Temporary Orders & Reimbursement Issues in Arizona Divorce Cases
Temporary Orders are Court orders regarding various issues pending the final trial or settlement. These are temporary in nature and are generally extinguished upon the final trial or settlement. If an agreement cannot be reached soon after the divorce is filed it is sometimes necessary to file a Petition for Temporary Orders to obtain interim Court orders dividing accounts, granting use of the community residence and to obtain orders regarding payment of community obligations. Temporary orders can also address parenting time, child support, spousal maintenance, temporary awards of attorney fees and costs and a myriad of other issues.
Generally, the community funds are divided equally during or at the end of a divorce. If one of the parties withdraws or transfers money out of such accounts during the divorce proceedings they may be in violation of the Court’s Preliminary Injunction and are usually ordered to pay the other party his or her share of such funds. Most of the time the parties will just agree to divide the funds in the community accounts equally. If a party uses community funds to pay community debts this is generally acceptable. The parties can also use community funds to pay their reasonable living expenses and attorney fees. It is always best to work out an agreement with the other party regarding the division and use of such funds before the parties start spending down the accounts without the other party’s knowledge or consent.
What Happens to the House?
Some people believe if they move out of the community residence that they abandon or forfeit any interests in the home. This is not correct. Moving out of the home during the divorce has no impact on your claim to an equal share of the community residence.
There may be reasons not to move out of the home such as the home being the children’s comfort zone. In addition, until there are any court orders, there is no guarantee that your spouse will be making the mortgage payments. These are things that should be worked out in writing in advance or addressed with the Court.
There are generally a few options that parties have with regard to the home. First, one of the parties can purchase the other party’s share of the equity. If there is a loan, the party keeping the house will generally need to refinance the mortgage to remove the other party (a quitclaim deed by itself does not accomplish this). Second, if no agreement is reached as to one party buying out the other party the Court will generally order that the home be sold. If the home is in both parties’ names, the sale proceeds are generally divided equally. Third, in some cases the parties may agree that one of the parties continue to live in the home until the children reach a certain age or graduate from high school after which the home is then sold and the proceeds are divided (the Court will generally not order this unless both parties agree).
Termination of the Community / Reimbursement Issues
Upon service of process of a petition for dissolution (divorce), the community is terminated. This means that each of your incomes going forward are separate property and each new debt that each of you incur is presumed to be your own separate debt. This is separate from child support and spousal maintenance issues. As a general rule both parties continue to be jointly liable for any community debt incurred up to the termination of the community.
There may be reimbursement issues that arise during the divorce proceedings. For example in some situations one of the parties during the divorce proceedings pays more toward community debts than the other party. In some cases, a party should be obligated to pay certain debts if they are receiving the exclusive benefit of the property that is associated with the debt (such as use of the marital home or automobiles). These can be complicated issues that should be discussed with a qualified divorce attorney.