What happens when a party does not fully disclose all debts and assets prior to the entry of the dissolution decree?

By Jessica M. Cotter, Esq.

On occasion there may be assets or debts that were not included in the Decree of Dissolution of Marriage. Pursuant to 25-318(b) the property or debt is treated as what is termed tenants in common with each party owning one- half of the property and being responsible for one-half of the debt.

Before you file with the court if such an error occurred you must first look at the terms of the Decree of Dissolution of Marriage.  There may be language in the decree that prevents you from bringing the action or language that protects you from the debt.

If the parties discover the issue and attempt to remedy it out of court make sure that any agreement is done in writing, signed by both parties, before a notary. If it is not once the property is transferred out of the parties name the family court cannot address the issue. Then it is in the hands of the civil court and they will also require something in writing.

 If you do find that an asset or debt was left out of the Decree of Dissolution I highly recommend talking with an experienced attorney in your area because it is a complicated issue to handle without assistance.   It is an area of family law that is very fact specific and must be handled the correctly, otherwise you could lose the property or be responsible for a debt you did not know existed.

The Law Firm of Jessica M. Cotter, P.L.L.C.

18301 North 79^th Avenue, Suite F-186

Glendale, Arizona, 85308

602-843-3004

Jmcotterlaw.com

Jessica.Cotter@azbar.org

When Should You Update Your Will

By Harry J. Lenaburg

            It is important for individuals and couples to have a Will.  This is the document in which you let the world know how you want your property distributed upon your death, and, for younger parents, where you would designate the person or persons you wish to care for your minor children, as their Guardian and/or Conservator.  The Guardian cares for the personal needs of the children, while the Conservator watches over the financial resources of the children.  One person can wear both hats, but you may also choose to have different people perform the different tasks.  The duties of a Guardian and a Conservator will be the subject of a later post.

            Young parents should be thinking about, and discussing, who they want or agree should be asked to assume that awesome responsibility of caring for their minor children in the event of their untimely death.  You must be certain that the individuals you wish to be appointed are willing to be so appointed.

            At any other life change, the birth of a child, the death of your spouse, the passing of your proposed Personal Representative, you should consider the terms of your Will, and determine if it is time to update your Will.  It is a good idea to meet with an experienced attorney to discuss your Will, your estate plan and those documents that all should have a Living Will, a Medical Power of Attorney, and possibly a General Durable Power of Attorney.

The Law Firm of Jessica M. Cotter, P.L.L.C.

18301 North 79^th Avenue, Suite F-186

Glendale, Arizona, 85308

602-843-3004

Jmcotterlaw.com

Jessica.Cotter@azbar.org

What happens when one of the parties in a Divorce (Dissolution of Marriage) files for Bankruptcy in the middle of the divorce case?

By Jessica M. Cotter, Esq.

There are many reasons people file for a Divorce. In my ten years experience the most common reason is that people are having financial issues and the current economy has made this even more apparent. It has lead more people to make very difficult decision to file Bankruptcy.

When there is a divorce case before the family court and only one party files for bankruptcy the family court has no choice but to stop all proceedings because bankruptcy is in federal court.  The Bankruptcy law states that once a bankruptcy is filed all legal proceedings in any court are stopped until the further order of the bankruptcy judge, this is called an automatic stay. The bankruptcy is not done until the court enters a discharged, which means that most or all of the unsecured debts of the party who files the Bankruptcy are wiped out and they start again with a clean slate.

If there are issues regarding legal decision making (custody), parenting time, child support and spousal maintenance you can ask the bankruptcy court to lift the automatic stay, which the court does usually grant. This gives the power back to the divorce court to handle just these issues. The court also cannot divide any of the debts or assets of the parties until the discharge is entered.  The discharge of community debt by one party may force the other party to file bankruptcy to as well, in order to protect them from the creditors from the marriage.

If this happens to you please contact an experienced Family Law attorney and a Bankruptcy attorney in your area.  Some attorneys and law firms handle both types of matter.

The Law Firm of Jessica M. Cotter, P.L.L.C.

