Category Archives: Division of Property

PREMARITAL AGREEMENTS ARE A WISE MOVE

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Premarital Agreement Basics

In the past ten years or so, there has been a significant rise in couples exploring the option of entering into premarital agreements. Many soon-to-be-married couples often avoid the topic of premarital agreements as they feel it could be detrimental to their relationship. This makes sense, since you’re essentially negotiating what would happen in the event of divorce. However, in many circumstances, it can be a really smart thing to do both financially and emotionally. Experts agree that a premarital agreement can be a very wise decision, not only because it outlines a couple’s finances, but because it can prevent a costly and contentious divorce proceeding if the marriage doesn’t work out in the future. So, in that sense, it can actually take the pressure off a newly married couple.

Here are the basics when it comes to a premarital agreement:

What is a premarital agreement?

A premarital agreement (also commonly called a prenuptial agreement or a “prenup”), by definition, is a written contract in which an engaged couple states their rights and responsibilities regarding premarital and post-marital assets and debts, including what would happen should their marriage end in divorce or death.

How much does a Premarital Agreement cost?

The cost of a premarital agreement greatly depends on the complexity of the issues and the amount of assets and debts to be protected, but it is far less expensive than the cost of a contested divorce litigation.

Who Needs a Premarital Agreement?

Of course, anyone can get a premarital agreement if they would like. However, there are certain circumstances in which it would be recommended. These circumstances include when one or both parties have children; when one or both parties have been previously married and divorced; when one or both parties own a home; when one or both parties own a business; or when there is a significant difference in wealth and/or debt between parties. People in these circumstances often have a greater interest in protecting their rights (particularly their financial rights) than those who are not in these situations.

 How do I get a Premarital Agreement? What does the process look like?

Typically, one party, usually the higher earning party, will retain an attorney to create a draft of the agreement. After that draft is completed, the other spouse will have their own attorney look it over, negotiate terms, and make suggestions for possible changes and edits. Once both parties and their attorneys have approved the final draft, the contract must be signed and executed.

Depending on the complexity, a premarital agreement can take anywhere from a few months to a few days, but it certainly is not the best idea to wait until right before the wedding to begin consulting with attorneys.

Do you have to have separate lawyers?

It is advisable for both parties to have their own attorneys. Having separate lawyers ensures that both parties’ interests are represented fairly. It will also make it more difficult for a party to challenge the provisions in the future.

One lawyer cannot, or at least should not, represent both parties as there would be a conflict of interest. Additionally, while it is not required that both parties consult with an attorney, we recommend it, because if one party has an attorney and the other does not, the party without an attorney will be at a significant disadvantage.

 Can you set the terms for child support and custody in a Premarital Agreement?

In Arizona, you cannot set the terms for child support or custody in a Premarital Agreement due to public policy concerns. The Family Court has the ongoing right to set or change the terms of legal decision-making authority, parenting time, and/or child support at any time, now or in the future. If the parties divorce, the courts will deal with those issues at that time. But keep in mind that while a parenting plan is not enforceable without a judge’s approval and signature, a Premarital Agreement is enforceable as a binding contract as soon as it is signed by the parties.

A Final Thought

Today many people are marrying later in life, after they are already established in their careers and have accumulated significant assets, and sometimes after they have been previously married and divorced. Blended families, in which each spouse has their own children from a prior relationship, are common. As a result, the need to protect assets is greater now than ever before. This makes entering into a premarital agreement a wise move.

By Logan Matura

 

