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Phoenix AZ Family Law Blog

Thursday, June 23, 2016

Dividing Property in an Arizona divorce

Is Arizona a community property state?

Going through a divorce can be a difficult process that raises emotional and financial challenges. These can become even more trying if the divorcing spouses cannot come to an agreement on the main issues that must be resolved, particularly the division of property.

What is community property?

For all intents and purposes, under Arizona law all the assets and debts acquired by a married couple from the date of marriage until the date of service of divorce paperwork are presumed to be community property, and each spouse is generally entitled to one half.  Technically, the court is not required to divide property equally, instead the court is required to divide the property "equitably" or fairly under the circumstances.  Even so, an unequal division is rare.   Property or debt brought into the marriage by one of the spouses or received during the marriage by gift or inheritance is the sole and separate property of that spouse so long as it is maintained separately.  

While this seems relatively straightforward, distinguishing community from separate property can be complicated. In some cases, separate property can be converted into community property such as when the sole owner of a home changes the title to community property.  The community could obtain an interest in the sole and separate property of one of the spouses if mortgage payments or improvements are made from community funds.  Moreover, separate assets that are commingled can become community property. For example, if both spouses make deposits to a pre-marital bank account, it could become community property. Lastly, certain assets may be partially community and separate property, such as a retirement account that one spouse contributed to before and after the marriage.

How Marital Property is Divided

There are a number of ways for assets to be divided. The spouses can agree to assign certain assets to each other, or buy out the other's share. They can also sell the assets and divide the proceeds. In addition, all debts incurred, including mortgages, car loans and credit cards, must be assigned to one of the spouses, and all the marital debts should ideally be paid off once the divorce becomes final.

Although the classification of property occurs automatically once a couple is married, they are not required to follow the community property laws if they have entered into a pre-marital or post marital agreement which provide that each spouse will maintain their assets separately. Also, there are a exceptions under Arizona law requiring community property to be divided equally, such as when the behavior of one of the spouses (e.g. drug use or gambling) wastes the community property. In the final analysis, because dividing property can become complicated, you are well-advised to engage the services of Cohen Family Law in Arizona.  Call out office today at 602-714-8898.


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