18301 North 79^th Avenue, Suite F-186

Glendale, Arizona, 85308

602-843-3004

Jmcotterlaw.com

Jessica.Cotter@azbar.org

New Requirements for Guardians, Conservators and Personal Representatives

By Harry J. Lenaburg, Esq.

Effective September 1, 2012 there are some new requirements for individuals who want to be appointed as a Guardian, a Conservator or a Personal Representative for an Estate.

When applying to the court to be appointed as a Personal Representative of an Estate, whether through the Informal Probate process or the Formal Probate process, you must take both a “Personal Representative Training Module” and also probably an “Unlicensed Fiduciary Training Module”.  These training modules are available online and also at the information desk or self-service center at each Maricopa County Superior Court facility.

When applying to be the Guardian or Conservator for either a minor, or an adult protected person, you would, or course, need to take either the “Guardianship Training Module” or the “Conservatorship Training Module”, whichever is appropriate.  In some cases you may need to apply to be both the Guardian and Conservator of the individual.  If so you can take a combined “Guardianship and Conservatorship Training Module”.  You will also need to complete the “Unlicensed Fiduciary Training Module” to be appointed as Guardian and/or Conservator.

You can find these Training Modules online at http://www.superiorcourt.maricopa.gov/SuperiorCourt/Self-ServiceCenter/Forms/ProbateCases

The Law Firm of Jessica m. Cotter, P.L.L.C.

18301 N. 79^th Ave, Ste F-168

Glendale, AZ  85308

602-843-3004

jmcotterlaw@gmail.com

http://jessicacotterlaw.com/

How is Spousal Maintenance (Alimony) determined in the state of Arizona?

By Jessica M. Cotter, Esq. 

There is not a simple answer to this question. There is no formula to determine how much spousal maintenance is to be paid or for how long it should be paid.  Loose statistics indicate that the average award in Maricopa County is $500.00 per month and the average duration is five years. It is intended to assist the lesser earning or unemployed spouse to be self supporting.  Spousal maintenance is taxable income to the party receiving it, and a deduction from the income of the party paying it.

According to Arizona Revised Statues 25-219 (a) the person who requests spousal maintenance must first qualify to receive spousal maintenance.  The person requesting it must meet one of the following 4 criteria.

1.      Lacks sufficient property, including property apportioned to the spouse, to provide for that spouse's reasonable needs.

2.      Is unable to be self-sufficient through appropriate employment or is the custodian of a child whose age or condition is such that the custodian should not be required to seek employment outside the home or lacks earning ability in the labor market adequate to be self-sufficient.

3.     Contributed to the educational opportunities of the other spouse.

4.     Had a marriage of long duration and is of an age that may preclude the possibility of gaining employment adequate to be self-sufficient.

Once that hurdle is overcome then the court looks at 13 factors that will help them determine the amount and duration of spousal maintenance. Those factors are found in Arizona Revised State 25- 319 (B) and they are as follows:

            1. The standard of living established during the marriage.

2. The duration of the marriage.

3. The age, employment history, earning ability and physical and emotional condition of the spouse seeking maintenance.

4. The ability of the spouse from whom maintenance is sought to meet that spouse's needs while meeting those of the spouse seeking maintenance.

5. The comparative financial resources of the spouses, including their comparative earning abilities in the labor market.

The Law Firm of Jessica M. Cotter, P.L.L.C.

18301 North 79th ave

Suite f-168

Glendale, Arizona 85308

602-843-3004

jmcotterlaw@gmail.com

jessicacotterlaw.com

Financial Issues and Bankruptcy in Divorce Cases

By Harry J. Lenaburg, Esq

In many Family Law cases a primary reason for the breakdown of the marriage is financial problems.  It appears to be human nature, or at least an often occurring phenomenon, that individuals and couples tend to live a life style that consumes virtually all of their available income.  Thus when the unexpected happens, for example, a cut back in hours at work, a layoff, an increase in the monthly health insurance premium through your employer or uncovered medical bills due to an illness or accidental injury, there is no cushion to fall back on.  These and similar financial pressures result in conflicts between spouses, and may ultimately lead them to the filing of a Petition for Dissolution.

