One of the most disputed aspects of divorce is the division of marital property. This is even more challenging in Arizona, which is one of the few ‘community property states’ in the US. What does this mean for divorcing spouses? Who gets what in an Arizona divorce? Here is a brief overview of Arizona marital property law.
What Is A Community Property State?
In terms of property division, most US states follow ‘common law,’ which generally means that any property bought under one spouse’s name is owned by that spouse only. Assets acquired under both spouses’ names are the ones that belong to both of them. During divorce proceedings, the judge will determine an “equitable distribution” – that is, a fair but not necessarily equal division of property based on many factors like each spouse’s income and financial needs.
By contrast, a few states follow a ‘community property law,’ saying that all property acquired by either spouse during marriage is community property (also known as marital property).
Arizona is a community property state. When a couple decides to divorce here, their marital assets will likely be divided equally between each spouse, regardless of who bought what. There are a few exceptions to this 50-50 division, such as if the couple has a valid prenuptial agreement outlining how their marital property should be distributed.
What Is Considered Community Property In Arizona?
Arizona Revised Statutes, Title 25, Chapter 2, Article 2, Section 25-211 states that all property acquired during marriage is considered community property in Arizona, except those that were:
- Acquired as an inheritance or a gift
- Acquired after service of divorce petition, annulment petition, or legal separation petition (but only if the petition results in a decree).
Section 25-213 additionally states that the following are considered separate property of each spouse, not community property:
- A spouse’s real and personal property owned before marriage
- A spouse’s profits from their own property (e.g. rent, increase in value, etc).
Apart from the above exceptions, the spouses’ assets during marriage will likely be divided as community property. These may include real property, vehicles, businesses, wages and other income, bank accounts, retirement accounts/401(k) plans, business interests and investments, art, furniture, and other valuable items.
Likewise, debts may be considered marital property (shared) if they were incurred during marriage. Debts incurred by one spouse before marriage will remain a separate debt of that spouse and will not be shared after divorce.
Is Inherited Money Community Property In Arizona?
Generally, no. An inheritance remains separate property of the spouse that inherits it. However, it is possible that an inheritance or other separate assets becomes mixed or “comingled” with community property. For example, a spouse may have used some of their inheritance money to help purchase the marital home. Or they may have deposited their inheritance money in their joint bank account.
When comingling happens, it becomes difficult to establish which part is separate property. This often results in the separate property being absorbed into the community property and thus eligible for division during divorce. In other words, a spouse could lose their separate property by comingling.
There are many complications that arise during divorce property division. These, combined with the often-contentious relationship between divorcing spouses, can result in some unexpected and undesired division outcomes. To protect your assets in this puzzling process, get the help of our experienced Arizona divorce attorneys at Goldman Law. Call us today at (602) 698-5520.