Divorce can be a difficult and confusing ordeal, often influenced by emotion.
However, there are some very practical things to do that can help when
trying to divide a marital estate.
Is either party going to declare bankruptcy? Will either party buyout real
property from the other? Is there realistically any equity in the home
in this economy or is it “upside down?” Is there a business
shared by both parties and how will it be divided? How will retirement
savings be divided? What about shared debts?
These are heady questions that not everyone can resolve on their own.
The team of attorneys at Warnock, MacKinlay & Carman have varied areas
of experience and often collaborate on divorce cases.
“It’s a team approach,” said Andre Carman, whose practice
includes tax, bankruptcy and business law.
Family law attorney Stacie Robb works with Carman and will often use him
as a resource when it comes to financial issues in a divorce case.
“It’s always good to be able to consult with a tax or bankruptcy
attorney,” Robb said. “Sometimes it may be my client who is
considering bankruptcy, and sometimes it may be their soon-to-be ex-spouse
that is considering bankruptcy. Either way, we need to understand the
ramifications and weigh the risks.”
When the parties are contemplating filing bankruptcy, Robb usually recommends
trying to get either party to declare bankruptcy prior to the divorce.
If the bankruptcy is handled first there is usually less uncertainty about
which of the assets and debts still exist for division and how the divorce
settlement can be changed. There are questions about which debts can be
discharged and which debts cannot be discharged with a bankruptcy. It’s
important to compare how a bankruptcy could affect property buyout versus
spousal support, she said.
And having a colleague that can collaborate in these areas of expertise
can be invaluable, Robb says.
Carman, who holds a Master of Laws in Taxation in addition to his law degree,
is one of only a handful attorneys in Arizona that prepares Qualified
Domestic Relations Orders , which is a tax-qualified order to divide retirement
benefits between spouses.
Robb and Carman agree that the most important thing for anyone who is considering
entering into divorce proceedings is to get a full and overall picture
of all finances while they are still married. Getting records of all bank
accounts, credit card statements and any other creditor accounts (mortgages,
government taxes, etc.), while they are still readily accessible can save
time and money. Trying to track down these records after the fact can
be time consuming and expensive, they say.
A few misconceptions that Robb and Carman have encountered with their clientele
include, during divorce proceedings (even if the proceedings are lengthy)
neither party is legally required to leave the family home if the home
is a marital asset, Robb said.
Also, even if a court divorce decree allocates responsibilities for debts
between the parties, that allocation does not prevent creditors, including
taxing authorities like the IRS, from collecting debts from either or
both parties (without regard to the divorce decree allocation), Carman said.
For more information about how bankruptcy can affect a divorce settlement,
please call Warnock, MacKinlay & Carman, PLLC, at (928) 445-8056,
or stop by their historic offices at 246 S. Cortez St. in downtown Prescott.