Written by Canterbury Law Group

Explaining Custody Orders to Children

In Arizona family courts, judges often do everything in their power to keep divorce proceedings from negatively impacting children’s emotional well-being, especially when there are contentious custody proceedings taking place. Most judges discourage parents from even speaking to the children about custody disputes. However, at some point parents getting a divorce will eventually have to explain the divorce and custody arrangements to the children. It will have to be done regardless of the type of custody arrangement the court ultimately orders.

Explaining custody to a child can be a bit difficult if the child is still quite young. The process may be easier for an older teen, but they are still emotionally vulnerable as well. You can always ask for family Law help in Scottsdale to get pointers in explaining custody arrangements to children. Here are several tips from divorce experts who have navigated these waters before you:

Tell Them the Important Facts of the Custody Arrangement

You don’t need to explain the intricate legalities of joint or sole custody to children. However, you will have to explain terms of the custody arrangement as simply as possible, because it will affect them more profoundly than you. Here are the things you should tell children:

  • With which parents the kids will stay, or how much time they will have to spend at each parent’s house. These courts ordered parenting time allocations are not optional and must be followed by both parents, and the children.
  • The parent who will drop them off and pick up from school.
  • The parent who will handle transportation.
  • Repeatable schedules with each parent.
  • Living arrangements for the summer or annual vacation times (e.g. Spring or Fall Break).

Avoid Distressing Subjects

You don’t have to explain to children why the custody arrangement is the way it is, or why the parents went through a divorce. Do not bad mouth the other parent in front of the children, either. Doing some of these things may even land you in trouble with the court. Do not discuss child support, alimony or other money issues with the children either. If something is not of immediate concern to the wellbeing of the child, avoid the subject.  Money and property and other adult issues should remain discussed between counsel and the parents, not the minor children.

Let Them Know They are Loved

Children of divorced parents may experience a host of negative emotions, including feelings of abandonment or guilt. Some children feel like it is “their fault” that Mom and Dad split up.  It’s important to let the children know that both parents love them even if the parents are now divorced. Don’t leave any room for them to be alarmed about the custody arrangement. Show them that it is in their best interest. If the children have to spend time at two locations, tell them it is so because both parents want to take part in both their lives. Explain custody in a positive note so children are not unnecessarily distressed and worried with the new realities post-Decree.

Let them Feel Comfortable with Lawyers and Mediators

Children in the middle of contentious divorces may have to put up with strangers whom they keep encountering like lawyers and court-appointed advisors or interviewers. It’s important that children become familiar with these people and this process and not feel ambushed.  If explaining custody is too much for you, you can ask your lawyer to gently break the news to them. The lawyer will be familiar with what information is allowed by the court and what is not, to tell directly to the children.

It’s never easy to discuss divorce or custody with children. Hopefully, the above suggestions will help.  Regardless, you should rely on your chosen legal professional to help you navigate these critical and choppy waters.

Written by Canterbury Law Group

Married Debt

Whether you are liable for your spouse’s debts depends on whether you live in a community property or equitable distribution state.

Whether you and your spouse are responsible for paying each other’s debts will depend primarily on where you live. If your state follows “common law” property rules, spouses are only liable for their own debts, with a few exceptions. For instance, both spouses must pay debts for family necessities like food, shelter, or tuition for the kids, although how states treat joint and separate debts varies slightly, so you’ll want to check your state laws.

However, if you live in one of a few states with “community property” rules, both you and your spouse will owe most debts incurred by either one of you during the marriage.

Keep reading to learn more about:

  • when you owe your spouse’s debts, and
  • how community property laws will affect you and your spouse in bankruptcy.

If you plan to file for bankruptcy in California or another community property state, you’ll want to know about the “limited community property discharge” that arises when only one spouse files for bankruptcy. Although all community property will be safe from creditor collection, the nonfiling spouse’s separate property will remain at risk.

Community Property States

The states that follow community property rules are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. (In Alaska, spouses can sign an agreement making their assets community property, but few people choose to do this.)

When Are You Responsible for Your Spouse’s Debt?

In community property states, most debts incurred by either spouse during the marriage are owed by the “community” (the couple), even if only one spouse signed the paperwork for a debt. The key here is during the marriage. So if you incur a debt, such as a credit card balance, while you’re single and then get married, it won’t automatically become a joint debt. However, an exception can occur when a spouse signs on to an account as a joint account holder after getting married. Some states, like Texas, have a more nuanced way of analyzing who owes what debts by evaluating who incurred the debt, for what purpose, and when.

After a legal separation or divorce, only the spouse who incurred the debt owes it unless the debt was incurred for family necessities, to maintain jointly owned assets (for example, to fix a leaking roof), or if the spouses keep a joint account.

If you’re considering wiping out debt in bankruptcy with a debt discharge, start by learning how bankruptcy works and what to avoid before filing for bankruptcy.

How Are Income and Property Shared Between Spouses?

In community property states, couples share income, as well. All income earned by either spouse during marriage and property bought with that income is community property, owned equally by husband and wife. Gifts and inheritances received by one spouse and separate property owned before marriage that remains separate are the respective property of one spouse alone. Comingling a gift or inheritance, such as by adding it to a joint bank account, could erase the protection. All income or property acquired after a divorce or permanent separation is also separate.

What Property Can Be Taken to Pay Debts?

In a community property state, creditors of one spouse can go after the assets and income of the married couple to make good on joint debts, and remember, most debts incurred during marriage are joint debts.

You’ll find out more about when you’re responsible for your spouse’s business debt here.

Creditors can go after joint assets in a community property state no matter whose name is on the asset’s title document. For example, a business owner’s name might not be on the title to her spouse’s boat. Still, in most community property states, that won’t stop a creditor from suing in court to take the boat to pay off the business owner’s debts assuming the boat was purchased with community funds and not separate funds.

Community property collection rules also apply to a spouse’s separate debt, such as one spouse’s child support obligation from a prior relationship, or a debt in one spouse’s name only where the spouse hid the marriage. In that case, a creditor can go after only that spouse’s half of the community property to repay the debt.

Do You Owe Your Spouse’s Student Loans?

With one exception (see below), the community property rules apply to student loan debt the same way they apply to other debts acquired during the marriage. Both spouses are responsible 100% for a student loan taken out during the marriage even though only one spouse signed for it. When the parties divorce, each spouse will be awarded 50% of the debt in the property settlement.

