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Arizona Family Law Blog

What to do about retirement savings in a divorce

Divorce can present a number of challenges to retirement plans for people in Arizona. If each person has been saving for retirement and has a roughly equal amount of savings, they might each decide to keep their own retirement account. This can be a simple way of dealing with property division.

However, if one person has been doing all or most of the saving, the other spouse may be entitled to part of those savings. If the retirement account is a pension plan or a 401(k), the couple will need a document called a qualified domestic relations order to divide it. In marriages that lasted 10 years or longer, one spouse may also be eligible to draw Social Security benefits on the ex-spouse's work record. This does not affect the benefits the ex-spouse will receive. To get these benefits, it is necessary that they be greater than the benefits that the person would receive on their own work record. The person drawing the benefits also must be at least 62 and must be unmarried.

How student loan debts can be handled in a divorce

It isn't uncommon for married individuals in Arizona and throughout the country to have student loan debt. When that debt is acquired could play a role in how it is managed in a divorce. Generally speaking, debts accumulated before a marriage remain the responsibility of the person who accumulated them. Debts that were accumulated after a marriage begins could be considered marital property. This means that both parties to the relationship could be liable for repaying them.

Arizona is a community property state, which means that both assets and debts are split 50/50 when a couple gets a divorce. In the event that a spouse cosigned for a loan, he or she is responsible for that debt until it is repaid in full. If the spouse who took on the debt doesn't repay it, the lender could come after the cosigner regardless of what a divorce decree says.

How to take care of your mental health in divorce

Divorces can be incredibly contentious affairs. One Arizona couple has found themselves locked in a bitter divorce battle over allegations of poisoning. One spouse wanted to invalidate a will to prevent his wife from getting $900,000, but the judge has agreed to uphold the prenuptial agreement. 

Chances are, your divorce will not be as embattled as this one. However, all separations are tough. You will go through a lot during this time, and you need to be ready for the long haul. That involves taking care of your mental health so you do not let the stress get to you. Here are some steps for caring for yourself during this stressful time. 

Negotiating support in a divorce after job loss

As stressful as a divorce is, it can become even more stressful for a person in Arizona after a job loss. If the person is the higher-earning spouse, there could be concerns about how to pay support.

The person should not take this as an opportunity to pursue a lower-paying job. Courts usually frown on what may appear to be an effort to avoid paying support by remaining underemployed, and judges may still base support amounts on a person's salary history. A court may look more favorably on someone who is laid off compared to someone who is fired, but a layoff from a company owned by family or a friend could look as though the person is trying to avoid support payments. In a case like this, the person may need to document the reason for layoffs. The person might also want to show evidence of searching for another job, including sending out resumes and going to interviews.

Does infidelity affect what happens during the divorce process?

A couple contemplating a divorce has many questions. After building a life together, it can quickly become overwhelming to consider dividing it and starting over as single individuals.

Some issues that come up in a marriage, such as debt or frequent unemployment, may put a strain and push a couple to the limit. However, something such as infidelity can make staying together more difficult. If you caught your spouse cheating, does it matter when it comes time to seek a divorce?

Divorce concerns for small business owners

Arizona business owners may have unique concerns when they begin to suffer marital difficulties. Of course, the financial consequences of a divorce can persist long after the emotional and practical issues have been resolved. For the owners of small, closely held companies, the effects can be felt more severely than usual. In many of these cases, the business itself may be the largest marital asset and a major source of the couple's income. Therefore, they may worry that the future of the business is at stake, especially when the couple cannot continue to work as partners after the divorce.

Business owners can take steps to find a solution that can protect their companies while reflecting a fair settlement in the divorce. As Arizona is a community property state, there is a strong presumption that all of the assets gained during the marriage belong equally to both partners. This is true even if one partner focused much more closely on the business than the other. When a business was launched before a marriage, it may not be considered entirely marital property, but its increase in value will almost always be handled as part of the marital estate.

Common questions about Arizona divorce

While you may want to get a divorce, it does not mean the process is enjoyable or easy to understand. You are likely feeling a lot of confusion, stress and anxiety. As you prepare to end your marriage, you probably have several questions. 

The more you understand about the divorce process in Arizona, the better you will feel about your next step. Here are answers to some common questions about divorce.

Planning for divorce by learning about finances

When women in Arizona decide to divorce, they may need to take special care to protect their finances. While the overall role of women in household finances has changed significantly over the years, many wives still know less than their husbands about the state of household finances, the scope of family assets or the investments that they hold. When 40 to 50% of marriages end in divorce, it is particularly important that women remain aware of their collective finances in order to protect themselves financially in the event of a divorce.

There are some key documents that can help people make decisions about filing for divorce and negotiating a settlement. These include annual tax returns, statements of net worth and lifestyle analyses. Unfortunately, many wives sign off each year on the family tax returns without fully understanding the information contained therein. These documents, including 1099, W-2 and K-1 forms, can provide detailed information about each spouse's income from employment as well as investment income, capital gains and business income. Tax returns can be particularly important when a family business is involved.

How debt can put a marriage in jeopardy

Financial issues are a common cause of divorce. According to one survey, student loan debt can be a major contributing factor. About one-third of student loan debtors who participated in the survey said their divorce was caused by money problems, and more than 10% of those specifically blamed student loan debt. Some people in Arizona may be among those whose student loan debt is in excess of $50,000. The number of people who have passed this threshold is three times higher than it was 10 years ago.

The average student loan debt is also higher than it was a decade earlier. It has gone up more than 60% to $34,000. People with this kind of debt load may struggle to make financial commitments such as buying a home. However, it's important for spouses to be honest with one another about their financial situations before heading into marriage.

How parents can handle the aftermath of a divorce

Parents in Arizona and elsewhere may believe that it is better to stay married for the sake of their children. However, it is usually better to end a toxic relationship than subject a son or daughter to constant conflict. If a divorce does take place, parents should make sure that the children don't blame themselves for it. It is also important that the kids know that they will be loved regardless of how their parents feel about each other.

Furthermore, kids should be allowed to have relationships with both of their parents. Ideally, parents will do whatever they can to provide as much stability as possible as the divorce process takes place. For instance, children should be kept in the same school district or close to friends and extended family members. Children should also be allowed to provide input into any changes that occur in their lives.

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