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Phoenix Arizona Family Law Blog

Protecting retirement benefits during divorce

Divorce brings many changes, particularly to finances. And as many Arizona residents have discovered, one of the financial aspects that can be significantly affected by divorce is retirement. While divorce often means having to restructure retirement plans, the process can be completed while still protecting some of the benefits each person receives.

There are cases where couples can agree to amicable and easy property division regarding retirement. For example, if both spouses had similar amounts in their retirement account, each person can keep their benefits for themselves. However, when spouses have a significant difference in the amounts in their retirement accounts, the spouse with the lower amount might be able to negotiate for some of those benefits. This is done through a qualified domestic relations order or QDRO, which allows a spouse to transfer retirement benefit savings to their ex. The savings that can be transferred, however, are those acquired during the marriage, not before.

Property division in Arizona is relatively cut and dry

When you first got married, you never could have imagined that you and your spouse would be eager to break ties years later. The reality, though, is that it has happened. You are headed for divorce.

One of your biggest concerns as you embark on the divorce process is figuring out how to divide your property with your spouse. Here is a look at what property division involves in the state of Arizona.

Crossing state lines can alter child support calculations

Child support payments in Arizona can be significantly lower than those right across the border in New Mexico, according to one study. Custody X Change, a smartphone app marketed to single and divorced parents to manage child custody and visitation schedules, used hypothetical data for a family in all 50 states to measure the differences in child support payments. Under federal law, each state is free to set its own child support guidelines, and the differences can be striking. In order to obtain clear results, they used the same family structure and income from both parents in all 50 states.

In Arizona, child support payments are among the nation's lowest, ranging from $400 to $528 monthly on average. However, New Mexico's payments are in the second-highest tier, with an average of $735 to $880 monthly for the same families with the same income and number of children. Cost of living is one important factor, but it is not always clear. For example, the New England states have the highest support payments in the country, with the exception of Vermont, one of the nation's lowest. Other expensive states like New Jersey and Virginia also have relatively low assessments.

Non-custodial parents play an important role

Arizona parents who decide to divorce could face major changes in how their families function. While most parents hate to spend more time away from their children than necessary, divorce usually comes with some level of shared time between the exes. There are a number of different configurations for child custody, reflecting the fact that each family is unique. While joint or shared custody is becoming much more popular in family courts, there are also a number of reasons why families may choose one parent to maintain primary physical custody.

Employment requirements, living situations and other circumstances may mean that the best choice for the children is to stay with one of their parents most of the time. However, this does not mean that the other parent is deficient or has a lesser role to play in the children's lives. Non-custodial parents can enjoy active visitation schedules and loving parent-child relationships. In addition, they may share legal custody of the children, giving them the right to make decisions about education, health care and other critical topics.

How divorce can affect small business owners

Small business owners in Arizona who get a divorce may face a number of complex financial issues. The business may be the biggest asset the couple has. In some small businesses, it can be difficult to separate business and personal expenses, but this is necessary in order to get a value for the company for the purposes of property division. It is also necessary for determining child and spousal support.

Valuating a small business can be a complicated process. The business owner might be able to claim that some of the reported income was not a salary but a return on capital. This could increase the company's value for purposes of property division and reduce what the person may owe in child and spousal support. It may be best to work with a financial professional in determining the best approach. A professional appraiser will also be needed to valuate the company. With this value determined, the other spouse may be bought out with a lump sum payment or with the use of a promissory note.

Mistakes for divorced parents of teens to avoid

Divorced parents in Arizona who may have co-parented successfully for years might face new challenges as their children become teens. Parents may make the mistake of taking a more hands-off approach to their child and one another under the assumption that the teen is mature and responsible. While this is sometimes true, teens still need monitoring and guidance.

Parents should not assume that their teenager will share necessary information if they do not or even that the teen behaves the same way with each of them. Furthermore, a teen who is entrusted with keeping divorced parents informed is granted a lot of power by default. The ability to drive can give teens a greater sense of autonomy, but parents still need to make an effort to get to know the teen's friends and coordinate with the other parent about where the teen is.

Selling or keeping the family home in divorce

If one person in Arizona hopes to keep the home in a divorce, that person should treat the process with the same diligence that would be used in purchasing a new home. Emotional reasons, especially if there are children, often influence this decision, but it is important to make sure it is a good financial move.

First, it is necessary to get a sense of what the home is worth. While an appraiser can do this, it may be an expensive process. Quicker and less costly alternatives are a broker price opinion or a comparative market analysis. Since Arizona is a community property state, in most cases, each spouse will own 50% of the equity. If a person has more than this on hand, it might be possible to reduce the mortgage. However, the mortgage may be bigger if the person has to use cash from the home for the buyout.

Alimony: should you receive all payments now or spread them out?

As you embark on the path to divorce, you worry about how you will survive financially without your spouse's monetary support. At the same time, you realize that your marriage is over, and you have no choice but to break up.

The good news is that you can seek support from your spouse in the form of alimony, or spousal maintenance. In fact, instead of receiving monthly payments of alimony, it may behoove you to seek a large upfront alimony payment. Here is a look at why receiving an upfront payment of alimony may be the best option for you in Arizona.

When kids are involved in a divorce, they come first

Arizona divorces come in all shapes and sizes. Some marriages fail in the early years, some do not survive after several decades of union. While the ultimate reason why divorce proceedings are initiated may be as unique as the couple involved, at some point, the conclusion is reached that the two are better off apart than together. The dynamics of how the two handle this life-changing decision is severely tested when children are part of the equation. They are the most vulnerable and need the most protection.

When family court judges make decisions regarding child custody and child support, the overriding standard is what is in the best interests of the child. Parents naturally want that for their children, but too often in an acrimonious and contentious divorce, they lose their way. Children should never be used as pawns to get back or gain some advantage over the other parent. Importantly, child psychologists emphasize that the worst thing for the kids is not divorce, but conflict.

Addressing the issues that could be unique to a second divorce

Going through the end of a marriage can be a stressful and daunting experience. Even if this is your second or third marriage, should you and your spouse decide to part ways, the subsequent process can still be difficult to prepare for, regardless of whether you have been here before.

While you may feel that previous experience could help you gain insight into what comes next, there could be additional factors to consider that might not have been a concern before. Understanding the issues that may arise could prove essential to making informed decisions about your future.

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