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How can Arizona’s community property laws destroy my sole and separate property? Learn how to prevent transmutation of sole and separate property and plan for the future.
How your business is effected during a Divorce.
Avoiding debt belonging to your spouse before marriage.
In 2013 Arizona’s grandparent visitation statute was consolidated with our in loco parentis statute. The new terminology is “third party rights” and the statute is ARS 25-409. The idea is to allow a third party, including but not limited to a grandparent or great grandparent, to petition the court to determine custody, visitation and/or legal decision making rights for a minor child. The court recognizes that family life is all too often fractured and non-traditional. Children receive care and emotional and financial support from many persons other than their parents. Parents are sometimes unavailable or ineffective due to illness, absence or substance abuse.
A petition for grandparent or other third party rights should be filed in the existing family law case involving the children if one exists.
The Petition must be well thought out. The statute provides that a Petition shall be summarily denied unless the initial pleading establishes that all of the following circumstances are true:
- The petitioner stands “in loco parentis” to the children;
- It would be very detrimental to the children to be placed or remain in the care of the legal parent who wants to keep the children; and
- No court has entered orders concerning the care of the child in the past year unless a true emergency exists
Like everything else you own, your business is an asset. When contemplating divorce, you will be required to equitably divide your community interests in any assets acquired during your marriage. This includes your business.
However, equitable division does not necessitate that every single item be split in half. Rather, Arizona follows the aggregate theory of community property meaning that each of you will receive a share of the assets which will be equal in value, but not equal in kind.
To determine what will happen to your business you need to consider several things.
When couples are divorcing, it often occurs that the residence is one of the most valuable assets to divide, and as a result, needs to be sold in order to equitably divide the assets between each party. Typically, a federal income tax exclusion is available to offset some or all of the gain on the house. However, depending on how the divorce is structured, one of the parties could forfeit their portion of the exclusion resulting in a surprise from the IRS.
The IRS permits up to $250,000 exclusion for a single person. A married jointly-filing couple can exclude up to $500,000. If the home sale occurs prior to entry of the divorce and the couple is divorced that same year, the issues are usually fairly easy to deal with. They can jointly file their tax return, or file separately and each claim their half of the exclusion.
However, if the sale will occur after the divorce is finalized, things get more complex. At least one party will be required to remain residing in the property for two out of the last five years before the house is sold.
What happens if you signed an acknowledgment of paternity and later find out that you are not the minor child’s parent? What can be done if you wish to revoke the acknowledgment of paternity? In Arizona, the mother or father may rescind the acknowledgment of paternity within the earlier of:
1. Sixty days after the last signature is affixed to the notarized acknowledgment of paternity that is filed with the department of economic security, the department of health services or the clerk of the court.
2. The date of a proceeding related to the child, including a child support proceeding in which the mother or father is a party.
A rescission must be in writing and a copy of each rescission of paternity shall be filed with the department of economic security. The department of economic security shall mail a copy of the rescission of paternity to the other parent and to the department of health services.
Making the decision to divorce is hard. Accomplishing a divorce is harder. Clients often ask what they can do to prepare for divorce and minimize potential problems. Here are some practical steps that will help.
a. Make sure that you have copies of all important documents such as deeds to real estate, titles to vehicles, bank statements, brokerage statements, retirement account statements, insurance information, employee benefit information, paycheck stubs and tax returns, both business and personal. Obtain evidence of all debt including credit card statements, personal loan information and other documentation of indebtedness. Obtain the originals of insurance policies and children’s birth certificates and passports. It is common for these materials to disappear or become difficult to access once a divorce is filed. Monitor the mail for several months prior to a divorce to make sure that you have documents evidencing all assets and debts.
b. Keep your copies of these materials in a safe place–not at home or at any other location that your spouse has access to.
c. Open a new bank account at a new financial institution for the deposit of your earnings and other monies. Change passwords on all accounts that you have access to.