How is marital property divided according to Arizona law?
Arizona Law for Dividing Marital Property
The state of Arizona does not follow an equitable distribution model for allocating marital property Rather, it is one of nine “community property” states. As a result, Arizona courts operate under a strong presumption that all of a couple’s debts and assets are community property, to be divided equally if they were acquired during a marriage. This is why it is important to know when property is separate so that it will not be subject to marital property distribution.
Exceptions to the Rule
In Arizona, property acquired during the marriage carries the presumption it belongs to the community estate. But there are exceptions to this general presumption.
Property acquired during a marriage may be treated as sole and separate property in the event of the following:
- The property was acquired by inheritance
- The property was acquired by a gift
- The property was acquired in exchange for other sole and separate property
Although these definitions are fairly simple, complex divorce scenarios can muddy the waters significantly. For example, if a spouse owns a business at the time of marriage, it can be difficult to pin down the amount of business appreciation that belongs to the community.
Another issue that may occur is when spouses “commingle” sole and separate property with their spouse. When this property becomes commingled, it loses the separation property and will then become community property. At this point, the property could then be subjected to marital property division.
These issues arise when spouses purchase property using a mix of shared and separate money, or when couples share a joint account but deposit separate property resources into the account.
Although the concept of community property is simple one, division of marital property can be quite complex. Contact us at Hallier Stearns PLC to discuss your legal questions and how Arizona’s community property laws can affect your financial future.