At the Law Firm of Gary J. Frank P.C., our Arizona Family Law Attorneys Gary Frank, Hanna Amar, and Logan Matura are strong litigators and compassionate counselors. Gary Frank is a Phoenix Family Law Attorney with over 30 years of experience as a litigator and mediator. He has also acted in the capacity of a Judge Pro Tempore in the Maricopa County Superior Court, and served on the Governor’s Child Abuse Prevention Task Force. Law firm Partner, Hanna Amar is a highly-skilled Arizona Family Law Attorney with a passion for Family Law and children’s issues. She has extensive courtroom experience, and is also a certified mediator. Hanna has also acted as the President of the Young Lawyer’s Division of the Maricopa County Bar Association. Associate Attorney Logan Matura is an Arizona Family Law Attorney who received her Juris Doctor degree from New York Law School in Manhattan, NY. While in law school, she served as an intern for a Family Court judge in the Bronx, NY, and was a member of the Family Attorneys Mobilizing club. Our firm handles Family Law cases in the areas of divorce, custody (now called “Legal Decision-Making and Parenting Time), relocation (move-away), division of property, spousal and child support, modification actions, enforcement actions, grandparent and step-parent and non-parent rights, as well as other matters pertaining to families and children. If you are in need of a consultation, call us today at 602-383-3610; or you can contact us by email through our website at www.garyfranklaw.com.   We look forward to hearing from you.

I WANT A DIVORCE — NOW WHAT?

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Going through a divorce can be one of the most difficult times in a person’s life. Making the decision to dissolve your marriage (file for divorce) can be emotionally taxing, especially if there are children involved. The end of a marriage can be also be a confusing situation. Your divorce can include asset protection, child custody and support issues, spousal maintenance, domestic violence, or drug use/abuse. The attorneys at Gary J. Frank P.C. can make it easier for you and your children to go through the divorce process. We represent clients in both contested and uncontested divorce, with children or without children.

The following is some general information about marriage, and the general steps that need to be taken when filing for a divorce.

Covenant vs. Non-covenant

Arizona is a “no-fault” state, meaning that neither party needs to show blame or responsibility for the divorce. This is referred to as a “Non-Covenant” Marriage, and a marriage will be considered a non-covenant marriage unless the parties specify that they are entering into a “Covenant Marriage.” The only question that needs to be answered in a divorce of a Non-Covenant Marriage is whether the marriage is “irretrievably broken” or that there is no chance of the parties reconciling.

A Covenant Marriage is different in that the parties must have the intent to enter into this type of marriage, which should be declared on their application for a marriage license. A Covenant Marriage is also different than a Non-Covenant Marriage because in order for the parties to divorce, someone must be at “fault.” This is important because in a Covenant Marriage, a state court cannot grant your divorce without a reason. This can include adultery, felony, habitual drug or alcohol use, or if both parties agree to a divorce.

How to File for Divorce in Arizona

  • Residency Requirement

In order for a person to file for divorce in Arizona, one or both spouses must have lived in Arizona for at least 90 days. This includes spouses that are members of the Armed Forces and have been stationed in Arizona for at least 90 days.

  • Fill out your forms

In order to initiate your divorce in Arizona, the spouse filing for divorce (the petitioner) will need to file a “Petition for Dissolution of Marriage” with the Clerk of the Superior Court in the county the party resides. The Petition asks the court grant the parties’ divorce, while also entering other orders such as the separation of marital community property, the identification of sole and separate property, and if there are children involved, legal decision making and parenting time orders. This is only the start of the divorce process, and the requests in your petition are usually not considered until evidence and testimony are presented at a trial or evidentiary hearing.

  • Service of Process

Once you file your Petition for Dissolution, you will need to serve the other party (your spouse) with a copy of your documents, which include the Petition, the Summons, and the Preliminary Injunction, and other required documents. There are several methods of service, but the most common are arranging service with a private process server, or having the other party sign an Acceptance of Service, acknowledging that he/she has received the divorce paperwork. The signed Acceptance of Service must then be filed with the clerk of court.

Once the Petition is filed, you have 120 days from the date of filing to serve the other party. If the party is not served within that time frame, your case will be dismissed. Once your spouse is served, he/she will have 20 days to file their Response to your Petition (or 30 days if served out of state). If your spouse is served and fails to file a Response within the applicable time period, then you can apply for a “default judgement.”

  • 60-Day waiting period

The parties (you and your spouse) will have to wait at least 60-days before the Court will enter into any orders. This is otherwise known as the “cooling-off” period. This cooling-off period begins when your spouse is served. For example, even if you and your spouse have agreed on all issues in the divorce and submit a Decree, the Court will not sign it or enter any orders until the 60-day period has lapsed.

