paid with cash in a refinance or can be “horse-traded” with other assets. Option two is the parties can sell the house and split the proceeds equally. The parties can split the costs of upkeep until the sale, or they can decide that one party lives there and makes all payments until the sale. Or, one spouse could move out and then combine all living expenses, with each paying half of those total expenses or each paying their prorated share, according to each party’s income. Option three is one party stays in the house for a predetermined amount of time, such as one to two years, until a refinance must be undertaken.

There are a number of creative ways to determine the division; it is limited only by imagination and the ability to cooperate. The end goal is to split the proceeds 50-50 and not make the process more difficult than it needs to be for either party.

If only one spouse’s name is on the deed, or if one party owned the house prior to the marriage, it might be considered that spouse’s sole and separate property. This can become a complicated legal issue and you should seek the advice of an attorney if you have any questions.

How do deferred compensation accounts, 401k, and retirement benefits get divided during a divorce?

The court will split these 50/50 if it was all acquired during the marriage. There is no penalty to divide and the money is not removed from the accounts. After the division, each party is subject to IRS rules for prematurely withdrawing the money. One spouse cannot create a tax liability for the other spouse. The money/account should not be withdrawn during the pending divorce.

A Qualified Domestic Relations Order may be required if you are dividing your deferred compensation, 401k, or retirement benefits. If this is the case, a QDRO expert may be necessary to divide these assets. The QDRO expert will require information concerning the date of your marriage and the date of the plan to value, which is usually the date the QDRO expert actually divides the asset. You will need to contact a QDRO expert for this.

What Happens to Debts During a Divorce?

Arizona Revised Statute 25-318 provides that debt incurred during the marriage is presumed to be community debt. Generally, the court divides debt equally. Debt incurred by a spouse before the marriage remains the separate debt of that spouse. The court may also order the parties to submit a debt distribution plan. This means that within thirty (30) days after receipt of a written request for information from a litigant (which includes the court name and case number), a creditor shall provide the balance and account status of any debts of either party or both spouses, identified by account number, for which the requesting spouse may be liable to the creditor.

What is Considered Community Property?

According to Arizona Revised Statute, Section 25-211, generally, anything that a married couple accumulates during the marriage is considered community property, that is, both spouses own an undivided share of the whole. Exceptions to this general principle include those assets acquired prior to the marriage, by gift, devise (a will) or descent (inheritance). Because the Arizona courts start with a strong presumption that anything acquired during marriage is a community item, the spouse claiming a particular item is not community property has the burden of proving otherwise.

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