California presents an exception to the rules applied in other community property states. According to California law, student loans aren’t community debts, and a judge doesn’t have to split this kind of debt 50/50.

Recognizing that a student loan can benefit both spouses, California takes a more equitable approach than other states. In assigning each spouse a percentage of the outstanding student loan, a judge will consider factors like:

  •  the effect of the course of study on the community
  •  whether the other spouse also went to school, and
  •  the course of study’s effect on the spouse’s ability to support the community.

How to Remove a Spouse’s Liability

Couples in community property states can sign an agreement with each other to have their debts and income treated separately. Signing a pre- or postnuptial agreement like this can make sense for a couple before one spouse goes into business. But if you’re already in business, signing an agreement now won’t protect your spouse from liability for business debts that you already owe, only from liability for future business debts.

Keep in mind that this agreement will be between you and your spouse. It likely won’t affect whether a creditor can pursue you for debt, only your ability to pursue your spouse’s personal assets for payment. Check with your family law lawyer or bankruptcy lawyer for clarification.

You can also sign an agreement with a particular store, lender, or supplier, stating that the creditor will look solely to your separate property for repayment of any debt, essentially removing your spouse’s liability for any obligation or debt from the contract—if you can get the other party to agree.

How Does Bankruptcy Work in Marriage?

If only one spouse files for Chapter 7 bankruptcy in a community property state, creditors can collect community debts against the nonfiling spouse. However, the creditor can’t forcibly take community assets to pay community debt discharged in the filing spouse’s bankruptcy. The creditor can only collect against the nonfiling spouse’s separate property.

This protection is known as a “limited community property discharge.” (11 USC § 524(a)(3).) Also, if you’re considering divorce, talk with your lawyer about the effect the divorce will have on your limited community discharge. You could likely lose its protection. Learn more about filing for bankruptcy without your spouse.

Source

https://www.nolo.com/legal-encyclopedia/debt-marriage-owe-spouse-debts-29572.html

Written by Canterbury Law Group

Managing Marital Property: Do’s and Don’ts

Property division can become challenging for divorcing couples. However, this need not be a challenge.  And If you and the soon-to-be-ex cannot come to good terms on your own, a court will have to do it for you. Under Arizona’s community property law, debts and assets accumulated during a marriage belong to both parties 50/50 in the absence of a prenuptial or postnuptial agreement that says otherwise.  Arizonian family courts emphasize fairness when dividing up a property. Unlike in some states, the property may not be divided equally 50/50, but equitably in the eyes of the judge assigned to your case.  This can sometimes mean 55/45 or 60/40 or 40/60—every case is unique.

No matter what the facts, you will have to hire a talented divorce attorney in Scottsdale, Phoenix or your local area in the state. Absent years of litigation experience, you likely won’t be able to capably represent your interests in court without a deep knowledge of divorce and property laws in the state. If you are undergoing a process of dividing property in a divorce, here are some important items you should be aware of:

Determine if the Property Belongs to the Community or the Separate Category

There is a very clear distinction between community and separate property under Arizona law. Separate property is assets a spouse owned before marriage, inherited solely during the marriage, was gifted solely during the marriage, or purchased alone during the marriage with sole and separate finances. A prenuptial or postnuptial contract may also designate that certain items are to be treated as separate property.  Absent these facts, the law presumes all property and all debt, acquired or originated during the marriage, is community property.

Courts in Arizona only have jurisdiction over community property, not either spouse’s sole and separate property. Each party will have to provide evidence for separate property claims in the form of financial documents. It is possible that property that was originally separate later becomes community property during the marriage. For example, a house purchased by one spouse before marriage may become community property following the marriage if both spouses names are later placed on the recorded deed.

The reason that each is different is that the distinction between community and separate property during the marriage can be blurry. Some spouses may have unknowingly turned separate assets into community property by the “commingling” process, where two assets are combined. A bank account owned by one spouse before marriage becomes marital property if the other spouse makes deposits to it later with community income. Sometimes assets are partially community and partially separate, such as houses and retirement accounts. A business that one spouse operated but later received contributions from the other spouse after marriage can fall into this category.   A seasoned lawyer can walk you through these issues, and advance them in a court of law.

Set Values for Property

Regardless of whether community or separate property, all assets and debts must be assigned a monetary value before equitable division. The two spouses can do this themselves, or a court can do it in case the parties cannot agree on values. Typically appraisals are used to set values of real assets, like houses, antiques, or vehicles. The toughest asset to value can sometimes be retirement accounts.  You may have to hire a financial professional like an actuary to ascertain the value of a retirement account and the growth in value of such retirement assets since the original marriage date.

The Process of Dividing Property

You can see the first section above that determining whether a property is community or separate can be complicated. Ideally, both parties come to an agreement out of court. But this rarely happens when multiple assets are in question and the stakes involve hundreds of thousands of dollars or more.

Courts may divide up property in multiple ways. In the case of property that is partially separate, the court may offer a spouse the option of buying out the remaining portion from the other. In some cases, it may be recommended to mutually sell the assets and divide the proceeds. Some property, like family homes, can be co-owned even following a divorce if children are living there or visiting each year.

Arizona courts typically divide property approximately equally among the divorcing partners. There are only a handful of exceptions to the rule. For example, if one spouse is known to have squandered money through irresponsible activities like gambling or drug use, the court may rule in favor of the other. In the case of property under massive debt, the court may rule against the spouse responsible for the debt.  At the end of the day, you will need the guidance and stewardship of experienced legal counsel to navigate these issues for you.

The following information will assist you in comprehending who owns what in terms of marital property.

Common Law Property and Marital Property States

The majority of states adhere to common law property. Consequently, what does it mean to reside in a common law property state, and who owns what following a divorce? The term “common law” is simply a term used to determine marital property ownership (property acquired during marriage). Under the common law system, property acquired by one member of a married couple is solely owned by that individual.

Obviously, if the title or deed to a piece of property is placed in the names of both spouses, then the property belongs to both partners. If the names of both spouses appear on the title, each spouse owns a one-half interest.

Distribution of property upon death or divorce: When one spouse dies, their separate property is distributed according to their will or through probate (in the absence of a will). The distribution of marital property depends on how ownership is shared between the spouses. If they hold property in “joint tenancy with the right of survivorship” or “tenancy by the entirety,” the surviving spouse inherits the property. This right is independent of the provisions of the spouse’s will.

