You Owe Me! Or Not!
Jack Scharff, Editor, The Divorce Resource, speaks with
Dorian Eden, Lawyer at Scott David Stewart PLLC
For the taped audio interview, click here.

If you are involved in a divorce, spousal support may be involved. In any dissolution, the financial future of both spouses is of critical concern. Spouses are usually at opposite ends of this discussion — the one paying feels put upon, the one receiving usually doesn’t think he or she is getting enough.

Recently, The Divorce Resource spoke on this topic with Dorian L. Eden, an attorney and shareholder at Tiffany and Bosco, a full-service law firm in Phoenix, Ariz. Dori’s practice consists of family law, personal injury and probate administration and litigation.

This first in a series of four posts provides information that you need to know.

The Divorce Resource: What is spousal support?

Dorian L. Eden: In Arizona, we refer to it as “Spousal Maintenance.” Many people know it as alimony; that’s what many other states call it. Arizona calls it spousal maintenance because it is not intended as a punishment or a “forever” payment. The purpose of spousal maintenance is to get the lesser-earning spouse to a point where he or she can be self-sufficient.

And, there’s a variety of methods that the courts consider: For example, one may need additional schooling, some sort of certification or training, or simply enough time in the workforce to build up to a point of self-sufficiency. That’s the whole purpose of spousal maintenance in Arizona.

TDR: Suppose the lesser-earning spouse was the reason for the divorce, does that change things?

Eden: Arizona has what is considered no-fault divorce, which is why we call it “dissolution of marriage.” A “divorce” intimates that some sort of fault is involved. Because we have these no-fault dissolutions of marriage, the court is not supposed to take into consideration why someone gets a divorce. Was there some sort of adultery, physical abuse, abandonment? The court does not consider those issues.

Now, in very specific circumstances that may be different, but in the vast majority of cases, it never comes up. Obviously, emotionally it’s very different for people, but from the legal standpoint, the judge doesn’t take the reason for dissolution of marriage into consideration in most cases.

It does not matter if one person caused the reason for the parties to dissolve their marriage. All that matters is that one person needs assistance (usually short-term, but sometimes extending to a long-term basis) to reach self-sufficiency.

Historically speaking, the female parties received help because they had lower-paying jobs, less opportunity for higher wage-earning positions, or they stayed home to take care of children.

But now, things are changing as the world is changing. Spousal maintenance requests for men as the recipient are becoming much more common.

The economic downturn is pushing more couples heading to the alter to consider pre-nup agreements and other types of financial agreements should the honeymoon blow up. Have you taken precautions?

---

In an interview with the ConnectedIn Divorce Resource, Renee A. Hanson, Partner, Hanson, Ayala & Associates, talks about the number of irrevocable errors couples make during the divorce process. Some of them — not on good terms — think a good pit-bull lawyer is the best strategy to win a golden settlement. But errors can occur when the financial planner is left out the divorce process.

Hanson, a certified divorce financial analyst (CDFA) and a certified financial planner (CFP), explains what can yield a better outcome and how to make the best decisions during this emotional time.

Click here to read the complete article.

---

Hanson, Ayala & Associates, Private Wealth Advisor Renée Hanson, CFP®, CEP®, CDFA™, CFS, CRC brings over 25 years of knowledge and experience to her practice. Renée is one of nine National Franchise Advisory Council members, a board member for Private Wealth Advisors and a committee member for the CFP® board of standards ethics panel. Renée is married with three adult children and four grandchildren and she calls Arizona home. She enjoys her volunteer activities with Fresh Start Women’s Foundation and Girl Scouts of America. Renée has taken a keen interest in working with divorcing clients and their attorneys to develop the most equitable settlement. She is committed to helping her clients move through divorce with the least amount of “baggage.”

ConnectedIn Divorce Resource: What are some of the financial disasters to be aware of before going into the divorce process?

Renee Hanson: A big financial disaster is thinking a person can maintain his or her standard of living. Perhaps those going through a divorce get a large settlement and then start spending down that settlement to pay for their standard of living in the short-term. They need to take into account the adjustments needed for their long-term standard of living. If someone gets a settlement of $500,000 and spends it down over the next three years, what will that person do for the next 50 years? These are the questions we can help answer.

The settlement may seem like a great settlement, but people don’t understand how to manage a great settlement for longevity.

