Arizona Appellate Court issues new ruling -- case of first impression, i.e., to what extent can a marital community claim an equitable lien against a spouse’s sole and separate property when community funds have contributed to the equity in the property and declining market conditions have nonetheless reduced the property’s overall value?

The Court of Appeals held that community contributions to sole and separate property create equitable lien rights even in a declining market, and define below the method by which the value of the lien should be calculated.

Click here for the Opinion.  Further analysis to follow in subsequent blog entry.

WedLock is a new type of casualty insurance that gives the unhappily married policyholder a payout after he or she is unhitched. It costs about $16 a month for every $1,250 of coverage. But to discourage people from signing up just prior to their divorce, policyholders must ante up for four years before the policy will pay out. It adds a premium of $250 per unit for every year the marriage survives beyond four. So if a policyholder who bought 10 units got divorced after 10 years, he or she would have handed over $19,188 and would receive a payout of $27,500. It's probably not worth getting divorced for, but the lump sum might salve some wounds, whether through lawyers, vacations or subscriptions to the Rhapsody Book Club.

The idea bubbled up, as so many do, from the bottom of a financial pit. After John Logan watched his wealth follow his marriage down the drain, the Kernersville, N.C., entrepreneur figured there must be a market for those who want to hedge their marital bets. He won't reveal how many policies he's sold since the Aug. 5 launch of WedLockDivorceInsurance.com. But he's surprised at how much insurance his customers are buying: some of the premiums are more than $1,000 a month.
(Comment on this story.)
 

Not everybody thinks divorce insurance is prudent. "The best insurance against a painful, financially devastating divorce is to find a way to be happy in your marriage," says relationship coach Mimi Daniel. "Divorce insurance implies from the beginning that divorce is already an option."

On the other hand, unless you're Elin Nordegren, few things are as impoverishing as ending a marriage. Logan, who is recently engaged and, yes, is buying policies for himself and his betrothed, expects WedLock will become part of prenuptial agreements or be purchased for a bride or groom by relatives concerned about their loved one's choice of loved one. "Mom or Dad could buy this for their son or daughter without them knowing about it," he suggests. But the bride or groom has to be the beneficiary. Sorry, scheming mother-in-law, no windfall for you.

This article originally appeared in the Sept. 13, 2010, issue of TIME magazine.

Arizona Rule of Family Law Procedure 43(d)(6) now authorizes the Court, upon filing of a Family Court petition, to limit access to all court documents, records and evidence related to the petition for forty-five (45) days.

As a result, a new Administrative Order, No. 2010-092 has been issued which states: "all court documents, records and evidence in any Family Court action commenced with a Family Court case number not in existence before July 1, 2010 will be unavailable to the general public and will be accessible only by judicial officers, court and clerk’s office personnel, case parties and their associated attorneys of record, and law enforcement in the exercise of their official duties until forty-five (45) days have passed since filing the petition."
 

For further information on Arizona divorce and family law matters, contact Nirenstein Garnice Soderquist, PLC.

In Davies v. Beres, FC 2007-091006, Husband appealed the decision of the family court which concluded that post-dissolution military Temporary Disability Retired List (TDRL) benefits were partially community property, subject to apportionment. The Court of Appeals, Division One, concluded that TDRL benefits are the separate property of the disabled spouse. In this case, Husband and Wife were married approximately 11 years. During the marriage, Husband served in the United States Air Force, accumulating 121 months of service.

Husband maintained Wife had no interest in his TDRL benefits because he was ineligible for retirement for longevity, he was not retired and his status on TDRL was temporary. Wife believed she was entitled to a percentage of the TDRL benefits based on the fixed formula in the divorce Decree. The Court of Appeals found:

Although neither Williamson nor Thomas addresses the
first formula available to calculate TDRL benefits, we find the
cases persuasive. Both cases concluded the USFSPA, 10 U.S.C. §
1408(a)(4)(C), prevented their respective courts from dividing
TDRL benefits as marital property when the benefits were
21 calculated based upon percentage of disability. Williamson, 205
P.3d at 542; Thomas, 286 S.W.3d at 666. We agree with that
conclusion. To the extent Husband’s TDRL benefits could have
been calculated pursuant to the first formula, we decline to
find such benefits constitute community property for the reasons
previously explained. Accordingly, we vacate the family court’s
order awarding Wife an interest in Husband’s TDRL benefits.

For more information on Arizona community propertly law see ourwebsite.