Arizona Community Property Laws

When a couple decides to end their marriage, they must decide how they will divide their property or request that a court divide it for them if they are unable to agree. Many married couples accumulate significant assets during their marriage, and the way that it is divided can have a substantial impact on each party’s financial well-being. For this reason, it is important for anyone going through a divorce to take the time to understand Arizona’s community property laws and to speak with an attorney familiar with representing people involved a contested divorce.

When dividing property in a divorce, the parties or a court needs to determine whether property is community property or separate property, determine the value of the property, and decide how to divide it.

Determining Separate Property and Community Property

There is a presumption under Arizona law that any assets or debts acquired during a marriage are community property, meaning property that is owned jointly by both parties. Property that was owned by one spouse prior to the marriage or is inherited or acquired as a gift is considered separate property. In addition, a party to a marriage can convert separate property to community property, and may actually do so unintentionally if he or she commingles separate property with marital property. Property may also be partially community and partially separate, a situation that often arises with retirement accounts or family-owned businesses.

Deciding What the Property is Worth

Either the spouses or the court will determine the value of the marital property. In some cases, it may be necessary to enlist the assistance of a professional appraiser for any real estate the couple owns as well as unique items such as artwork or antiques. In addition, certain assets like retirement accounts and family-owned businesses may need to be evaluated by a professional.

Dividing Marital Property

People who are getting divorced have various options available to them in terms of dividing their assets. For example, the spouses can assign certain pieces of property to one another, one spouse could pay the other one cash in order to “buy out” the other’s interest in the property, or they could sell the property and split the cash received. In some cases, a couple may continue to retain certain property if it makes sense and they are able to do so. This often occurs when a couple jointly owns a profitable business.

Generally speaking, courts will divide community property evenly between the spouses. In fact, Arizona law specifically prohibits courts to consider marital misconduct when dividing property. There are cases in which a court will award more than half of the community to one spouse however, including when the other spouse wasted community property on gambling or supporting a drug habit.

Finally, courts will also divide any marital debts between the spouses. Importantly, however, creditors are not required to recognize the debt allocation outlined in the divorce decree or separation agreement, so they may still pursue a jointly-incurred debt from either party.

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