Another financial disaster is that once people are awarded spousal maintenance, they think it will never be modified. They continue to maintain their standard of living rather than learning to be financially independent from their ex-spouse.

The one who is paying may lose his or her job or become disabled or take a reduction in salary. The one paying the spousal maintenance can go back to court and say ‘I can no longer afford maintenance payments,’ and a judge can modify the payments.

The third error is not understanding the choices in front of them and making poor decisions, failing to understand the financial impact.

---

In an interview with the ConnectedIn Divorce Resource, Renee A. Hanson, Partner, Hanson, Ayala & Associates, talks about the number of irrevocable errors couples make during the divorce process. Some of them — not on good terms — think a good pit-bull lawyer is the best strategy to win a golden settlement. But errors can occur when the financial planner is left out the divorce process.

Hanson, a certified divorce financial analyst (CDFA) and a certified financial planner (CFP), explains what can yield a better outcome and how to make the best decisions during this emotional time.

Click here to read the complete article.

---

Hanson, Ayala & Associates, Private Wealth Advisor Renée Hanson, CFP®, CEP®, CDFA™, CFS, CRC brings over 25 years of knowledge and experience to her practice. Renée is one of nine National Franchise Advisory Council members, a board member for Private Wealth Advisors and a committee member for the CFP® board of standards ethics panel. Renée is married with three adult children and four grandchildren and she calls Arizona home. She enjoys her volunteer activities with Fresh Start Women’s Foundation and Girl Scouts of America. Renée has taken a keen interest in working with divorcing clients and their attorneys to develop the most equitable settlement. She is committed to helping her clients move through divorce with the least amount of “baggage.”

ConnectedIn Divorce Resource: Can you discuss how emotions play into negotiations?

Renee Hanson: Very rarely is each person at the same place emotionally. Divorce is a physical and an emotional process. And it’s not uncommon that one person has been thinking about divorce and has begun the emotional disconnect long before making an announcement that he or she wants a divorce. So the other spouse is left catching up, so to speak.

So sometimes the other spouse wants to get even. He or she goes into the compromise, feeling owed something or not ready to go through with the divorce and so the compromise doesn’t feel right. And so the attorneys, with the information from the financial analyst, can work together to understand the impact of the compromise.

CDR: How important is it to separate the emotions from the divorce process so each party can obtain a better outcome?

Hanson: This is a very emotional process, and you want to make fact-based decisions. Sometimes I tell my clients you are not in an emotional place to make those decisions so I want you to digest the information first. Sometimes that’s the best thing you can do — digest the information and then come back and make a decision.

---

In an interview with the ConnectedIn Divorce Resource, Renee A. Hanson, Partner, Hanson, Ayala & Associates, talks about the number of irrevocable errors couples make during the divorce process. Some of them — not on good terms — think a good pit-bull lawyer is the best strategy to win a golden settlement. But errors can occur when the financial planner is left out the divorce process.

Hanson, a certified divorce financial analyst (CDFA) and a certified financial planner (CFP), explains what can yield a better outcome and how to make the best decisions during this emotional time.

Click here to read the complete article.

---

Hanson, Ayala & Associates, Private Wealth Advisor Renée Hanson, CFP®, CEP®, CDFA™, CFS, CRC brings over 25 years of knowledge and experience to her practice. Renée is one of nine National Franchise Advisory Council members, a board member for Private Wealth Advisors and a committee member for the CFP® board of standards ethics panel. Renée is married with three adult children and four grandchildren and she calls Arizona home. She enjoys her volunteer activities with Fresh Start Women’s Foundation and Girl Scouts of America. Renée has taken a keen interest in working with divorcing clients and their attorneys to develop the most equitable settlement. She is committed to helping her clients move through divorce with the least amount of “baggage.”

ConnectedIn Divorce Resource: Are you seeing trends in this economy where more people are choosing mediation versus the traditional divorce process?

Renee Hanson: Mediation is often a solution prior to going to court. If an attorney advises clients to settle, mediation is often offered first. I see a trend of people saying I will go to mediation first. The sad part is that they think they can go to mediation without an attorney. I don’t necessarily agree that it’s the right solution. A mediator will bring both parties to a compromise. But if the parties don’t understand their legal rights or the financial information and the impact of it, it’s difficult for them to come to a comfortable comprise.