However, if the property was owned as “tenancy in common,” then the deceased spouse’s will may direct the property to someone other than the surviving spouse. Some property does not have a title or deed. In this instance, the owner is typically the person who paid for or received the property as a gift.

In the event of a divorce or legal separation, the court will decide how the couple’s property will be divided. Obviously, the couple can enter into a premarital agreement detailing the division of marital assets upon divorce.

States with Marital and Community Property

Louisiana, Arizona, California, Texas, Washington, Idaho, Nevada, New Mexico, and Wisconsin are the states with community property. In states with community property, all assets acquired during the marriage are regarded as “community property.”

In states with community property, both spouses own the marital property equally (50/50). This marital property consists of earnings, all property acquired with those earnings, and all marital debts. Community property commences at the time of marriage and terminates when a couple physically separates with the intent to no longer be married. Therefore, any earnings or debts accruing after this date will be considered separate property.

Any assets acquired prior to the marriage are regarded as separate property and belong solely to their original owner. A spouse may transfer the title of any separate property to the other spouse (gift) or to the community property (community property) (making a spouse an account holder on bank account). Couples can also commingle their separate property with their community property, for instance by adding funds from before the marriage to the funds that constitute the community property.

Spouses may not transfer, modify, or eliminate a whole piece of community property without the consent of the other spouse, but they may manage their own portion. However, the entire piece includes the interest of the other spouse. In other words, that spouse’s share of the property cannot be alienated.

Separate property consists of

  • prior to the marriage, only one spouse owned the marital home.
  • Gifts made to only one spouse prior to or during the marriage
  • inherited property by only one spouse
  • Community property consists of
  • Earnings of either spouse during the marriage
  • Items purchased with money earned by either spouse during the marriage
  • Unidentifiable separate property that has become entangled with common property.

Distribution of property upon death or divorce:

When one spouse dies, his or her half of the community property is transferred to the surviving spouse. Their separate property may be bequeathed to whomever they choose in accordance with their will or through probate in the absence of a will. Numerous states with community property provide an interest known as “community property with the right of survivorship.”

Under this doctrine, if a couple holds title or deed to a piece of property, typically a home, then upon the death of one spouse, the title automatically transfers to the surviving spouse without the need for court proceedings.

In the event of a divorce or legal separation, all community property is divided equally (50/50). The separate property of each spouse is distributed to the spouse who owns it, rather than being divided equally.

Sometimes, economic circumstances necessitate awarding certain assets entirely to one spouse, but each spouse still receives 50 percent of the total economic value of all community property. This is most prevalent in married households. Due to the impracticality of dividing a home in half, courts frequently award one spouse the home and the other spouse other assets with a value equal to half the value of the home.

Before the marriage, the couple may enter into an agreement outlining the division of marital property upon divorce.

Exceptions to the rule of equal division:

  • Prior to or during a pending divorce, one spouse misappropriates the community property.
  • One partner carries educational debts. This is the same as debt incurred separately. The spouse retains their GSL loans upon divorce.
  • One spouse incurred tort liability NOT as a result of activity performed for the benefit of the community of marriage.
  • Personal injury awards are considered community property during the marriage, but are awarded to the injured spouse upon divorce.
  • “Negative community” refers to a situation in which the community’s liabilities and debts exceed the assets available to cover them. Here, the relative ability of the spouses to pay the debt is taken into account. The objective here is to safeguard creditors.

Managing Marital Property: What You Should Do

Do consider entering into a prenuptial or premarital agreement prior to marriage. Such agreements make clear what will happen to your property upon your death or divorce. With one, you can prevent undesirable arrangements in how your property is divided in a divorce.

Do maintain accurate and complete books and records to establish the separate nature of property you wish to keep independent from the marital estate. Property you may want to keep separate can include things you had before marriage. It can also include gifts or inheritance you receive during the marriage.

Do continue to keep all separate property separate throughout the marriage, if you’re concerned about keeping it in your family upon your death or divorce. You should also do this with other things that you would also like to keep as a personal asset. Generally, this means you shouldn’t “commingle” property you owned prior to marriage with property you and your spouse acquired during the marriage. In cases of “commingling,” it may become difficult or even impossible to legally determine if it’s separate or marital property.

Do be aware that the increase in value of nonmarital property may be considered marital, so that each spouse is entitled to a share of the increased value of a possession upon divorce or the owner’s death. This is especially true if the increase in value is considered “active” rather than “passive.” (Such increases in value are officially referred to as “appreciation.”) Passive appreciation is, for example, the increase in value of a bank account as a result of interest earned. Passive appreciation also occurs with an increase in property value that results from standard inflation. Active appreciation, on the other hand, occurs as a result of some form of effort, such as repainting rental property, home improvement projects, or actively managing a stock portfolio.

Do use only your non-marital property to purchase other property that you want to be considered separate property. In other words, a boat that you pay for with money you had before marriage and kept in a separate account during marriage may be considered separate or non-marital property. But if your spouse pays for part of it, or even helps maintain it, the boat could lose the status of non-marital property.

Do keep proceeds acquired from any personal injury case during marriage separate, if you want to prevent them from becoming you and your spouse’s marital property. The money you get from a personal injury lawsuit is yours alone, except for any portion that reimburses you for your lost income or compensates your spouse for the loss of your services or companionship.

Managing Marital Property: What You Should Not Do

Don’t use separate funds to pay off a marital debt, or those funds could lose their non-marital character.

Don’t make deposits of income earned during the marriage into non-marital accounts. Income earned during marriage is usually considered marital property. Depositing that income into non-marital accounts can result in “commingling.” When that happens, the non-marital account is no longer considered separate property.

Don’t open a joint bank account with non-marital funds, even if you intend to keep track of which portion is separate. It’s much more prudent to maintain separate accounts if you wish to keep non-marital assets separate.

Don’t assume that just because you owned property prior to marriage, no portion of it will be deemed marital property. For example, if the home you owned before marriage increases in value during the marriage because of you and your spouse’s efforts to maintain and improve it, your spouse may be entitled to a portion of that increase in value.