  • Decree of Dissolution

The order that finalizes the divorce is called a Decree of Dissolution. This will outline all of the terms of the divorce, including division of property and parenting issues, and each party will be returned to single status. The terms of a Decree of Dissolution can be ordered by the Court after a final trial; or the parties can negotiate their own agreement and submit a Consent Decree of Dissolution of Marriage to the judge for approval. If the parties submit a Consent Decree, and the judge approves and signs it, then they may be able to obtain a final divorce without ever stepping foot in a courtroom.

 

by Hanna Juncaj

The Law Firm of Gary Frank P.C. is an Arizona Family Law firm that has been a fixture in the prestigious Biltmore area of Phoenix, Arizona for over thirty years.  Our attorneys, Gary Frank and Hanna Juncaj, are strong litigators, highly-skilled mediators, and compassionate counselors. We handle divorce and spousal maintenance cases, as well as legal decision-making, parenting time, child support, relocation/move-away, Paternity, Grandparents’ rights and Non-Parents’ rights cases, modification actions, enforcement actions, and all other matters related to Family Law.  If you are in need of a consultation, attorneys Gary and Hanna would love to talk to you.  Please call us today.  You can reach our office at 602-383-3610, or you can contact us by email at through our website.  To learn more about our firm, take a look at our web site at www.garyfranklaw.com.  We’d be happy to help you.

DOMESTIC PARTNERSHIPS IN ARIZONA

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I have recently been asked, by a number of people, whether Arizona recognizes Domestic Partnerships, and how it compares to marital rights.   Domestic partnerships are recognized in Arizona, but only for limited purposes, such as where a patient in a hospital is unable to make or communicate healthcare treatment decisions.  Arizona Revised Statutes §36-3231 provides that, in cases where the patient is unmarried, a domestic partner may be allowed to act as a surrogate.  Certain cities in Arizona recognize domestic partnerships and have registries where partners can file a declaration of domestic partnership or a civil union, but their rights are generally restricted to visiting the other partner in a hospital or health care facility.  Some insurance companies provide options for domestic partners, and others don’t.  You would have to contact your insurance company to determine what, if any, benefits are provided.
It is important to note that there is no law in Arizona giving domestic partners the same or similar rights as a couple who is married.  By law, married couples in Arizona have inheritance rights; the right to be covered on health insurance policies; the right to make healthcare decisions for a spouse under certain circumstances; and, in the event of a divorce, the right to a fair division of community property, the right to receive spousal maintenance (if they qualify under the statute), and parental rights.  For domestic partners, however, none of those things are automatic, and some of them (such as a community propertydivision, and receiving spousal maintenance) are precluded under Arizona law.

Now that both heterosexual and same-sex couples have the right to marry in Arizona and all other states, domestic partnerships and civil unions are not as favored, and the development of laws around these forms of partnership has slowed.  A marriage provides far more legal protection than a domestic partnership, a civil union, or cohabitation.

If you have questions about domestic partnership law and your legal rights, I suggest that you make an appointment for a consultation with a Family Law attorney.

Gary Frank & Jacinda Chen

 

Gary J. Frank is an attorney and mediator with over thirty years of Family Law experience in dealing in divorce, custody, and parenting issues. For many years he acted as a Judge Pro Tempore in the Maricopa County Superior Court, which gave him an insight into the inner workings of the courts that many attorneys lack.  In addition to representing Family Law clients in litigation, we are also willing to help people by working with them on a Limited-Scope or Consultation-Only basis.  Our office is located in the Biltmore area of central Phoenix, with satellite offices in Scottsdale and Paradise Valley, Arizona.  We can be reached by telephone (602-383-3610); or by email at [email protected]  You can also reach us through our website at www.garyfranklaw.com.  If you are in need of a consultation regarding any area of Family Law, contact us today.  We’d be happy to help.