---

In an interview with the ConnectedIn Divorce Resource, Renee A. Hanson, Partner, Hanson, Ayala & Associates, talks about the number of irrevocable errors couples make during the divorce process. Some of them — not on good terms — think a good pit-bull lawyer is the best strategy to win a golden settlement. But errors can occur when the financial planner is left out the divorce process.

Hanson, a certified divorce financial analyst (CDFA) and a certified financial planner (CFP), explains what can yield a better outcome and how to make the best decisions during this emotional time.

Click here to read the complete article.

---

Hanson, Ayala & Associates, Private Wealth Advisor Renée Hanson, CFP®, CEP®, CDFA™, CFS, CRC brings over 25 years of knowledge and experience to her practice. Renée is one of nine National Franchise Advisory Council members, a board member for Private Wealth Advisors and a committee member for the CFP® board of standards ethics panel. Renée is married with three adult children and four grandchildren and she calls Arizona home. She enjoys her volunteer activities with Fresh Start Women’s Foundation and Girl Scouts of America. Renée has taken a keen interest in working with divorcing clients and their attorneys to develop the most equitable settlement. She is committed to helping her clients move through divorce with the least amount of “baggage.”

ConnectedIn Divorce Resource: How effective is a team approach in a divorce and who is part of the team?

Renee Hanson: It’s important to have a cohesive team that begins with the attorney and the CDFA. The attorney’s responsibility is to offer legal advice and negotiate an equitable settlement. The financial advisor’s responsibility is to sort through the financial components and to provide data for the attorney and the client. There are several benefits of this. The attorney understands the law and the divorce process. Oftentimes, couples don’t want to get bogged down with whether someone gets the TV or not. The other thing a financial advisor can provide is a clear understanding of what the settlement means to the client. This valuable data allows the attorney to negotiate for the highest settlement for the client. It also helps the opposing client to better understand the basis of the request and the right solution.

So a cohesive team is very important. As a certified financial planner, my role is to help the client move though the divorce process with the least amount of baggage at the end, including financial and emotional baggage.

I can tell you in most divorces I’ve seen, both parties feel they’ve been taken advantage of somehow. In using a cohesive team, they are less apt to feel that way. They can learn to make rational, emotional decisions versus irrational, emotional decisions.

CDR: How often do you see this team approach? Is it relatively new, and are divorcing couples aware of this approach?

Hanson: Not as often as I would like. There are a couple of reasons why. Sometimes, the attorney feels a financial advisor can cause havoc. He or she could have had a poor experience with a financial advisor versus a positive experience with a CDFA and CFP. When people understand that the financial advisor’s role is to support the client and the attorney in the divorce process, I think that takes away some of the ego and posturing that sometimes happens in professional relationships and teams. So we don’t find it to be as common, but we are finding it is becoming more important. And once attorneys have more positive experiences, I think you will find more recommendations from attorneys.

CDR: So it sounds like there is a lot of pre-planning, and that is how the financial professional can help the lawyer and client. Right?

Hanson: Pre-planning is critical. As a client begins to work with a divorce financial analyst, the analyst can propose and present to the attorney factual data the attorney can get his or her arms around to begin to develop an offer.

---

In an interview with the ConnectedIn Divorce Resource, Renee A. Hanson, Partner, Hanson, Ayala & Associates, talks about the number of irrevocable errors couples make during the divorce process. Some of them — not on good terms — think a good pit-bull lawyer is the best strategy to win a golden settlement. But errors can occur when the financial planner is left out the divorce process.

Hanson, a certified divorce financial analyst (CDFA) and a certified financial planner (CFP), explains what can yield a better outcome and how to make the best decisions during this emotional time.

Click here to read the complete article.

---

Hanson, Ayala & Associates, Private Wealth Advisor Renée Hanson, CFP®, CEP®, CDFA™, CFS, CRC brings over 25 years of knowledge and experience to her practice. Renée is one of nine National Franchise Advisory Council members, a board member for Private Wealth Advisors and a committee member for the CFP® board of standards ethics panel. Renée is married with three adult children and four grandchildren and she calls Arizona home. She enjoys her volunteer activities with Fresh Start Women’s Foundation and Girl Scouts of America. Renée has taken a keen interest in working with divorcing clients and their attorneys to develop the most equitable settlement. She is committed to helping her clients move through divorce with the least amount of “baggage.”