Don’t assume that a business you owned prior to marriage remains entirely a non-marital asset after marriage. If your business or professional practice increases in value throughout the marriage due in part to your spouse’s contributions, your spouse may be entitled to a share of the increase in value upon divorce or your death. Such contributions can be obvious, such as in bookkeeping or entertaining clients. But they can also be more subtle, such as in taking care of the home and children so that you can focus on running the business.

What is Whose? Obtain Assistance with Your Marital Property Issues

Dividing marital property upon divorce or the demise of a spouse is never an easy subject to broach. Despite the fact that the specifics of property division depend on the state in which you reside, it can be quite confusing. However, you are not required to figure out the law on your own. Consider contacting an experienced divorce attorney in your area to discuss your options.

Written by Canterbury Law Group

What Is Equitable Distribution And Separate Property In Divorce

Family courts divide property in one of two ways: equitable distribution or community property. Most states divide marital property according to what’s fair, or equitable, for both parties during a divorce. This isn’t the same as equal distribution, however, as the goal of equitable distribution is to consider the needs of each party and the facts of the case.

The equitable distribution of marital assets is determined on a case-by-case basis. It is subject to negotiation between the two parties and the discretion of the judge. If you’re getting divorced in a common law property state (where equitable distribution is recognized), you’ll want to understand how property division will be determined.

This article addresses the two ways in which assets are divided between a couple during their divorce.

Community Property vs. Equitable Distribution: The Basics

In the nine community property states, which include California and Texas, marital property (generally, all property acquired between the date of the marriage and the date of separation) is generally divided fairly equally. This is done regardless of who contributed more to the marriage (whether in regard to money, housekeeping, etc.), who has more separate property, or whether one of the spouses is largely to blame for the divorce.

 

Generally, anything purchased with money earned by either spouse during the marriage is considered community property. Community property is subject to a roughly 50/50 split in a divorce. However, separate property may be established through a written contract. Examples of such contracts are prenuptial agreements or postnuptial agreements, sometimes called antenuptial agreements.

In equitable division property states, courts take a much more delicate approach to property division. Instead of automatically dividing marital property down the middle, these states take a step back and consider what would be the fairest to both parties. This includes consideration of separate property as well as marital property, and the needs and means of each spouse.

For example, consider if one spouse gave up their career in order to stay home and raise children. They now have a difficult time earning a living after the divorce. In this instance, the court may award that party a larger cut of the marital property. Conversely, if one spouse was abusive or otherwise at fault for the failure of the marriage (even in a “no-fault” divorce), the court may award them a smaller percentage of the marital property.

Determining What’s Equitable: Factors Considered

Like community property states, in equitable distribution states, the divorcing couple has an opportunity to reach an agreement on their own (subject to court approval) before the courts intervene. This may take place in a collaborative environment or through the parties’ attorneys. If the parties are unable to reach an agreement about the division of marital property, the courts will use their discretion (within the parameters of state marital property law) in order to reach a resolution.

When courts are tasked with determining the division of assets, they’ll generally consider the following factors under equitable distribution laws:

  • Duration of the marriage;
  • Which spouse has primary custody of minor children;
  • The financial needs and liabilities of each spouse, present and future (for instance, one party may need to invest in a college degree in order to earn a decent wage);
  • The financial well-being and earning power of each spouse, present and future;
  • Amount contributed by each spouse to the combined marital property;
  • Pensions earned by either spouse;
  • Non-monetary contributions to the family (such as child-rearing, unpaid work on the home, etc.);
  • Marital debt accumulated during the duration of the marriage (such as credit card debt);
  • Age, health, and special needs of each spouse;
  • Child support (and/or spousal support) obligations of either spouse for previous relationships;
  • Total fair market value of separate property (again, this isn’t subject to division, but does factor into the overall determination); and
  • Marital misconduct by each spouse (such as gambling debts, extramarital affairs, or instances of domestic violence).

Note that premarital property is not included in equitable distribution. This is because personal property acquired before the marriage is not considered part of the marital estate. Only assets acquired during the marriage are considered part of the marital estate and are subject to equitable distribution.

Individuals often decide to get married after falling in love and realizing they have similar values and life goals. But, romantic ideals aside, marriage is at its core a merger of two entities into a single unit, with shared assets and liabilities. And just as a business merger results in the commingling of assets, so too does marriage (to a degree).

But the question of who owns what typically is addressed only when a married couple decides to call it quits and go their separate ways. Marital property is that which is subject to division upon divorce, but what is separate property in a divorce?

Marital Property vs. Separate Property: The Basics

In order to define separate property in the context of a marriage, we also need to cover the meaning of marital property. Most assets (and debts) acquired during the marriage are considered marital property and thus subject to division in divorce. The way in which marital property is divided depends upon the laws of your state, with a handful of states using the “community property” approach (generally, a 50/50 split).

 

All other property is considered separate property, which means it belongs to just one of the parties in a marriage. When a couple gets divorced, separate property is not subject to division.

 

Assets Considered Separate Property

Unlike marital property, separate property (sometimes called “individual property”) belongs to just one individual before, during, and after the marriage. This mainly consists of that which was acquired before the couple gets married, with a few notable exceptions. Debt also follows these rules; someone who enters a marriage with a heavy debt load typically will be responsible for that debt after the marriage ends.

State laws determine what’s considered separate property, but they’re fairly consistent with one another. Generally, the following is considered separate property:

  • Property owned by one spouse prior to the marriage;
  • Gifts or inheritances received by one spouse prior to or during the marriage;
  • Property acquired by one spouse (in that individual’s name only) during the marriage and not used by the other spouse or for the benefit of the marriage (unless it’s a community property state);
  • Property/debts designated as separate in a legally enforceable contract, such as a prenuptial agreement;
  • Personal injury awards, minus any compensation for lost wages (unless it’s a community property state); and
  • Any property obtained by one party using their separate property assets (such as inheritance funds) with the clear intention of maintaining the acquired property as separate.

Separate property that’s been so commingled with marital property that it’s virtually impossible to identify will be considered marital property (and subject to division) in a divorce. For instance, if marital property (shared income) is used to pay off a car originally purchased by one spouse before the marriage, the car (or a portion of its value) will be considered marital property.

Separate Property: Community Property vs. Common Law States

It’s important to understand how community property states and common law property states differ in how separate property is distinguished. Common law property states, for the most part, automatically define that which is registered in one spouse’s name only as separate property. This isn’t the case in community property states (such as California), where an express, written agreement is required for such a determination.

