Arizona uses a community property system to divide a couple’s assets and debts at the time of divorce. The system is vastly different from the equitable distribution method used by the majority of states. If you are getting divorced, you should seek the advice of a family lawyer who is deeply familiar with Arizona community property rules.
Marital Community Property in Arizona
Arizona is a community property state. That means all assets and debts acquired by either spouse during the marriage are part of the “marital community” and are subject to division, regardless of whose name is on the title. Unless a couple signed a prenuptial or postnuptial agreement that divides property in a different manner, their assets and debts will be divided using community property rules set forth in the Arizona statutes and interpreted by the courts.
Community vs. Separate Property
Characterizing property correctly is an essential and very complex task requiring an experienced attorney. Our legal team will analyze your property to determine whether it belongs to you separately (which means you get to keep it) or it is part of the community (and therefore must be divided).
- Assets and debts acquired by either spouse during the marriage (income earned by each party from his or her employment, and items purchased using that income)
- Pension plan or retirement account
- Appreciation in an owned business’s value during the marriage to which your spouse could have a valid claim.
- Assets acquired by gift or through inheritance during marriage
- Assets you owned prior to your marriage
- If you owned a business before marriage, the business itself remains yours
It is possible for a separate asset to change character during the course of the marriage, ending up as community property by the time of divorce. This is a concept called “transmutation.” For example, if you received an inheritance from a grandparent during your marriage, that would normally be your separate property. So long as it is placed in a bank account in your name and not commingled with monies belonging to the marital community, it would remain your separate property. But, if you put that inheritance into a joint bank account in which community monies are deposited and withdrawn, then over time it may be transmuted and become community property. The process of transmutation is confusing and very technical. You can rely on our firm to make sense of it for you.
Property Acquired While Living in Another State
Arizona is home to many couples who lived and worked in other states before moving here. These couples often own property, such as houses or other real estate, in their former state. For these couples, it is important to realize that Arizona law treats these assets as community property, even if the state in which they were acquired is not a community property state. This concept is known as “quasi-community property.” If you own property in other states, Gary J. Frank will help you sort things out.