ConnectedIn Divorce Resource: When you talk about these irrevocable mistakes, how important is it for each party to understand his or her individual rights?

Renee Hanson: When you look at the division of assets, most people, particularly in the community property states, think they will get half. But each half can look very different. If you slice an orange or apple in half, there are similarities, but you will not find those similarities in assets. So you might say, ‘You get half the house, and I get the other half. Which half will you live in?’

Let me give you an example: Let’s say you have $1 million in assets, $500,000 in a 401k and $500,000 in a house. Women, in particular, might want to nurture the family and say, ‘I’ll keep the house; you keep the 401k. The reality is that the house will cost money to maintain. Who will pay the utilities and other bills if you don’t have any other financial assets? One may say ‘there’is spousal maintenance,’ but this isn’t for a lifetime. Periodically, a serious injury may reduce or eliminate the spousal maintenance, for example, if someone becomes disabled.

Generally speaking, there is a time period put on spousal maintenance. So we try to help each person in the divorce to understand what the assets mean over the long term and how to get a fair and equitable distribution.

---

In an interview with the ConnectedIn Divorce Resource, Renee A. Hanson, Partner, Hanson, Ayala & Associates, talks about the number of irrevocable errors couples make during the divorce process. Some of them — not on good terms — think a good pit-bull lawyer is the best strategy to win a golden settlement. But errors can occur when the financial planner is left out the divorce process.

Hanson, a certified divorce financial analyst (CDFA) and a certified financial planner (CFP), explains what can yield a better outcome and how to make the best decisions during this emotional time.

Click here to read the complete article.

---

Hanson, Ayala & Associates, Private Wealth Advisor Renée Hanson, CFP®, CEP®, CDFA™, CFS, CRC brings over 25 years of knowledge and experience to her practice. Renée is one of nine National Franchise Advisory Council members, a board member for Private Wealth Advisors and a committee member for the CFP® board of standards ethics panel. Renée is married with three adult children and four grandchildren and she calls Arizona home. She enjoys her volunteer activities with Fresh Start Women’s Foundation and Girl Scouts of America. Renée has taken a keen interest in working with divorcing clients and their attorneys to develop the most equitable settlement. She is committed to helping her clients move through divorce with the least amount of “baggage.”

ConnectedIn Divorce Resource: What types of errors do people make during the divorce process?

Renee Hanson: One of the biggest things that we see is that a person going through a divorce may find he or she is short of cash to begin his or her new life. A little known fact is that people can take a distribution from their 401k plan. But if they are over 59-and-a-half years old, they can avoid a penalty. The penalty can be a very significant amount for someone looking to put a down payment on a house. People still have to pay the taxes; that you can’t avoid. You can’t go back and say, ‘Oh, I’m sorry, I forgot about this little rule, please take the money back.’ The distribution is one time. That’s it.

---

In an interview with the ConnectedIn Divorce Resource, Renee A. Hanson, Partner, Hanson, Ayala & Associates, talks about the number of irrevocable errors couples make during the divorce process. Some of them — not on good terms — think a good pit-bull lawyer is the best strategy to win a golden settlement. But errors can occur when the financial planner is left out the divorce process.

Hanson, a certified divorce financial analyst (CDFA) and a certified financial planner (CFP), explains what can yield a better outcome and how to make the best decisions during this emotional time.

Click here to read the complete article.

---

Hanson, Ayala & Associates, Private Wealth Advisor Renée Hanson, CFP®, CEP®, CDFA™, CFS, CRC brings over 25 years of knowledge and experience to her practice. Renée is one of nine National Franchise Advisory Council members, a board member for Private Wealth Advisors and a committee member for the CFP® board of standards ethics panel. Renée is married with three adult children and four grandchildren and she calls Arizona home. She enjoys her volunteer activities with Fresh Start Women’s Foundation and Girl Scouts of America. Renée has taken a keen interest in working with divorcing clients and their attorneys to develop the most equitable settlement. She is committed to helping her clients move through divorce with the least amount of “baggage.”

ConnectedIn Divorce Resource: What expertise do people need during the divorce process to avoid irrevocable errors?

