When couples accrue property during the Arizona marriage in any way other than gift or inheritance(community property), they need an effective manner to divide that property during the divorce. Arizona law requires an “equitable” (near equal) division of community property. However, the Court generally sanctions any reasonable division, and mediation gives the parties more of an opportunity to get creative in the division. Further, mediation offers a calm and amicable environment to discuss these complex issues. In mediation, both parties make a list of all of the assets, and the parties discuss an agreeable division of all property with the assistance of the mediator.
Real Property. The parties generally decide to either sell the house, allow it to go into foreclosure (an increasingly popular option), or allow one party to keep the house. When one party keeps the house, that party usually arranges to refinance the house within a specific period of time. Where there is equity in the house, the equity can be divided through cash, or by giving the other party more of the remaining property. Within the mediation process, the parties can agree to an appraisal to properly determine the value of the house. Appraisals can also be used to determine the value of other property.
Vehicles. Parties tend to keep the vehicle that he/she traditionally drove. Sometimes, one vehicle is worth more than the other, and there can be an offset or a payout to equalize the values. Parties can get bluebook values for their vehicles at: www.kbb.com. In some cases, the parties have to agree to cooperate to transfer title or refinance the loan on the vehicle.
Retirement Accounts. If the parties do not have retirement accounts of near equal value, they generally retain a pension attorney to draft and submit a Qualified Domestic Relations Order (QDRO). This Order allows the financial institutions to divide the community’s portion of the account without penalties and without creating a taxable event. The parties select a pension attorney in mediation, and they also address how the pension attorney’s fees will be paid.
Financial Accounts. Parties discuss in mediation how to divide accounts in an equitable manner. The parties generally also discuss which accounts to close.
Businesses. If the business is a community business, the parties can either continue to jointly own the business, or one party can buy the other party out. If the parties cannot agree to a value for the business, the parties can jointly select a business appraiser to provide an estimated value.
Personal property. There are different techniques for dividing furniture, electronic equipment, etc. accrued during the marriage. For example, one party can divide all of the property into two lists and let the other party decide which list he/she wants. Another technique is to simply go down a master list and take turns picking items. The mediator can regulate the process and ensure that it is as pleasant as possible.
Separate assets. There are situations where a party will have an interest in the other party’s separate assets (assets received prior to marriage or through gift or inheritance). These issues can also be resolved in mediation.
Simmons & Gottfried, PLLC
a Professional Limited Liability Company
8160 E. Butherus Dr., Suite #7
Scottsdale, AZ 85260
