Archive for June, 2011

Arizona Attorney Discusses Division of Retirement Accounts in Divorce Cases, and Converting Retirement Accounts to Cashflow

Wednesday, June 29th, 2011

Generally, in divorces in Arizona, the assets and debts are equitably (fairly) divided, which is generally equally divided. For some people, it may be advantageous to receive the retirement accounts, while other people may be frustrated with retirement accounts because they often have a 10% penalty for withdrawals that start before that person turns 59 ½ years old.

In a recent online article, located at lifemanagement.com, a discussion is held regarding creative ways to use larger retirement accounts to provide cash flow before a party reaches age 59 ½. This is a complex strategy, and before using such a strategy, divorcing parties should make sure to talk this over with both and experienced accountant and an experienced family law attorney.

Under this strategy, with specific IRS restrictions, a party can receive a stream of periodic (usually monthly) income from a retirement account after the divorce for five years or such longer time until the party reaches age 59 ½. If this is properly set up, the 10% penalty for early withdrawal can be avoided. The receiving spouse would still pay income taxes on the periodic income, just as he or she would if receiving spousal support. However, avoiding the 10% penalty will make a significant difference in the value of this periodic income stream.

To learn more about strategies for dividing retirement accounts, or to discuss other family law issues with an experienced family law attorney, contact Douglas C. Gardner, with McGuire Gardner, a division of Davis Miles PLLC, at 800-899-2730, or visit our website at yourarizonadivorcelawyer.com.

Arizona Lawyer Discusses Changes to Child Support Guidelines in Arizona Effective June 1, 2011

Monday, June 6th, 2011

Effective June 1, 2011, child support in Arizona has been changed with the implementation of the new Arizona Supreme Court Child Support Guidelines. While much has stayed the same from the 2005 version used until recently, there have been several important changes that will affect many people paying or receiving child support.

The Self Support Reserve has been raised to $903, meaning after paying child support a parent must be left with at least $903 remaining from their income or attributed income, or the Court must lower their child support.

Claiming the children for federal and state tax deductions is now to be divided proportionally between the parties based upon the proportion of income, with clarification as to the rounding. This may allow a modification of child support that would increase or decrease the number of children that either parent can claim in a given tax year.

These new changes make it so that the 2011 changes are effective for cases in which the child support order is entered after June 1, 2011. Prior changes were only effective for cases filed after a certain date. This will cause cases that are currently pending to proceed under the modified child support amounts.

Finally, in general, the child support amounts have risen. For families with one or two children, the increase is not as significant, but for families with greater numbers of children, the increase in support can be substantial.

To learn more about these changes, or to discuss modifying or establishing child support in your case, please contact one of the experienced family law attorneys with McGuire Gardner, a division of Davis Miles PLLC, by calling 800-899-2730 or learn more by visiting our website at yourarizonadivorcelawyer.com.