Renee Hanson: The best resource in terms of financial planning is to use a CDFA and a CFP. Generally speaking, you don’t find [many] CDFAs who are also CFPs. But periodically it does happen. You want someone who is an expert in the field and who understands the process of financial planning and who can work in a team environment with attorneys to best lead clients through the divorce process. (A CDFA is certified divorce financial analyst and a CFP is a certified financial planner.)

CDR: Are these professionals difficult to find?

Hanson: A certified financial planner is not difficult to find, but a certified divorce financial analyst is [not as easy to find] but is becoming more readily available. Finding someone who is a divorce financial analyst and is actively participating in financial planning as a certified financial planner, there are fewer of those. Sometimes, you find one who specializes in one or the other area of expertise. But it’s important to find someone who has a background in both categories so you get the greatest values in terms of the advice you will receive.

---

In an interview with the ConnectedIn Divorce Resource, Renee A. Hanson, Partner, Hanson, Ayala & Associates, talks about the number of irrevocable errors couples make during the divorce process. Some of them — not on good terms — think a good pit-bull lawyer is the best strategy to win a golden settlement. But errors can occur when the financial planner is left out the divorce process.

Hanson, a certified divorce financial analyst (CDFA) and a certified financial planner (CFP), explains what can yield a better outcome and how to make the best decisions during this emotional time.

Click here to read the complete article.

---

Hanson, Ayala & Associates, Private Wealth Advisor Renée Hanson, CFP®, CEP®, CDFA™, CFS, CRC brings over 25 years of knowledge and experience to her practice. Renée is one of nine National Franchise Advisory Council members, a board member for Private Wealth Advisors and a committee member for the CFP® board of standards ethics panel. Renée is married with three adult children and four grandchildren and she calls Arizona home. She enjoys her volunteer activities with Fresh Start Women’s Foundation and Girl Scouts of America. Renée has taken a keen interest in working with divorcing clients and their attorneys to develop the most equitable settlement. She is committed to helping her clients move through divorce with the least amount of “baggage.”

New York, the only U.S. state that doesn’t allow no-fault divorces, is expected to pass this new law. But the change would make it easier for a wealthier spouse to end a marriage without providing fair compensation.

For the taped audio interview, click here.

Answers provided by Dorian L. Eden, an attorney and shareholder at Tiffany and Bosco, a full-service law firm in Phoenix, Ariz. Dori’s practice consists of family law, personal injury and probate administration and litigation. 

TDR: How does one apply for spousal maintenance?

Eden: There are a couple of different ways. The first is to just ask your spouse to provide some sort of assistance on a temporary or permanent basis. The spouse may agree or not. This often depends on how amicable the parties are and what situations they may be in.

If the parties are going through mediation (an attempt to reach resolution without a judge involved), then they are probably discussing whether or not spousal maintenance is in order.

Generally speaking, to apply for spousal maintenance, most people will file some sort of request with the court because that’s how you start a dissolution case. You may ask in your initial petition for dissolution of marriage for some sort of spousal maintenance. In some instances, after someone files the initial petition, either party may realize that he or she wants some type of spousal maintenance. That person can then file again with the court to ask for the maintenance.

There are many factors that determine if spousal maintenance is applicable and how long it’s in effect. It is not intended as a punishment or a “forever” payment. Some agreements are modifiable; others are not.

For the taped audio interview, click here.

Questions answered by Dorian L. Eden, an attorney and shareholder at Tiffany and Bosco, a full-service law firm in Phoenix, Ariz. Dori’s practice consists of family law, personal injury and probate administration and litigation. 

TDR: Can spousal maintenance terms be modified if one party has had some severe change in income or health?

It depends. In Arizona, after a trial in which a judge determines one party is entitled to spousal maintenance, yes it can be modifiable. But if the parties agree to make it non-modifiable in either amount or duration or both, then no one can ever modify it.

There’s a fairly recent Arizona Supreme Court case on this issue. After two parties entered into a non-modifiable spousal maintenance agreement, both in amount and duration, a few years after the marriage dissolution, the payer spouse became disabled. The payer went back to the trial court and said to the judge, “I need to reduce my spousal maintenance. I am now disabled and am receiving Social Security disability. I need to get some sort of modification to the agreement.”

The case went through the Arizona Trial Court, the Court of Appeals and, ultimately to the Arizona Supreme Court. The Arizona Supreme Court ruled that since the parties entered into an agreement termed non-modifiable, the agreement holds and cannot be modified.