DIVIDING PROPERTY IN A DIVORCE – HOW THE ARIZONA FAMILY COURT DOES IT

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One of the first and most vital steps in a divorce is figuring out the division of property.  Naturally, people want to know how Arizona courts will divide their property.  Below are some of the most commonly asked questions that I hear from clients:
How does Arizona divide property in a divorce?
All states are either community property states or equitable division states.  Arizona is one of nine community property states.  Community Property is based on the theory that a married couple is a team, and the role that each spouse plays benefits the team.  One may be the breadwinner, the other might care for the children; or they may both work and share the childcare responsibilities – but it’s a team effort.  Therefore, the law provides that income earned by either party, and anything purchased or accumulated with that income during the marriage, is considered to be community property, belonging to both parties 50/50.  If the parties later divorce, then the community property will be divided substantially equally.
How does the court determine what is Community Property versus Separate Property?
In a divorce, the court must determine what constitutes “Separate Property,”  and what constitutes “Community Property.”
Arizona Revised Statutes § 25-211 defines Community Property as all property acquired during marriage except for property acquired by gift, devise, or descent (inheritance).  This means that salary, bonuses, and commissions earned by each spouse through employment are community property.  Employment income placed in a bank account (regardless of the name on the account) is generally considered to be community property.  Stocks, bonds, and brokerage accounts accumulated during the marriage are community property. Houses and cars purchased with marital funds constitute community property (unless the other spouse signs a deed disclaiming his or her community property interest).  Furniture and personal items purchased with community monies will be considered community property, unless there is evidence that it was a gift. And monies contributed to pensions, 401k,’s IRA’s, and other retirement accounts during the marriage are considered to be community property.

Arizona Revised Statutes, § 25-213 defines Separate Property as anything acquired by a spouse before the date of marriage or after service of petition for divorce (if the divorce actually goes through).  Gifts and/or money received by way of inheritance during the marriage are also separate property.  All of the rents, profits, earnings, dividends, and interest on separate property remain separate property.

In other words, your old baseball card collection is separate property.   The Barbie dolls your mother saved from when you were a kid – separate property.  That family heirloom your Aunt Gladys gave you last Christmas – separate property.  The money your grandfather left you when he died – separate property.  The 60” TV and surround sound system you bought with that inheritance – separate property.  The stock you purchased with grandpa’s money (which went up 10% last year) – also separate property.  If you owned a house prior to your marriage, then rented it out after you got married — the rental income is your separate property.  If you later sold that house and used the money to buy another house in your own name – well, that new house is your separate property, too (even if you and your new spouse are living in it).

BUT WARNING:  If you’re not careful, what starts out as separate property can be magically changed into community property during the marriage – as will be explained below.

The “marital community” terminates when a spouse files and serves a Petition for Dissolution of Marriage, or an Annulment.  Thereafter, income earned by either party (which was considered to be community property) is now the separate property of the person who earns it.