Additionally, common law property states will take into consideration each spouse’s separate property when determining how to equitably distribute marital property during a divorce. Since community property states split marital property in half, they don’t consider each party’s separate property.

Written by Canterbury Law Group

What Is Equitable Distribution?

Family courts divide property in one of two ways: equitable distribution or community property. Most states divide marital property according to what’s fair, or equitable, for both parties during a divorce. This isn’t the same as equal distribution, however, as the goal of equitable distribution is to consider the needs of each party and the facts of the case.

 

The equitable distribution of marital assets is determined on a case-by-case basis. It is subject to negotiation between the two parties and the discretion of the judge. If you’re getting divorced in a common law property state (where equitable distribution is recognized), you’ll want to understand how property division will be determined.

 

This article addresses the two ways in which assets are divided between a couple during their divorce.

 

Community Property vs. Equitable Distribution: The Basics

In the nine community property states, which include California and Texas, marital property (generally, all property acquired between the date of the marriage and the date of separation) is generally divided fairly equally. This is done regardless of who contributed more to the marriage (whether in regard to money, housekeeping, etc.), who has more separate property, or whether one of the spouses is largely to blame for the divorce.

 

Generally, anything purchased with money earned by either spouse during the marriage is considered community property. Community property is subject to a roughly 50/50 split in a divorce. However, separate property may be established through a written contract. Examples of such contracts are prenuptial agreements or postnuptial agreements, sometimes called antenuptial agreements.

 

In equitable division property states, courts take a much more delicate approach to property division. Instead of automatically dividing marital property down the middle, these states take a step back and consider what would be the fairest to both parties. This includes consideration of separate property as well as marital property, and the needs and means of each spouse.

 

For example, consider if one spouse gave up their career in order to stay home and raise children. They now have a difficult time earning a living after the divorce. In this instance, the court may award that party a larger cut of the marital property. Conversely, if one spouse was abusive or otherwise at fault for the failure of the marriage (even in a “no-fault” divorce), the court may award them a smaller percentage of the marital property.

 

Determining What’s Equitable: Factors Considered

Like community property states, in equitable distribution states, the divorcing couple has an opportunity to reach an agreement on their own (subject to court approval) before the courts intervene. This may take place in a collaborative environment or through the parties’ attorneys. If the parties are unable to reach an agreement about the division of marital property, the courts will use their discretion (within the parameters of state marital property law) in order to reach a resolution.

When courts are tasked with determining the division of assets, they’ll generally consider the following factors under equitable distribution laws:

 

  • Duration of the marriage;
  • Which spouse has primary custody of minor children;
  • The financial needs and liabilities of each spouse, present and future (for instance, one party may need to invest in a college degree in order to earn a decent wage);
  • The financial well-being and earning power of each spouse, present and future;
  • Amount contributed by each spouse to the combined marital property;
  • Pensions earned by either spouse;
  • Non-monetary contributions to the family (such as child-rearing, unpaid work on the home, etc.);
  • Marital debt accumulated during the duration of the marriage (such as credit card debt);
  • Age, health, and special needs of each spouse;
  • Child support (and/or spousal support) obligations of either spouse for previous relationships;
  • Total fair market value of separate property (again, this isn’t subject to division, but does factor into the overall determination); and
  • Marital misconduct by each spouse (such as gambling debts, extramarital affairs, or instances of domestic violence).

Note that premarital property is not included in equitable distribution. This is because personal property acquired before the marriage is not considered part of the marital estate. Only assets acquired during the marriage are considered part of the marital estate and are subject to equitable distribution.

Written by Canterbury Law Group

How to Divorce Without Going to Court

How to Divorce Without Going to Court

Learn about the techniques that can assist you avoid having to appear in court throughout your divorce.

Divorce Alternatives to the Traditional Process

Let’s start with a disclaimer: while some states enable you to acquire a divorce ruling without ever entering a courtroom, others require you to appear in front of a judge. However, if you can settle your disputes ahead of time, your court appearance will only take a few minutes, rather than the hours or even days that a contested divorce trial will take. You and your spouse can try to resolve your differences on your own, or you can use one of the Alternative Dispute Resolution techniques (ADR).

Solving Problems by Yourself

If you and your husband are on friendly terms, you might list your marital concerns and try to come to an agreement on each one. It’s a good idea to do some preliminary research on the topics you’ll be discussing so you don’t forget anything. Divorce concerns typically include any or all of the following:

  • partition of assets and debts
  • spousal support or alimony
  • child custody, as well as
  • support for children

You should have a divorce lawyer formalize your settlement by producing a Property Settlement Agreement once you’ve reached an agreement on all of your divorce-related concerns (also known as a Marital Settlement Agreement). In addition to the terms you’ve agreed to, this will usually include significant legal clauses. Keep in mind, however, that you and your spouse cannot employ the same lawyer; you should both have your own counsel evaluate the contract on your behalf.

Choosing a Mediator for Your Divorce

Mediation is a prominent ADR technique. Mediators are qualified professionals who assist spouses in resolving their conflicts (usually lawyers or child custody experts). The couple will prepare material and documents (such as tax records) ahead of time and meet with the mediator as many times as required to reach an agreement. The idea is to limit the parameters of the settlement to a written agreement.

Mediation is usually less stressful than going through a contested divorce. Sessions are usually held in the mediator’s office and are relatively informal. Although the couple can have attorneys present, it is not needed, which adds to the mediation’s cost-effectiveness. (Having attorneys there can actually be unhelpful at times, especially if the attorney is confrontational.) You will have to pay the mediator, although this is normally split between the parties.

Divorce Through Collaboration

Another type of ADR is collaborative divorce. The purpose is similar to mediation in that it is to establish an agreement, but it is structured differently.

A mediator or other third party is not involved in a collaborative divorce. Rather, each couple has an attorney and participates in “four-way” meetings in order to establish an agreement. Collaborative law attorneys often have specialized training in this area. In order to keep them focused on the settlement, most—if not all—states prohibit them from representing the spouses in future court cases if the negotiations fail.

Collaborative law is based on the concept of working as a “team.” To establish an agreement, all players are required to work together. Any professionals involved in the process (such as accountants, property appraisers, and child psychologists if there is a custody dispute) must be impartial and accepted by both parties.

