Within the occasion of a dissolution of marriage the place there isn’t a prenuptial or postnuptial settlement, consider that divorce as dividing up a enterprise.
Have you learnt why the marriage band is positioned on the fourth finger? The speculation is that the fourth finger is the one finger with a vein related to the guts. In an analogous vein of sentiment, motion pictures and tv, explicit spiritual dogmas and, frankly, simply the overall impression that we’re given of marriage as we develop, counsel that there’s an intrinsic and religious part to marriage that transcends mere legal guidelines. Nonetheless, these grandiloquent notions infrequently discover their methods right into a courtroom the place a choose is deciding how one can dissolve two peoples’ marriage.
Not too long ago, my regulation companion, Zachary Markham, wrote an article in Flagstaff Enterprise Information discussing the deserves of coming into a prenuptial settlement previous to marriage. Markham appropriately and aptly likened a prenuptial settlement to “marriage insurance coverage.” Nonetheless, in my follow I might roughly estimate that lower than 5% of circumstances have a prenuptial settlement. I perceive why, regardless of probably realizing higher, one doesn’t even need to contemplate a prenuptial settlement. In spite of everything, my spouse gently and lovingly suggested me that she would “kick my butt” if I requested her to signal a prenuptial settlement previous to our marriage practically a decade in the past. As such, this text focuses on taking a look at marriage usually as a enterprise or a contract, as a result of that’s how Arizona regulation and the courts view it.
Arizona is a neighborhood property state. In easy phrases, this implies as soon as two folks get married, they’re considered by the regulation as contractually certain to be one and the identical for monetary functions (barring a couple of nuanced exceptions, that are more likely to be litigated). In different phrases, the flowery promise of “for richer or for poorer” in actuality interprets to “now we have began our personal enterprise the place we’re each equally going to be financially benefiting but in addition financially liable.”
Whereas the above paragraph could appear comparatively apparent and easy, in follow, it’s not. I repeatedly have discussions with my purchasers the place I have to advise them, they’re on the proverbial hook for his or her partner’s poor monetary decisions. Equally, I routinely have conversations with my purchasers the place I clarify that their particular person enterprise ventures (and the hard-earned successes that include it) fall right into a bucket that, upon divorce, might be equitably (typically equally) shared with their soon-to-be ex-spouse. This will make an already aggravating and emotional scenario worse. As well as, attorneys are confined by relevant legal guidelines and moral restrictions and due to this fact don’t possess the magical, sweeping skill to supply a passable lead to each case regardless of their finest efforts. Lastly, Arizona is a “no-fault” state, which implies that an Arizona Court docket is not going to contemplate why two events are divorcing (e.g. infidelity) however as an alternative begin with the truth that they’re and can preclude both social gathering from explaining why in most circumstances.
As such, dissolving a wedding typically works the identical as dividing an organization’s enterprise belongings. I liken the division of my consumer’s neighborhood property (which can embody liquid funds, investments, actual property, entire life insurances, pensions, 401Ks, and precise companies) to dividing a pizza pie. Allow us to assume that there are eight slices to a neighborhood’s “pizza.” Now, on condition that Arizona regulation requires an equitable division of that pizza, it’s a close to certainty that neither social gathering walks away with all the pizza (and neither social gathering can ever stroll away with greater than the eight slices). When two events rent attorneys and litigate, typically every social gathering’s legal professional will get a slice – leaving the neighborhood with six slices to divide. It’s troublesome for an individual going by means of divorce to stroll away with simply three slices; although, arguably, that could be a “truthful” consequence beneath the regulation. Additional, the slices could also be of unequal dimension or each events might want the identical slice (which I assume have to be pepperoni, versus a slice with pineapple on it). As one can think about, this complicates negotiations.
The proactive strategy to head off attainable points upon dissolving a wedding – or, put otherwise, to pre-determine which social gathering would get which pizza slice – is for the events to enter right into a postnuptial settlement, both previous to or upon acquiring an asset. These agreements are normally enforceable supplied they’re clearly drafted, and the phrases aren’t grossly unfair on the time of signing. A lawyer ought to draft the settlement and each side will want unbiased counsels upon signing. Such a doc might very effectively head off far costlier future litigation.
Within the occasion of a dissolution of marriage the place there isn’t a prenuptial or postnuptial settlement, consider that divorce as dividing up a enterprise (I’ll typically encourage my purchasers to placed on their “enterprise hats” when going into settlement discussions). The courtroom and attorneys will view it this fashion. It may be a chilly, dry course of that can not be extra totally different than the joyful course of of truly getting married.
Lastly, a dissolution of marriage might require dividing a enterprise that’s owned by the “neighborhood,” which marries the 2 rules mentioned on this article. In these conditions, I’ll generally carry on an legal professional who handles “enterprise divorces,” which, in my agency, is Jennifer Mott. I anticipate her writing an article on this very matter on this publication within the close to future. FBN
By Michael Wozniak
Michael Wozniak is a companion with the regulation agency Aspey, Watkins & Diesel the place he practices household regulation and legal protection. He moved to Flagstaff along with his household in 2019. He’s obtainable without spending a dime consultations to debate any household regulation problem and may be reached at 928-774-1478.