Arizona Community Property Laws – Who Gets What?

When you go through a divorce in Arizona, you and your spouse will have to divide your property and debts. How your property will be divided will depend on when it was acquired and whether you have a prenuptial or postnuptial agreement in place.

The attorneys at the Schill Law Group can help you to understand the community property laws of Arizona and advise you about the potential tax consequences and other issues that might arise during the property division portion of your case.

How is Property Divided in Arizona Divorces?

While some states are equitable division states for divorce cases, Arizona is what is known as a community property state. Under A.R.S. § 25-211, all of the assets and property that are accumulated during your marriage are considered to be community property with the following exceptions

• Property that one spouse inherits
• Property that is given as a gift to only one spouse
• Property that is obtained after a divorce or separation petition has been filed

[1] Community property is considered to be equally owned by both spouses. This means that the community or marital property will be divided equally between each spouse during the property division portion of the divorce.

How are Debts Handled in a Divorce?

Like the assets that you accumulate during your marriage, the debts that you and your spouse have accumulated are also considered to be community debts and subject to division in your divorce. Handling the division of debts in your divorce can raise some important issues.

If the judge orders that your spouse is responsible for repaying a debt that has both of your names on it, your credit score can be harmed if your spouse fails to pay it on time. This is because your creditors are not parties to your divorce case, and they are not required to follow the family court’s orders.

If you have joint debt with your spouse, you should try to either jointly pay them off before your divorce is finished. If that’s not possible, you should contact the companies to try to get your name removed.

If your spouse is allocated the responsibility for repaying a jointly held debt after your divorce but fails to fulfill his or her obligation, you will need to repay it yourself to avoid damage to your credit.

You can file a motion with the court to hold your spouse in contempt for failing to meet his or her obligations to seek reimbursement for the amount that you had to pay for the debt that was allocated to him or her.

What is Separate Property?

Under A.R.S. § 25-213, the separate property includes the property and liabilities that each spouse brought into the marriage. It also includes inheritances that are received by one spouse and gifts that are given to only one spouse during the marriage.

Separate property is not subject to division in a divorce and instead remains the sole property of the spouse who owns it. However, property that becomes commingled with the marital property during a marriage may lose its separate nature and be included in the marital estate.

For example, if one spouse inherits money, deposits it into a joint bank account, and uses some of the funds to pay for bills and other items during the marriage, it might be considered to be commingled with the marital estate and subject to division.

If a spouse who inherits money instead keeps it in a separate account and does not use it to pay for community debts, it should retain its separate nature and avoid being divided in a divorce.

What is the Effect of a Prenuptial or Postnuptial Agreement?

A prenuptial or postnuptial agreement is a legal agreement that both spouses enter into either before or after their marriage. Prenuptial agreements have become more popular. If your fiancé presents you with a proposed prenuptial agreement, you should consult with a family law attorney at the Schill Law Group before you agree to sign it.

A prenuptial agreement may be used to waive your rights to certain types of property in the property division of any future divorce. It can also be used to waive your right to seek spousal maintenance.

If a prenuptial agreement is in place, it could prevent you from getting some of the assets that would otherwise be considered to be marital property in your divorce. For example, if your spouse had a business before your marriage, you may not be able to get your portion of the increased value of the business in your divorce if you waived your rights to it in a prenuptial agreement.

A Phoenix divorce attorney at the Schill Law Group can review a prenuptial agreement to determine whether it is valid and how it might affect your rights. If the agreement was not entered into or drafted correctly, the court may disregard it and order the community property to be divided between you and your spouse as if it did not exist.

A prenuptial agreement can be challenged and might be set aside by the court for the following reasons:

• You entered into it involuntarily.
• Your spouse failed to disclose the extent of his or her assets.
• The prenuptial agreement was unconscionable at the time that it was drafted.
• The prenuptial agreement resulted from fraud, coercion, or duress.

Proving that a prenuptial agreement should be set aside will require some investigation and evidence. If it is set aside, you will then proceed with a normal property division in your divorce.

It is important to note that a prenuptial agreement will not be set aside simply because you made a bad deal or that your circumstances have changed since you signed it.

What Happens if a Spouse is Concealing or Hiding Assets?

In some divorces, one spouse will try to hide his or her assets, transfer them to others, or spoliate them simply to prevent the other spouse from getting his or her fair share. If you believe that your spouse is hiding assets to prevent you from receiving what you should, working with an experienced attorney is important.

A lawyer can work with forensic accountants and other experts to locate assets that your spouse has hidden. If it is impossible to locate everything, your attorney can present evidence to the court and ask for the judge to draw an adverse inference based on your spouse’s conduct.

Have an Aggressive Phoenix Divorce Attorney on Your Side.

Dividing your property and debts in a divorce can be complicated. If you have been married for years and have accumulated substantial assets, the process can be even more complex.

The attorneys at the Schill Law Group have handled hundreds of complex divorce cases and are experienced in handling all types of property division matters. Contact us today to schedule a consultation by calling us at 480.525.8900.