If you’d rather have an attorney represent you throughout the settlement process, you’re more likely to choose collaborative divorce over mediation. But keep in mind that if you can’t come to an agreement, you’ll have to start the entire divorce procedure over with new lawyers. This could result in a huge increase in costs, as these new lawyers will have to learn the case from the ground up.

Arbitration in Divorce

Divorce arbitration is another weapon in the ADR toolbox, and it’s frequently used by couples who don’t think they’ll be able to settle their disagreement but want someone to make a decision outside of the traditional court system. Unlike mediation and collaborative divorce, arbitration’s purpose is for the arbitrator to decide the case and give a ruling, similar to what a court would do after a trial. (Divorce arbitration may not be available in all states; consult a local attorney to see if it is used in your area.)

The advantages of arbitration versus a court trial are numerous. The arbiter is chosen by you and your spouse. You cannot choose your judge in court. You can also choose to relax the standard rules of proof. For example, rather of having a witness attend in person, you can agree to accept the presentation of a witness’s sworn written statement. You’ll also collaborate to define the dates, times, and length of your arbitration sessions. That’s a luxury you won’t find in court, where disputed divorces can drag on for over a year and you can waste hours each time you go waiting for a judge to show up.

The most significant disadvantage of arbitration is that the judgement is final and binding. You usually can’t appeal unless the arbitrator is acting improperly. With a court trial, it’s nearly a given that you’ll be able to appeal. You’ll also have to pay the arbiter in addition to your lawyers. This can be costly, especially in complex circumstances.

Is it necessary for you to appear in court?

You must submit a divorce petition or complaint with the court to formally end the marriage, even if your case has been settled. The divorce is usually based on no-fault grounds (reasons), such as “irreconcilable disagreements,” by whichever partner files the case. You must submit the relevant papers and forms in states that do not require a court presence. These are frequently seen on the court’s website. A judge will approve the settlement and issue a final divorce judgment if everything is in order.

If your state needs a court appearance, you’ll notify the court clerk that your divorce case has been resolved once you’ve completed the initial divorce filing process. The case will be marked “uncontested,” and you will be given an expedited court date. In most cases, you’ll appear in front of a judge for around fifteen minutes, verifying the grounds for the divorce and answering basic questions about the settlement agreement. Again, the court’s website is likely to provide useful procedural information.

Regardless of which path you choose for your divorce, you should seek the advice of an expert family law attorney who can assist you throughout the process.

Need a Divorce Lawyer in Scottsdale or Phoenix?

As proven legal counsel in family court, we have a network of Arizona attorneys, expert witnesses, mediators, tax specialists, estate planners, financial planners, child specialists, real property appraisers, adult and child therapists and parenting coordinators who are here for you if you ever need them. Our lawyersdivorce mediators and collaborative divorce attorneys in Scottsdale are here to make your divorce less stressful and keep you in control and the costs contained. Call today for an initial consultation at 480-744-7711 or [email protected]. Our family lawyers can also help with divorce litigation, child custodylegal guardianshippaternityprenuptial agreements, and more.

*This information is not intended to be legal advice. Please contact Canterbury Law Group today to learn more about your personal legal needs.

How To Divorce Your Wife And Keep Everything
Written by Canterbury Law Group

Top 10 Questions to Ask a Divorce Lawyer

Top 10 Questions to Ask aDivorce Lawyer

If you’re going through a divorce and need an attorney, keep in mind that you don’t have to select the first one you come across. One of the most essential divorce-related decisions you’ll make is selecting the best lawyer to represent you.

Even if a friend or another lawyer has recommended a family law attorney, you should still do your research; examine the attorney’s credentials and make sure he or she has the expertise to handle your case.

There are many lawyers, and many of them advertise themselves as “family law” or “divorce” attorneys. Family law, on the other hand, is a specialization involving complicated legal principles that take time and experience to grasp. There are even more subspecialties within the field of family law, like child custody law, international custody law, guardianship, and a branch of the law regarding Qualified Domestic Relations Orders (QDROs), which are special orders that must be used to distribute certain types of retirement benefits.

Divorce also has a number of financial implications, including:

  • standards for financial disclosure between spouses
  • Before and during the divorce, restraining orders ban spouses from changing beneficiary designations or transferring assets.
  • alimony is a phrase that refers to a (how to calculate income available for alimony and the special factors courts consider when determining setting payments)
  • support for children (how to calculate child support in your state)
  • Property and assets, such as real estate, collectibles, venture capital interests, stock option portfolios, goodwill, or other company interests, are divided, and
  • the distribution of pension benefits

There is a large body of law that applies to these concerns (which varies from state to state). The government and/or the courts constantly alter or overturn these laws, so you’ll need to choose an attorney who is knowledgeable with the latest regulations and cases that pertain to your divorce.

You might feel comfortable selecting a less experienced family law attorney if you have a basic case with few financial difficulties and no children. If you’re going through a disputed divorce with significant assets, extensive financial concerns, or a complex custody fight, you should choose a family law attorney that specializes in family law and has experience with the issues you’re dealing with. See our article, Hiring a Divorce Lawyer, for advice on how to hire a divorce lawyer to handle part or all of your divorce case.

Ten Things to Ask a Divorce Lawyer

We’ve put up a list of questions you might want to ask a family law attorney during your initial consultation. These may assist you in determining whether or not this lawyer is appropriate for your case.

1. Do you specialize in divorces or do you handle them as part of your general practice? How long have you been working in the field of family law? How many cases have you handled involving family law? Is it true that you’re a “qualified family law specialist”?

2. What is your plan for dealing with my case? How long will it take for my case to be resolved?

3. How long does it take you to respond calls? In the event of an emergency, how can I contact you? What do you consider an emergency situation?

4. Will you be working on my case with anyone else in your office? What kind of background do they have? Is it possible for me to meet them?

5. What method will you use to bill me? How much do you charge per hour? Do you bill for the time I spend interacting with other lawyers, paralegals, and/or secretaries? If so, what is the rate of increase? What is the amount of your retainer up front?

6. What other costs (besides your own) do you plan to incur (for example, for private investigators, forensic accountants, physicians, and/or psychiatrists), and how will you bill me for them?