What does the statute mean when it says the court divides community property “equitably”?
Equitable division does not always mean an equal division.  What it really means is a “fair” division.  The court is not required to divide community property exactly equally; but it cannot, without reason, create a gross disparity or make its award arbitrarily.  In the absence of sound reasons which justify contrary results, apportionment of the community estate upon dissolution of marriage must be “substantially equal.”
In making an equitable division, the court may consider the length of marriage as part of any unequal division. The court can also divide property unequally if it determines that one of the spouses wasted community assets (for example, if one of the spouses gambled away thousands of dollars, or spent community funds on drugs, etc.)
What happens if separate property is commingled with community property?
When community property is mixed with separate property, the potential issue of “commingling” arises.  Commingling happens when, for instance, a spouse puts the funds from her grandmother’s inheritance into a joint account that belongs to both spouses; or when a spouse’s salary from work (community property) is deposited into the checking account that he set up prior to the marriage in his own name (separate property).
Mixing separate and community funds makes for a confusing situation, and it can lead to the loss of your separate monies.  Funds that are mixed can retain their character as separate property, but only if you can still figure out what funds come from where.  You must be able to trace the separate assets.  However, when separate and community monies are mixed there is a legal presumption that the new “pot” of commingled funds is entirely community property.  The burden is upon the one claiming that the proceeds are separate property to prove, by “clear and satisfactory evidence,” that the separate property portion can be traced. And this is no easy task.
Can property lose its character as separate property and become “transmuted” into community property?
Absolutely!  Here’s an example:  If you are depositing your separate funds into a community property account and, over time, you are writing checks, making deposits and withdrawals, etc. — eventually the separate and community monies will become mixed to such an extent that you can’t trace it or figure out what belongs to who.  At that point, it has undergone “transmutation.”  Your separate money has lost its character separate property.  It is now community property and will be divided essentially equally in a divorce.
Can a person unintentionally make a “gift” of separate property to the marital community?
Yes.  A common scenario is where a party contributes separate funds to pay a down-payment on a marital home that is taken in joint tenancy.  Years later, one of the parties files for divorce and, when the house is sold, the party who contributed the separate funds for the down-payment wants his/her money back, claiming that it was intended as a loan, and not a gift.
The necessary elements to find that a gift was made include: (1) donative intent, meaning that you intended to make a gift, (2) delivery, meaning that the gift was actually delivered to the other person’s possession, and (3) a vesting of irrevocable title upon such delivery, meaning that you delivered the gift with no intention of retaining any sort of interest in the piece of property any longer.
Under Arizona law, there is a presumption that contribution of separate assets to community property equals a gift.  The presumption can be rebutted through clear and convincing evidence showing that there was no intent to make the alleged gift.  But this is a steep hill to climb.  In the scenario above, rebutting the presumption of a gift will be extremely difficult without a written memo or other persuasive evidence of intent.
How can I protect my separate property?
Here are some ways that you can protect your separate property:
·      (1)  Keep your pre-marital monies in a separate bank account in your own name;
·      (2)  Avoid commingling;
·      (3)  If you are buying a house together and you are contributing your separate monies to the down payment, be sure to draft a written memo confirming your intention that the use of separate funds to pay the down payment (or any other payment) is a loan from the marital community and is to be paid back upon sale of the property – and make sure your spouse signs the memo;
·      (4)  Place your separate property in a living revocable trust;
·      (5)  Obtain “innocent spouse” status (the IRS provides this status to spouses to relieve them of the responsibility for paying taxes that the other spouse owes);

·      (6)  If you receive an inheritance, place the money in a bank account in your name alone, and do not mix it with community funds (for instance, make sure not to deposit your employment income into that account).

If you have substantial separate-property assets and/or if you do not want your employment income to be considered community property, then you would be well-advised to have an attorney prepare a valid Prenuptial Agreement (or a Postnuptial agreement, if you are already married).  The agreement will need to conform to the law and be signed by both spouses.

 

Our Family Law Firm is here to help you work through even the most difficult and complicated property division matters. Gary J. Frank is an Arizona attorney and former Judge Pro Tem with over thirty years of experience in dealing with custody and parenting time issues in Family Court.  Hanna Juncaj is a highly skilled litigator, a compassionate counselor, and a strong advocate for every one of her Family Law clients. To schedule a personal consultation with our attorneys, you may contact us by telephone at 602-383-3610, or by email through our web site at www.garyfranklaw.com.

The issues in this blog are provided general informational purposes only and should not be relied on as legal advice in your particular case, nor should it be construed as forming an attorney-client relationship.  Every Family Court case is unique.  If you have a matter that appears similar to any of the scenarios that you read in this blog, you should be aware that: (1) even a slight difference in a factual situation can lead to a vastly different result; and (2) the laws are constantly changing and new laws are continually being enacted.  Legal advice cannot be given without a full consideration of all relevant information relating to your individual situation.  Therefore, if you have an important legal issue, you should obtain a consultation with a qualified attorney.  


EMBRACING CHANGE

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“Change is constant.  For some people, especially those who come from bigger companies, the constant change can be somewhat unsettling at first.  We must all learn not only to not fear change, but to embrace it enthusiastically and, perhaps even more important, to encourage and drive it.  We must always plan for and be prepared for constant change . . . Never accept or be too comfortable with the status quo, because the companies that get into trouble are historically the ones that aren’t able to adapt to change and respond quickly enough.”


Tony Hsieh
CEO of Zappos.com
from the book, “Delivering Happiness”


The need to embrace change applies to all of us, in both our personal lives and at work.   Over the years, the practice of law has seen enormous changes.  The  most successful lawyers are the ones who not only accept, but embrace, change.  Our attorney, Gary Frank, remains on the “cutting-edge” of Family Law by staying up to date with the latest statutes passed by the Arizona Legislature, and by studying the new decisions handed down by the Supreme Court and Appellate Courts.  He improves his knowledge of the law by attending continuing legal education courses on a regular basis throughout the year.  And he hones his courtroom skills by using the very best litigation practices and strategies.