Often either or both of the spouses will decide that it is in their best interest to file a Bankruptcy to eliminate the debt.  Our office does not represent Debtors in Bankruptcy matters, however, in a circumstance where a Bankruptcy may be appropriate, we always refer the client to an experienced Bankruptcy practitioner, to insure that the client is properly advised and represented in the Bankruptcy matter.

Once a Decree of Dissolution is entered by the court, the parties must file separate Bankruptcy petitions.  This results in both of the now ex-spouses incurring an attorney fee and a filing fee for their separate bankruptcy matters.  In our practice we encourage the spouses, assuming they will both wind up filing for Bankruptcy protection, to file a joint Bankruptcy petition before the dissolution is finalized by decree.  That way the cost of the Bankruptcy is around one half of what it would be if they filed separately, and it also takes the issue of debt out of the negotiations or litigation to resolve the dissolution.

Of course the better policy regarding finances would be if we would all be better stewards of our money, being prepared for those unexpected financial contingencies, but faced with the reality on the ground in many Family law cases I am confident that this advice to clients to file the bankruptcy jointly before finalizing the dissolution, will provide both parties with a more satisfactory result, at least as far as debt is concerned.

The Law Firm of Jessica M. Cotter, Esq. 

18301 North 79th ave

Suite F-186

Glendale, AZ 85308

602-843-3004

jmcotterlaw.com

jmcotterlaw@gmail.com 

What is the basis for a modification of your child support under the Arizona Child support guidelines?

By. Jessica M. Cotter, Esq.

Child support may be modified if there is a substantial and continuing change in the circumstances of either parent.  Such a change must be due to circumstances that are not voluntary, such as an increase or decrease in health insurance cost, daycare costs or a change in parenting time that would result in an increase or decrease of at least 15% in the paying parent’s child support obligation.  You should always speak with an experienced family law attorney to review and discuss such matters.

Examples:

Change of income:

 Father support obligation is $300.00 per month. Father loses his job due to layoffs and is unable obtain another job at the same income.  Should this change in income result in his child support obligation being reduced to $200.00 per month we can see that this is a reduction of 33%.  As this is a reduction greater than 15% , Father  could Petition the family court to have his child support reduced.

Change of day care cost:

Mother’s support obligation is $500.00 per month.  Father is paying the child care cost.  When the child starts school the child care cost is reduced significantly and this would result in Mother’s child support obligation being reduced to $300.00 per month.   Since his is a 40% change in the child support obligation Mother could file a petition with the family court to have her child support obligation reduced.

Change of health insurance cost:

Father’s child support obligation is $400.00 a month.  Father was paying the health insurance cost for the minor children.  Due to the soaring premium Father stopped paying the health insurance cost for the children. Mother then started paying the health insurance cost for the children resulting in Father’s obligation increasing to $600.00 per month.  Since this is a 33% difference in the child support Mother would be able to Petition the court to have the child support increased.

Parenting time:

 The parents share equal parenting time with the children.  Since the parents’ have approximately equal incomes, and approximately equal child care and health insurance costs, there is no child support ordered.  Mother moves to far enough away from the children’s school to result in a change in the parenting plan, resulting in the children residing primarily with father. This would result in a child support obligation from Mother to Father in the amount of $150.00 per month.  Since this is a 100% change in the support obligation, Father could Petition the family Court to modify the child support to receive $150.00 per month.

The above examples only involved change in one of the factors that the Court considers in calculating the child support. If more than one factor changes it can change the outcome. Everyone should have their child support reviewed by an attorney whenever there is a major life change or at least every two year. Child support cannot be retroactively modified. The modification can only take effect the first day of the month after a Petition to modify the child support is served.

Source: The Arizona Child support Guidelines June 1, 2011

The Law Firm of Jessica  M. Cotter, P.L.L.C.

18301 North 79th ave 

Suite F-186

Glendale, Arizona 85308

602-843-3004

jessica.cotter@azbar.org

jmcotterlaw.com