7. What do you think the total cost of this divorce will be? (Don’t be surprised if most divorce attorneys refuse to answer this question because the cost of the divorce is heavily influenced by the level of contention in your case.) The way attorneys respond to this question, on the other hand, may assist you assess them. An honest attorney will frequently respond that estimating fees in advance is tough. If an attorney offers you a very low fee, it’s possible that they’re just attempting to gain your business).

8. Do you allow me to bargain with my spouse directly? How can I keep my divorce costs down? Is there anything I can do on my own to reduce the amount you’ll charge me?

9. How do you think a judge would rule in my case, based on what you know about it?

10. What can you do to assist me in better understanding the tax implications of the decisions I’ll need to make?

Need a Divorce Lawyer in Scottsdale or Phoenix?

As proven legal counsel in family court, we have a network of Arizona attorneys, expert witnesses, mediators, tax specialists, estate planners, financial planners, child specialists, real property appraisers, adult and child therapists and parenting coordinators who are here for you if you ever need them. Our lawyersdivorce mediators and collaborative divorce attorneys in Scottsdale are here to make your divorce less stressful and keep you in control and the costs contained. Call today for an initial consultation at 480-744-7711 or [email protected]. Our family lawyers can also help with divorce litigation, child custodylegal guardianshippaternityprenuptial agreements, and more.

*This information is not intended to be legal advice. Please contact Canterbury Law Group today to learn more about your personal legal needs.

Written by Canterbury Law Group

Sneaky Divorce Tactics

Sneaky Divorce Tactics

At the time, dirty ways to get back at your soon-to-be-ex may seem like a smart idea. Retaliating for your ex’s wrongdoings may provide you with a sense of satisfaction in knowing that you are exacting justice or giving your ex what he or she deserves.

However, the truth is that these dirty divorce techniques rarely benefit the perpetrator and nearly usually result in hostility. Dirty divorce methods can inspire the other side in the same way that the bombing of Pearl Harbor roused a sleeping giant. During your divorce processes, fight the impulse to be vindictive, because you may discover that the joke is on you. Here are some instances of things you should not do:

1. Don’t give him anything.

A female client is considering leaving her husband’s home. It appears that if she tells her husband that she wants to leave, he will stop her. It has to be done behind his back. She is furious with him and wants to get even with him, so when she leaves, she takes everything in the house with her. He has nothing to sit on and nothing to cook with when he goes home. She believes she’s shown him something, but all she’s done is provoke him and throw down the gauntlet for all-out war.

2. Cancel all of your credit cards.

I represented a mother of three whose husband, a doctor, was having an affair with a nurse. Both had engaged lawyers, but my client preferred to wait before suing her husband for infidelity in the hopes of reaching an amicable resolution.

My client had just returned from a lengthy journey with one of her kids and was about to pay for gas when her card was rejected. Her spouse, who earns around $1 million a year, chose to terminate all of her credit cards without warning. To say the least, the good doctor procured an adultery complaint and a temporary hearing in which the judge was apprised of his actions.

3. Obtain his dismissal.

Offended spouses’ eagerness to get their ex fired or in trouble with the IRS or, in one case, the Securities and Exchange Commission never ceases to astonish me. What could they be thinking while they’re simultaneously attempting to get enough money from their spouse to make ends meet? What a case of shooting oneself in the foot!

4. Turning Off the Power.

This is undoubtedly one of the nastier divorce ruses. Many people have called me to say that their phone, power, or cable has been switched off at their home without warning. Such an approach simply leads to a downward spiral of attacks and counterattacks.

5. Inform the Paramour’s Partner.

When an affair is discovered, a common reaction is to phone the paramour’s spouse and tell them everything. As a result, that spouse may launch an alienation of affection lawsuit, putting the marital assets at danger. Clearly, this is an extremely self-destructive decision. (There are situations when sharing this information is beneficial, but this should be done by the lawyer, not the client.)

6. Take the kids out of state.

At the time, such a move seemed like a great way to get even with your spouse. However, some cases show that it can be a good method to get a judge to grant custody to your husband in exchange for your bad behavior. It is considered kidnapping in several places.

7. De-clutter your bank accounts.

While this may bring some temporary relief and security, it may also result in an emergency hearing and the costs associated with it. It may also imbue the perpetrator with an unjust taint that they may never be able to escape. (There are situations when this may be essential, but only with counsel’s guidance and for very good reason.)

8. File a Child Abuse Complaint.

I believe that few people consciously make false complaints of abuse, but it is all too common for people in the throes of divorce to stretch regular events to their advantage. This is something that judges are well aware of. Allow no one to speak to your child if there is a risk of abuse, and bring them to a professional who is trained in interviewing children for abuse. Abuse allegations can be made in both directions, so tread carefully before throwing stones. Allow the experts to handle it.

9. Make your spouse feel humiliated.

Many people wish to teach their spouse a lesson by having summons or subpoenas served on them at work or in other humiliating locations. I’m aware of one situation in which a woman requested that the process server serve her husband immediately before he boarded a plane for an overseas hunting trip. Such gestures may provide gratification, but they can also lead to revenge and escalation of the conflict. Remember that they will one day have the power to embarrass you in the same way they embarrassed you.

10. Just because you can, pull the trigger.

Many times over the course of a divorce, there is an opportunity to file anything, take legal action, or seek a sanction, but the better option is to postpone or avoid taking action. Your husband, for example, is an adulterer. You have concrete evidence. You may believe that because the opportunity presents itself, you must file a lawsuit for adultery. However, history has shown that assessing the circumstance and determining when or if such action is most useful is frequently the best course of action. The mere fear of litigation, for example, may be more persuasive in negotiations than the actual filing of litigation.

All of the preceding rules come with the proviso that no rule should be obeyed if doing so would be risky. You have to do some things from time to time. The key is to seek the advice of skilled counsel and to ensure that your relationship with your counsel is not hostile for the purpose of being contentious.

Rather of focusing your efforts on hurting your ex, be sure that every move you make is actually geared to assist you move closer to a positive solution, not just to grasp a purely temporary advantage or to gratify an unproductive emotion. Let’s keep it that way!

Need a Divorce Lawyer in Scottsdale or Phoenix?