Many law firms are locked into a particular office location that is often difficult or inconvenient for clients to visit.  But modern advances in technology, such as networked computers, laptops, tablets, smart phones, and the internet, have allowed lawyers to become “road warriors” and provide top-notch representation while being more accessible to their clients.  Therefore, the Law Offices of Gary J. Frank are conveniently located throughout the Valley — in Scottsdale, Paradise Valley, Tempe, and the prestigious Biltmore area of Phoenix — in order to better serve our clients.      

Yes, change is, indeed, constant; and our ability to embrace change has enabled us to be successful.  But, just as importantly,  our attorney, Gary Frank, is also known for embodying qualities that are timeless and enduring:  Experience; Excellence; Integrity; Strong Advocacy; Common Sense; and and a Commitment to always putting his clients first.  We are a modern law firm with old fashioned values.  That’s what sets us apart.

Our attorney, Gary Frank, has been a courtroom litigator in the Family Law arena for over thirty years, and is a strong and committed advocate for his clients.  In addition to being a litigation attorney, Mr. Frank has acted in the capacity of a Judge Pro Tem in the Maricopa County Superior Court.  This has given him an understanding of the inner-workings of the court, and a unique perspective  that most attorneys lack.  He has also acted, for many years, as a professional mediator of Family Law disputes.   We handle a full range of Family Law matters, including divorce, custody, spousal and child support, division of property and assets, modification and enforcement actions, as well paternity/maternity cases, grandparent or non-parent custody and visitation actions, and relocation/move-away cases.  If you are in need of a consultation regarding any area of Family Law, please do not hesitate to give our office a call today at 602-383-3610; or feel free to contact us through our web site at www.garyfranklaw.com; or by email at [email protected]   We look forward to hearing from you.

A ONE-TIME CONSULTATION WITH AN ATTORNEY CAN REALLY HELP

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Filing for divorce on your own can be overwhelming.  Wading through the court-approved forms may be confusing and is often an exercise in futility.  What are my legal rights? What should I ask for? How does the court process work?  How do I know I’m doing this correctly?  There is so much at stake:  Division of property and debts, custody, parenting time, child support, spousal maintenance.  Handling any one of these issues improperly could mean the difference between a future of relative comfort or years of suffering.  When the divorce is done, it’s done.  You have one chance to get it right.  Undoing a mistake is difficult and, sometimes, impossible. 

Document preparers can help you fill out paperwork but they’re not trained in the law.  They’re prohibited from providing legal advice.  Lawyers, on the other hand, have the benefit of many years of legal training and continuing education.  They are well-versed in the law; they understand the divorce process and can help you understand what is best for you.


But what if your divorce is simple, or you just can’t afford ongoing legal representation?  Even if you’ve decided to represent yourself, you can still benefit from an attorney’s advice — and chances are that the expense is less than you imagined.  You can use an attorney as a counselor, an adviser, a guide to help you through the legal process.

A one-time consultation with an attorney is relatively inexpensive, and it can help tremendously.  In a single meeting, the lawyer can assist you in filling out the paperwork.  He or she can help you understand your legal rights, and explain what you need to do to request a hearing, obtain financial information, or get a trial date.  The lawyer can formulate a game plan, answer your questions, and help you navigate through the sticky and sometimes complicated issues involved in a Family Law case.  Don’t just assume that you can’t afford legal advice.  Call for a one-time consultation.  You may be surprised at how affordable it is — and how much it helps.




Gary Frank is an Arizona Family Law Attorney with more than 30 years of experience in handling cases involving divorce, custody, parenting time, child support, spousal maintenance, division of property, grandparent and non-parent rights, and all other matters relating to family law.  If you would like a consultation, feel free to contact us at 602-383-3610 or by email at [email protected]  To find out more about our firm, take a look at our website at www.garyfranklaw.com.

It’s easier than you may think, and less expensive, too.  

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