Arizona Divorce & Family Law Blog : Commentary on Arizona divorce, child custody, paternity, child support & family law litigation. : Arizona Family Law Lawyer & Attorney : Nirenstein Garnice Soderquist, PLC

In Wigand v. Wigand, Wife appealed from an order vacating a default decree of dissolution. Arizona Court of Appeals, Division 1 ,however,  agreed and set the Arizona divorce decree aside.

In this case, Wife filed for divorce in February 2008, and requested spousal maintenance, an equitable division of the community property and debts, and attorneys’ fees. Her petition also alleged that Husband wasted community assets during the marriage. Husband, who was living and working in New Mexico, accepted and waived service of process. 

Although Husband claimed that the parties were discussing a divorce settlement, Wife filed an application and affidavit for default, and the court subsequently entered a default decree. The decree awarded Wife $2895 per month in spousal maintenance for twelve years, the community residence (which had approximately $155,000 in equity), all personal property and the vehicle in her possession, the retirement account in her name, any debts that were incurred by her or in her name, and her attorneys’ fees. Husband received the car and personal property in his possession, the retirement account in his name, and any debts that were incurred by him or in his name. Five months later, Husband sought to set aside and vacate the default decree.

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Kate Walsh, star of the television show Private Practice (and formerly Grey's Anatomy), and her ex-husband have adopted a long-time but not-often used approach to dividing the community property.  The Stipulated Settlement Agreement provides:

"One-half of the community property furniture and artwork to be divided by alternating picks after the flip of a coin to determine who will pick first".

To read more about Kate Walsh and her divorce, check out the USA Today article "Kate Walsh, Ex To Divide Assets by Flipping a Coin". 

Believe it or not, sometimes this is the most amicable way to divide up personal property, especially when it does not have much value.  Both parties alternate in choosing until nothing is left.  Kind of like picking dodgeball teams.  For more information on community property, contact Arizona lawyers, Nirenstein Garnice Soderquist PLC.

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The Court of Appeals affirmed The Honorable Judge Hugh Hegyi's ruling in Frantz v. Frantz, 2009 WL 4981533 (Ariz.App. Div. 1), a case that dealt with an issue that is becoming more and more common in Arizona as a result of the State's heavy financial reliance of the real estate market. In Frantz, Husband appealed from a decree of dissolution arguing that the family court erred in its determination that a second lien secured by the marital residence was not a community obligation. At the dissolution hearing, Husband, Wife, and a real estate appraiser testified.  Judge Hegyi stated:

“In finding that the community has $92,000 in equity in the [residence], the court does not deduct the value of the $84,000 second lien on that property. It finds that WIFE has established by clear and convincing evidence that the lien is not a community obligation. The money was received by HUSBAND alone. HUSBAND alone had the ability to explain what happened to the proceeds of the loan, and has failed to do so. After observing the parties' demeanor in testifying, the court finds HUSBAND expended these proceeds in a manner that was not intended to, and did not, benefit the community."

Husband filed a motion to alter or amend the decree requesting that the court value the residence at $8,000 - an amount reflecting the fair market value minus any and all of the liens and encumbrances obtained by the parties during the marriage. The court denied Husband's motion.

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In an Arizona Divorce case, if you are injured during the course of your employment and are compensated for lost wages or medical expenses, then those proceeds are considered community property.  However, if you are compensated for injury to your well-being, then those proceeds are considered your sole and separate property.  The importance of this determination is that if you are getting divorced, the divorce court has the authority to divide community property between you and your spouse; however, they do not have authority to divide your sole and separate property. 

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While some couples are putting off divorce because they can’t afford it, the situation is different for moneyed clients. Since their assets are worth less, a lot of monied spouses believe the time is ripe to divorce because they will have to give less to the other spouse.  This may be especially true where the more financially empowered spouse wants to keep the marital residence and their 401(k) and other retirement plans.

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Absolutely. Although each person starts out owning all of his or her job-related income, many states allow this to be changed by an oral contract or even by a contract implied from the circumstances of how you live. These types of contracts often lead to misunderstandings during a breakup. For example, if there's no written agreement stating whether income will be shared or kept separate, one partner might falsely claim the other promised to split his income 50-50. Although this can be tough to prove in court, the very fact that a lawsuit can be brought creates a huge problem. For obvious reasons, it's an especially good idea to make a written agreement if a person with a big income is living with and supporting someone with little or no income.

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If you haven't been together long and don't own much, it's really not necessary to make a written agreement. But the longer you live together, the more important it is to prepare a written contract making it clear who owns what -- especially if you begin to accumulate a lot of property. And, if you buy a house together, it's a good idea to create a property agreement.

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Define who gets what if you divorce.

