Community Property and Spousal Support in Arizona
Understanding the Impact of Community Property on Spousal Support in Arizona
It is important to understand the impact of community property and spousal support in Arizona if you are facing a divorce or legal separation.
We are going to talk to you about the Arizona Court of Appeals’ decision on how an evaluation of the amount of community property affects a spouse’s claim for spousal support in an Arizona divorce case.
We are also going to discuss what happens to a spousal support claim when a spouse lacks sufficient property to provide for his or her reasonable living expenses over his or her lifetime.
The Arizona Court of Appeals’ Decision in the Case of In re Marriage of Cotter & Podhorez
In this case, the divorce court denied Wife’s request for the husband to pay her spousal support as a part of the parties’ divorce. Wife appealed the denial of her spousal support claim to the Arizona Court of Appeals. The Arizona Court of Appeals, therefore, had to review the trial court’s ruling to determine if the judge should have awarded the wife spousal support in the divorce.
The Arizona Court of Appeals, in its published opinion In re Marriage of Cotter & Podhorez, 245 Ariz. 82, 91, 425 P.3d 258, 267 (Ct. App. 2018), had to determine what makes a spouse eligible for an award of spousal support in a divorce in Arizona.
The Spouses’ Financial Condition During the Marriage
The parties were married Cotter in 1993. In 2013, Wife suffered an illness that prevented her from continuing to work in her career in the banking industry. The wife had worked in the banking industry for twenty-five years before became ill. The wife applied for and received social security disability benefits. Despite her illness, the wife was allowed to work part-time while still receiving her social security disability benefits.
Both Husband and Wife filed for bankruptcy in 2016. The husband also moved out of the marital home and the wife filed for divorce in 2016 as well. In her divorce petition, the wife asked the court for an award of spousal support from the husband.
The husband suffered an acute mental health problem during the divorce. The husband claimed the mental health problem rendered him unable to work and, in fact, pointed out he had not worked for the four months prior to the final divorce trial. The husband also presented evidence at the final divorce trial that he was receiving short-term disability payments as well.
Consideration of the Amount of Property the Spouses Will Receive in the Divorce
Arizona spousal support laws allow a court to order one spouse to pay spousal support payments to the other spouse. The court, however, must first determine if the spouse asking for spousal support is eligible for such an award after the court considers the financial circumstance of the spouse asking for spousal support.
The court must also evaluate the financial condition of the spouse who would be paying spousal support when deciding whether to grant a spouse’s request for spousal support. One the court evaluates the financial condition of both spouses, the court would then decide how much spousal support to award the length of time that spousal support should be paid. In this case, the trial court determined the wife was not entitled to an award of spousal support.
Whether a Spouse Lacks Sufficient Property to Provide for Their Own Support
The Arizona Court of Appeals stated a divorce judge can award spousal support to a spouse if that spouse will not receive a sufficient amount of property in the divorce to pay their reasonable living expenses. In determining how much property is sufficient to pay for a spouse’s reasonable living expenses, the Court of Appeals concluded it would include a determination of whether the property awarded to a spouse would produce monthly income, like an investment account, or could be converted into a form that would produce income, such as selling a non-income producing asset (i.e., a piece of land) to turn it into an income-producing asset.
In performing this evaluation, the Arizona Court of Appeals said a divorce court judge should consider how much money a spouse will earn from those income-producing assets but only to the extent the spouse seeking spousal support does not end up consuming all of those assets during his or her lifetime. In other words, a spouse seeking spousal support should not have to spend all their assets simply to support themselves during their entire lifetime.
In other words, a spouse may be eligible for an award of spousal support if the only way they will be able to financially support themselves in the future would be to sell all of their assets to live.
An Employed Spouse May Still be Entitled to Spousal Support in Arizona
The Court of Appeals stated that a spouse who is able to be self-sufficient through employment may still be eligible for an award of spousal support in Arizona if he or she lacks sufficient income-producing assets to contribute to their support in the future.
In this case, the wife received $36,000 in cash and other assets in the divorce. The Court of Appeals stated the divorce judge must evaluate whether that $36,000 in cash and other assets is enough to independently support the wife’s reasonable living expenses over the remainder of the wife’s lifetime.
Furthermore, the Arizona Court of Appeals stated that the fact that the wife had “far more liquid assets than the average American” had no impact on whether it was enough assets to permit a divorce judge to deny the wife’s request for spousal support in this divorce.
The Arizona Court of Appeals also stated that the divorce judge failed to decide the actual value of property awarded to the wife, whether the wife would have used up those assets during her lifetime to pay her reasonable living expenses, and failed to determine how much income the wife needed to pay her reasonable living expenses over her lifetime.
As a result, the Court of Appeals had no way of determining whether the divorce judge was right or wrong in denying the wife spousal support in this divorce case.
The Court of Appeals Remands the Case Back to the Divorce Judge for Further Consideration
The Court of Appeals, therefore, determined the family court must make a determination of whether the wife’s property could provide for her reasonable needs without being exhausted during her lifetime before it decides whether to grant or deny her request for spousal support from her husband.
In doing so, the family court is to evaluate the property and determine whether a spouse is eligible for an award. If the court determines the spouse is eligible, it must then consider the relevant factors, balance the equities between the parties, and exercise its discretion as it deems just to determine the amount and duration of any spousal support award in Arizona.
The Arizona Court of Appeals ruled the family court failed to properly determine whether the wife was entitled to an award of spousal maintenance based on the property awarded to her in the divorce.
If you have questions about community property and spousal support in Arizona, you should seriously consider contacting the attorneys at Hildebrand Law, PC. Our Arizona spousal maintenance and family law attorneys have over 100 years of combined experience successfully representing clients in spousal maintenance and family law cases.
Our family law firm has earned numerous awards such as US News and World Reports Best Arizona Family Law Firm, US News and World Report Best Divorce Attorneys, “Best of the Valley” by Arizona Foothills readers, and “Best Arizona Divorce Law Firms” by North Scottsdale Magazine.
Call us today at (480)305-8300 or reach out to us through our appointment scheduling form to schedule your personalized consultation and turn your spousal maintenance or family law case around today.
Arizona Family Law Attorneys in Scottsdale and Tucson Arizona
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Chris Hildebrand wrote the information on this page about community property and spousal support in Arizona to ensure everyone has access to information about alimony and spousal maintenance laws in Arizona. Chris is a divorce attorney at Hildebrand Law, PC. He has over 24 years of Arizona family law experience and has received multiple awards, including US News and World Report “Top Arizona Divorce Attorneys”, Phoenix Magazine “Top Divorce Law Firms”, and Arizona Foothills Magazine “Best of the Valley” award. He believes the policies and procedures he uses to get his clients through a divorce should all be guided by the principles of honesty, integrity, and actually caring about what his clients are going through in a divorce.