There are reasons why parties want to make their spousal maintenance agreements modifiable and other reasons why parties want such agreements as non-modifiable. Spouses should explore all of the reasons in either situation before entering into a spousal maintenance agreement.

TDR: How many marriage dissolutions have some type of spousal maintenance granted?

Eden: It depends on a variety of situations. There are many cases where temporary support is granted until the dissolution is finalized. Then there are cases where support is granted during and after the dissolution. It’s such a fact-intensive question that it can only be best answered on a case-by-case basis.

For the taped audio interview, click here.

Answers provided by Dorian L. Eden, an attorney Scott David Stewart PLLC. Dori’s practice is focused only on family law.

TDR: What determines the amount granted?

Eden: That’s a great question, and one for which I don’t have a very good answer. The reason why is because the Arizona Legislature has set forth very specific factors that the court takes into consideration when deciding:

1. If someone is qualified to receive spousal maintenance.
2. If so, the amount and duration of spousal maintenance.

On various websites, one can find spousal maintenance guidelines available in Arizona. You plug in some numbers, and the site tells you in theory what spousal maintenance should be. If the courts would follow these guidelines, that would be great. But, in fact, the courts do not follow those guidelines.

There are specific opinions from the higher courts in Arizona, The Court of Appeals and the Arizona Supreme Court, saying that judges cannot just use those guidelines, but need go through a list of various factors to decide if a party is qualified to receive spousal maintenance and for how long.

To decide if a person is qualified to receive spousal maintenance, the court has to look at four things:

1. Does someone lack sufficient property to provide for his or her self, such as income-producing property that can generate enough income for the person to be self-sufficient?

If a person has a multi-million dollar estate that generates hundreds of thousands of dollars each year, then that person probably wouldn’t qualify for spousal maintenance. That vast majority of people are not in that situation, but they might have rental properties that generate income that the court will take into consideration.

2. Why is the person unable to be self-sufficient? Is it because he or she is the custodian of a young or disabled child, which requires that person to be with that child most of the time and, therefore, does not allow the person to go out and get a job?

3. Did the person contribute to the educational opportunities of the spouse, essentially putting his or her career on hold to better the other person?

4. What was the length of the marriage? Is the person seeking spousal maintenance of such an age that’s it not very likely that that person will be able to obtain employment to be self-sufficient?

If the court finds that the person qualifies under any one of the above four factors, then the court has to consider 13 other factors to decide how much and for how long. Some of the factors the court looks at are:

•  The standard of living.
•  The duration of the marriage.
•  The age of the requesting party.
•  The person’s employment history.
•  The ability of the person (from whom spousal maintenance is sought) to provide for the other person while providing for his or her own needs.
•  Did one spouse help the other spouse’s career to the detriment of his or her own career?
•  Did one party stay at home to take care of children?
•  Were there excessive or abnormal expenditures during the marriage?
•  Was someone hiding money?
•  What ability does each party have after the dissolution of the marriage to contribute to the future educational costs of the children?

There are many different things that the court looks at and considers. Generally speaking, the answer to the how much and how long question, is determined, in large part, by affidavits of financial information. Each party must complete one of these and basically list out all income and expenditures. Obviously, the more support and documentation one has for expenditures, the better that person’s chances. The court will look at these expenditures and decide if they are reasonable or not.

There’s no set number, and there’s no set timeline. If two different couples with the exact same financial circumstances were in front of two different judges for a trial, in all likelihood there would be two very different results in terms of spousal maintenance.

Jack Scharff, Editor, The Divorce Resource speaks with
Dorian Eden, Lawyer at Scott David Stewart PLLC

If you are involved in a divorce, spousal support may be involved. In any dissolution, the financial future of both spouses is of critical concern. Spouses are usually at opposite ends of this discussion — the one paying feels put upon, the one receiving usually doesn’t think he or she is getting enough.

Recently, The Divorce Resource spoke on this topic with Dorian L. Eden, an attorney and shareholder at Tiffany and Bosco, a full-service law firm in Phoenix, Ariz. Dori’s practice consists of family law, personal injury and probate administration and litigation.

Click on the arrow below for the taped interview …

Mandy has a great story in her blog, sincemydivorce. It’s about a woman who wants to be her own divorce attorney. Good move?