As proven legal counsel in family court, we have a network of Arizona attorneys, expert witnesses, mediators, tax specialists, estate planners, financial planners, child specialists, real property appraisers, adult and child therapists and parenting coordinators who are here for you if you ever need them. Our lawyersdivorce mediators and collaborative divorce attorneys in Scottsdale are here to make your divorce less stressful and keep you in control and the costs contained. Call today for an initial consultation at 480-744-7711 or [email protected]. Our family lawyers can also help with divorce litigation, child custodylegal guardianshippaternityprenuptial agreements, and more.

*This information is not intended to be legal advice. Please contact Canterbury Law Group today to learn more about your personal legal needs.

How To Divorce Your Wife And Keep Everything
Written by Canterbury Law Group

How To Divorce Your Wife

How To Divorce Your Wife And Keep Everything

Divorce is a major life-changing event and can be devastating and traumatic for a family. If there are children involved, the divorce can have profound impacts on them, which they will carry with them their entire lives. However, if a divorcing spouse has a basic understanding of what the divorce process in Arizona will entail, he/she will likely feel a sense of comfort and be able to pass that on to the children.

  • A divorce action is commenced in Arizona upon the filing of a Petition for Dissolution. The Petition will include the filing spouse’s general positions relative to custody, division of assets and debts, financial support and attorney fees. The Petition for Dissolution must then be served upon the other spouse, who will have 20 days to file a Response.Once the initial pleadings have been filed, the next phase of a divorce begins. During the discovery phase, both spouses are required to disclose certain documentation that can be reviewed by the attorneys in order to make an assessment of what assets and debts exist and their respective values. In addition, formal discovery requests may be issued in this phase. Again, responses to discovery requests are primarily utilized by the attorneys to make an assessment of what and how assets and debts should be divided between the spouses. The discovery phase may also include depositions and requests for documentation issued directly to third parties.How long does a divorce take?In Arizona, a divorce can take anywhere from six months to one year to complete. This can be a difficult and unstable time for families because there are not yet orders in place relative to contact with the children, financial support and temporary possession of certain assets, including vehicles and the marital residence. Therefore, a spouse who needs assistance with these issues during the divorce process can file a Motion for Temporary Orders. Once this motion is filed, temporary orders can typically be issued by the court within 60-90 days and will stay in place until final orders are issued by the court or agreed upon between the spouses.

    Once the discovery process has been completed, then the attorneys and spouses can engage in settlement negotiations. There are several methods that can be used to negotiate and, hopefully, resolve a matter without costly, time consuming and emotionally tolling litigation. Depending on the facts and complexity of the matter, settlement negotiations can take place in correspondence between the attorneys, an in-person mediation through the court or during a private mediation. In the event that the spouses are able to negotiate an agreement, then the agreement will be incorporated into a final Decree of Dissolution, Property Settlement and Joint Parenting Plan.

    In cases where the spouses are unable to resolve some or all of the issues, it will be necessary to attend a trial where the judge will hear testimony from witnesses and review evidence. Ultimately, the court will issue the final orders for any matters that the spouses were unable to resolve amongst themselves. Once a trial is completed, the judge has up to 60 days to issue a ruling that sets forth the final orders. In some cases, the judge’s ruling is the final Decree of Dissolution. In other cases, the court directs one of the attorneys to draft a Decree of Dissolution that incorporates the rulings.

    Whether a divorce case settles or proceeds to trial, it is critical to have an experienced attorney on your side who can protect your rights and advise you as to what you may be entitled to under Arizona law.

Need a Divorce Lawyer in Scottsdale or Phoenix?

As proven legal counsel in family court, we have a network of Arizona attorneys, expert witnesses, mediators, tax specialists, estate planners, financial planners, child specialists, real property appraisers, adult and child therapists and parenting coordinators who are here for you if you ever need them. Our lawyersdivorce mediators and collaborative divorce attorneys in Scottsdale are here to make your divorce less stressful and keep you in control and the costs contained. Call today for an initial consultation at 480-744-7711 or [email protected]. Our family lawyers can also help with divorce litigation, child custodylegal guardianshippaternityprenuptial agreements, and more.

*This information is not intended to be legal advice. Please contact Canterbury Law Group today to learn more about your personal legal needs.

Written by Canterbury Law Group

Why Are Divorce Rates So High?

Why Are Divorce Rates So High?

What factors are associated with a higher risk for divorce? Read on to learn more.

  • Young age.  Marriage at a very young age increases the likelihood of divorce, especially in the early years of marriage.
  • Less education.  Research shows that those with at least some college education (vs. high school or not finishing high school) have a lower chance of divorce.   
  • Less income.  Having a modest income can help couples avoid stress that may lead to divorce.   
  • Premarital cohabitation.  Couples who live together before marriage appear to have a higher chance of divorce if they marry, but the risk is mostly true for those who have cohabited with multiple partners.  A common belief is that living together before marriage provides an opportunity to get to know each other better, but research has found those that live together before marriage have already developed some leniency towards divorce.   This leniency towards divorce is what leads the couple to become high risk. However, there are some caveats to these findings.  Research suggests couples who get engaged and then move in together are no longer at a high risk for future divorce.   Their commitment towards marriage reduces the risk of a future divorce.
  • Premarital childbearing and pregnancy.  Childbearing and pregnancy prior to marriage significantly increase the likelihood of future divorce.
  • No religious affiliation.  Researchers have estimated those with a religious affiliation compared to those who belong to no religious group are less likely to divorce.
  • Parents’ divorce.  Unfortunately, experiencing the divorce of your parents doubles your risk for divorce.  And if your spouse also experienced their parents’ divorce than your risk for divorce triples.  This does not mean you are predisposed to having your marriage end in divorce, only that you may need to be more aware of your marriage trends and work harder for a successful marriage.  For more information on what a healthy marriage entails click here.  

Need a Divorce Lawyer in Scottsdale or Phoenix?

As proven legal counsel in family court, we have a network of Arizona attorneys, expert witnesses, mediators, tax specialists, estate planners, financial planners, child specialists, real property appraisers, adult and child therapists and parenting coordinators who are here for you if you ever need them. Our lawyersdivorce mediators and collaborative divorce attorneys in Scottsdale are here to make your divorce less stressful and keep you in control and the costs contained. Call today for an initial consultation at 480-744-7711 or [email protected]. Our family lawyers can also help with divorce litigation, child custodylegal guardianshippaternityprenuptial agreements, and more.

*This information is not intended to be legal advice. Please contact Canterbury Law Group today to learn more about your personal legal needs.

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