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Mar 29, 2023

Is Arizona a Community Property State?

In all states, property acquired during a marriage is considered marital property, and during a.

Is Arizona a Community Property State?

In all states, property acquired during a marriage is considered marital property, and during a divorce, it must be divided between the two parties. Different states follow different laws regarding how the division of property should take place. The majority of states in the nation follow equitable distribution laws that state property should be divided fairly and not necessarily equally. Nine states in the country follow community property laws that stipulate the division should be approximately 50/50. So, is Arizona a community property state? Our Arizona family lawyer explains the law below.

Is Arizona a Community Property State?

Although most states follow equitable distribution laws, Arizona is not one of them. Arizona does follow community property law, but the laws in The Grand Canyon State vary slightly from others that also adhere to community property laws. In other community property states, property is divided 50/50, or as close as possible. Arizona’s property division laws, though, state that property should be divided fairly and not necessarily equally. The fact that the courts will still try to divide property equally distinguishes this specific community property law from equitable distribution laws in other states.

State law also makes an exception to the community property when one spouse has recklessly wasted marital assets. For example, one spouse may have a gambling problem they wasted $100,000 of marital funds on. A judge could then reduce any property they were awarded by $100,000 to compensate for the marital waste.

What Constitutes Separate Property?

During a divorce, only marital property is divided. Separate property is not subject to the same division rules. Separate property refers to:

  • Any asset or debt one spouse acquired before the marriage and brought into the relationship with them,
  • Any property a spouse received as an inheritance or gift either before, during, or after the marriage, and
  • Any property that is included in a valid prenuptial or postnuptial agreement.

There are instances in which separate property can be classified as marital property. This often occurs when separate property is commingled with marital assets. For example, if one spouse received an inheritance during the marriage and placed it into a joint bank account, the property would likely be considered marital. It would be impossible to determine which funds were part of the inheritance and which were marital funds, so the courts deem the entire account as marital.

There are also times when an asset can be considered marital and separate. For example, a spouse may have had a retirement account before marriage. That portion of the savings would be classified as separate. However, any funds they contributed to the account after the marriage are considered marital property and are, therefore, subject to division.

Reaching a Settlement Agreement

Ideally, spouses are able to reach an agreement about how property will be divided during their divorce. Spouses can reach an agreement by negotiating with each other or by entering mediation to resolve the dispute. In either case, it is best to work with an Arizona family lawyer who can communicate with the other side on your behalf. Couples can divide property within a settlement agreement by assigning specific items to one party, allowing one person to buy the other out of their share of the property, or by selling property and fairly dividing the proceeds.

A couple can also choose to continue to co-own certain properties after the divorce. Because this requires a continued relationship, it is not always practical. However, there are some cases when it is a good option. For example, a couple may own an investment property they expect to increase in value. Both parties may agree to continue owning it together but have limited contact regarding the property.

Along with assets, couples must also divide marital debt within a settlement agreement. Still, it is important to remember that settlement agreements do not bind creditors. As such, creditors and debt collectors can still contact the other spouse in an attempt to recover the debt, even if they are no longer responsible for it. It is important to remove your name from any credit cards or other debt you are no longer liable to pay.

As long as the family court finds the settlement agreement fair, a judge will approve it, and the document will become legally binding. If the document is not fair to both parties, a judge can strike portions of the agreement, or the document in its entirety.

Our Family Lawyer in Arizona Can Help With Property Division Issues

If you are going through a divorce, our Arizona family lawyer at Singular Law Group, PLLC, can help with property division disputes. Our experienced attorney will negotiate with the other side and help you keep what is most valuable to you. Call us now or reach out to us online to schedule a consultation and learn more about how we can help.

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