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 How to Divide Property When Getting a Divorce in Arizona

Property division can become challenging for divorcing couples. However, this need not be a challenge.  And If you and the soon-to-be-ex cannot come to good terms on your own, a court will have to do it for you. Under Arizona’s community property law, debts and assets accumulated during a marriage belong to both parties 50/50 in the absence of a prenuptial or postnuptial agreement that says otherwise.  Arizonian family courts emphasize fairness when dividing up a property. Unlike in some states, the property may not be divided equally 50/50, but equitably in the eyes of the judge assigned to your case.  This can sometimes mean 55/45 or 60/40 or 40/60—every case is unique.

No matter what the facts, you will have to hire a talented divorce attorney in Scottsdale, Phoenix or your local area in the state. Absent years of litigation experience, you likely won’t be able to capably represent your interests in court without a deep knowledge of divorce and property laws in the state. If you are undergoing a process of dividing property in a divorce, here are some important items you should be aware of:

Determine if the Property Belongs to the Community or the Separate Category

There is a very clear distinction between community and separate property under Arizona law. Separate property is assets a spouse owned before marriage, inherited solely during the marriage, was gifted solely during the marriage, or purchased alone during the marriage with sole and separate finances. A prenuptial or postnuptial contract may also designate that certain items are to be treated as separate property.  Absent these facts, the law presumes all property and all debt, acquired or originated during the marriage, is community property.

Courts in Arizona only have jurisdiction over community property, not either spouse’s sole and separate property. Each party will have to provide evidence for separate property claims in the form of financial documents. It is possible that property that was originally separate later becomes community property during the marriage. For example, a house purchased by one spouse before marriage may become community property following the marriage if both spouses names are later placed on the recorded deed.

The reason that each is different is that the distinction between community and separate property during the marriage can be blurry. Some spouses may have unknowingly turned separate assets into community property by the “commingling” process, where two assets are combined. A bank account owned by one spouse before marriage becomes marital property if the other spouse makes deposits to it later with community income. Sometimes assets are partially community and partially separate, such as houses and retirement accounts. A business that one spouse operated but later received contributions from the other spouse after marriage can fall into this category.   A seasoned lawyer can walk you through these issues, and advance them in a court of law.

Set Values for Property

Regardless of whether community or separate property, all assets and debts must be assigned a monetary value before equitable division. The two spouses can do this themselves, or a court can do it in case the parties cannot agree on values. Typically appraisals are used to set values of real assets, like houses, antiques, or vehicles. The toughest asset to value can sometimes be retirement accounts.  You may have to hire a financial professional like an actuary to ascertain the value of a retirement account and the growth in value of such retirement assets since the original marriage date.

The Process of Dividing Property

You can see the first section above that determining whether a property is community or separate can be complicated. Ideally, both parties come to an agreement out of court. But this rarely happens when multiple assets are in question and the stakes involve hundreds of thousands of dollars or more.

Courts may divide up property in multiple ways. In the case of property that is partially separate, the court may offer a spouse the option of buying out the remaining portion from the other. In some cases, it may be recommended to mutually sell the assets and divide the proceeds. Some property, like family homes, can be co-owned even following a divorce if children are living there or visiting each year.

Arizona courts typically divide property approximately equally among the divorcing partners. There are only a handful of exceptions to the rule. For example, if one spouse is known to have squandered money through irresponsible activities like gambling or drug use, the court may rule in favor of the other. In the case of property under massive debt, the court may rule against the spouse responsible for the debt.  At the end of the day, you will need the guidance and stewardship of experienced legal counsel to navigate these issues for you.

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