Without a prenup, state law will specify how your property will be divided if you ever divorce. These laws may dictate a result that neither of you wants. You can use a prenup to establish your own rules for property division and avoid potential disagreements in the event of a divorce. In most states, you can also make agreements about whether or not one or both of you will be entitled to alimony. Some states forbid or restrict agreements about alimony, however. That will be discussed soon on what you "can't" do with a prenup.

Copyright © 2006 Nolo

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Keep property in the family.

If your property includes something you want to keep in your birth family, whether it be an heirloom or a share in a family business, you and your spouse can agree that it will remain in your family, and you can specify that item in your prenup. This can even include property that you expect to receive in a future inheritance.

Copyright © 2006 Nolo

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Provide for children from prior marriages. A prenup is helpful (perhaps essential) if either of you has children from another relationship and you want to make sure that your children inherit their share of your property. In a prenup, one or both spouses can give up the right to claim a share of the other's property at death, perhaps in exchange for an agreed upon amount of property.

Copyright © 2006 Nolo

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Protect each other from debts. Some of us bring debts, as well as assets, to a marriage. If there's no prenup, creditors can sometimes turn to marital or community property to satisfy the debts of just one spouse. But if you want to make sure that saying "I do" does not mean saying "I owe," you can use a prenup to limit your liability for each other's debts.

Copyright © 2006 Nolo

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A purchased policy that pays a fixed amount of benefits every year -- although most annuities actually pay monthly -- for the life of the person who is entitled to those benefits. In a simple life annuity, when the person receiving the annuity dies, the benefits stop; there is no final lump sum payment and no provision to pay benefits to a spouse or other survivor. A continuous annuity pays monthly installments for the life of the retired worker, and also provides a smaller continuing annuity for the worker's spouse or other survivor after the worker's death. A joint and survivor annuity pays monthly benefits as long as the retired worker is alive, and then continues to pay the worker's spouse for life.

Copyright © 2005 Nolo

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"Tenancy in Common" is a way two or more people can own property together. Each can leave his or her interest upon death to beneficiaries of his choosing instead of to the other owners, as is required with joint tenancy. In some states, two people are presumed to own property as tenants in common unless they've agreed otherwise in writing.

Copyright © 2005 Nolo

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A special kind of property ownership that's only for married couples. Both spouses have the right to enjoy the entire property, and when one spouse dies, the surviving spouse gets title to the property (called a right of survivorship). It is similar to joint tenancy, but it is available in only about half the states.

Copyright © 2005 Nolo

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A method for defining the ownership of property acquired during marriage, in which all earnings during marriage and all property acquired with those earnings are considered community property and all debts incurred during marriage are community property debts. Community property laws exist in Arizona, California, Idaho, Nevada, New Mexico, Texas, Washington, and Wisconsin.

Copyright © 2005 Nolo

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In community property states, property owned and controlled entirely by one spouse in a marriage. At divorce, separate property is not divided under the state's property division laws, but is kept by the spouse who owns it. Separate property includes all property that a spouse obtained before marriage, through inheritance or as a gift. It also includes any property that is traceable to separate property -- for example, cash from the sale of a vintage car owned by one spouse before marriage-and any property that the spouses agree is separate property.

Copyright © 2005 Nolo

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Alimony, also called spousal support, means paymenta by one spouse to another following a divorce. Courts don't always grant alimony, but where the marriage was long and one spouse earns a lot more than another, or one spouse left the workforce in order to raise children or manage the household, alimony is fairly common.

You must keep adequate records if you are paying or receiving alimony. This point cannot be over-emphasized. Frequently after a divorce, the spouses dispute, or the IRS challenges, the amounts that were actually paid or received. Without adequate documentation, the payer may lose the alimony tax deduction and/or be ordered to pay back support if the other spouse makes a claim in court.

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Lump Sum Support

In several states, a spouse may pay the total alimony obligation at the time of the divorce by giving the other spouse a lump sum payment equal to the total amount of future monthly payments.

If you accept a lump sum alimony payment, you may face tax consequences. For example, if you receive a lump sum payment that's referred to as "alimony" in your divorce decree, you may be subject to taxes on the full amount for that year. But if the same payment is called a "settlement," you may not be taxed. Don't sign any documents or agree to any terms until you've consulted an expert, such as an accountant who specializes in divorce issues. The money you spend on a consultation could be peanuts compared to what you might owe in income taxes.

To find out more about your state's alimony laws, go to your local law library or go online to the free legal research center at www.nolo.com, and click on "Statutes and Cases."

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It is common for a divorcing couples to decide about dividing their property and debts themselves (with or without the help of a neutral third party like a mediator), rather than leave it for the judge to decide. If however, a couple cannot agree, they can submit their property dispute to the court, which will use state law to divide the property.

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