Property Division in Arizona Divorce

Property Division in Colorado Divorce

In the dissolution of marriage in Arizona, all marital property and debt must be distributed between spouses. This is one of the most challenging aspects of divorce. Many divorcing spouses feel anxious about how property division will affect their finances, and it is not uncommon for them to be distrustful or even angry towards their former partner. This can turn an already-complex legal process into something contentious.

It’s important to be protected by a competent attorney during this part of your divorce. Your lawyer can help you understand Arizona’s property division process, ensure that your rights and assets are secured, and effectively represent you in a difficult dispute. Reach out to us at Goldman Law to see how we can help you during your marital property division.

How Is Property Divided In A Divorce In Arizona?

Divorcing couples in Arizona can decide whether they want to divide their property on their own through a property settlement, or have the court divide it for them. Either way, the property division process involves these three main steps:

  1. Determining which property and debts are marital, and which ones are separate
  2. Determining the value of the marital property (also known as community property)
  3. Distributing the marital property as deemed appropriate.

Only marital property is eligible for division. These are assets and debts that the couple acquired during their marriage. Separate property is a different matter. These are assets that a spouse already owned before getting married, acquired after a marriage ended, or received as a gift or inheritance. Separate property remains with the owner and will not be distributed during divorce.

Is Arizona A Community Property State?

Yes. A few states, including Arizona, have a “community property law” which states that both spouses own all property and debt acquired during a marriage. During divorce, this community property is typically divided equally between husband and wife.

Certain conditions can change this 50-50 distribution. For instance, if there is a valid prenuptial agreement in place outlining specific ways to divide the marital property, it can ‘override’ community property law. It is wise to talk to an attorney to ensure that your common property is divided fairly according to existing rules.

What Counts As Community Property In Arizona?

Houses and cars aren’t the only kind of marital property. It includes the following, if acquired during marriage:

  • Businesses
  • Work wages and other income
  • Bank accounts and savings
  • Retirement accounts or 401(k) plans
  • IRAs and pensions
  • Ownership interests
  • Investments
  • Dividends
  • Real estate or raw land
  • Art
  • Furniture
  • Valuable items (jewelry, antiques, rare collectibles, etc.).

Likewise, any debt incurred during marriage is considered communal and divisible between the spouses, even if it benefitted only one of them. For example, if one spouse bought hobby tools on credit, that debt is shared between the couple even if the other spouse has no use for the purchased items.

What About Debt Incurred Before Marriage?

As with property, only debt incurred while married is divisible. If either spouse already owed a debt before getting married, it will remain a separate debt and will not be shared by the other spouse.

Frequently Asked Questions On Arizona Property Division

Who gets the house in a divorce in Arizona?

This is a major concern for many divorcing couples, since the family home is both an emotional and financial investment. The answer first hinges on whether the house is marital property. If it was acquired over the course of the marriage, it is considered marital property and eligible for division. But if one spouse already owned it before the wedding, and the rest of the family simply moved in, the ownership will remain with that spouse.

How can a marital home be ‘divided’? There are a few choices. One is to sell the house and split the sale between the spouses. If they do not agree to sell, they may decide to give the property to one spouse while the other gets a different property of equal value. Talking to a family law attorney would be helpful in deciding the best thing to do about your marital home.

Who gets to pay the mortgage on the marital home?

A general rule of thumb is that upon property division, the spouse who gets possession of the house is responsible for its accompanying payments such as mortgage and utilities.

Complications may arise if, for instance, the mortgage is signed by both spouses. While the spouse who now owns the property gets the mortgage obligation, the bank could still involve the other spouse if payments fail. Non-owning spouses are usually advised to get the loan refinanced solely under the name of the owning spouse.

Is inheritance considered community property in Arizona?

Generally, no. A spouse’s inheritance is usually considered separate property and is thus ineligible for division.

It is possible, though, to turn it into community property while still married. For instance, you may have used some of your inheritance money to supplement your communal money when purchasing your marital home. This is called commingling. If you are concerned that your inheritance has been commingled with community property, it is crucial that you talk to a lawyer.

Is a 401(k) counted as community property in Arizona?

Again, this primarily depends on whether the account was started before or during marriage. If you opened a 401(k) and accrued funds in it before getting married, those funds are your separate property. If the account was opened during marriage, it is community property and eligible for distribution.

While Arizona law works toward a 50-50 division, there are cases where the court uses its discretion to change the spouses’ shares. 401(k) funds, for example, may be divided unequally if one spouse had excessive expenditures resulting in waste.

Contact Goldman Law

Protecting your assets and finances is a major priority during divorce. You’ll need a lawyer who is skillful in setting up legal strategies for you. At the very least, you must have a firm grasp of your rights and of what is happening to your hard-earned property during the process.

The trusted lawyers at Goldman Law are ready to help. Ask us about your concerns and consult with us regarding divorce representation. Call our Phoenix, Arizona office at (602) 732-3098.