Divorce Property Division

Oct 1, 2024 | Syndication Cloud

Divorce CasePhoto from Unsplash

Originally Posted On: https://thevalleylawgroup.com/blog/divorce-property-divison/

 

 

How Arizona Handles Property Division in Divorce Cases

The process of navigating a divorce is an emotionally overwhelming experience for most people. This is especially true for couples with significant marital property and other unique assets or debt that must be distributed equitably. The good news is that you don’t have to go through it alone. A divorce attorney who has experience with property division can be an invaluable resource if you find yourself facing a divorce.

At The Valley Law Group, our team boasts decades of experience handling a wide range of divorce cases in the state of Arizona. Choosing The Valley Law Group means that you don’t have to worry yourself over the intricacies of the legal divorce process. We understand how emotionally and financially straining a divorce can be, which is why we use a personalized approach to provide you with a better understanding of the various options available to you. We will ensure that your rights are protected as we work towards an equitable agreement that serves your best interests.

Community Property Laws in Arizona

Many divorcing individuals find themselves asking, “How is property divided in an Arizona divorce?” Since Arizona is a community property state, married couples who are seeking a divorce are required by state law to split all assets equitably so long as they were acquired during the course of the marriage. The state’s community property laws were created to reduce lengthy and drawn-out litigation during the division of marital property. They are also meant to help alleviate any potential animosity and solve issues during a contested divorce.

Once one spouse files a Petition for Dissolution of Marriage, the process generates a rebuttable presumption. This ensures that all assets and debts that were accumulated throughout the course of the marriage are included in the marital estate and subject to equitable division.

Defining Community Property and Separate Property in Arizona

Any property owned by either spouse or the couple together must be designated as community property or separate property.

Community Property

Community property refers to all assets and debts that were acquired throughout the course of the marriage and assigns them to the marital estate. Regardless of which spouse primarily acquired the asset or debt during the marriage, it is still considered community property and is legally subject to equal division.

Assets considered community property can include the following:

  • Vehicles
  • Joint bank accounts
  • Retirement accounts
  • Investment accounts
  • Real estate
  • Businesses
  • Furniture
  • Valuable artwork
  • Jewelry
  • Electronics

However, if either party can prove to the family courts that a particular asset or debt should be considered as separate property, then that asset or debt may not be subject to division.

Separate Property

Separate property is defined as any property acquired prior to the marriage or after a divorce petition is filed. Any property or assets that were given specifically to one person as a gift or inheritance are also considered separate or sole property.

Here are some of the common assets considered to be separate property in Arizona:

  • Inheritance
  • Pre-existing bank accounts in the name of only one spouse
  • Property gifted or inherited by only one spouse
  • Assets that were purchased with separate property
  • Money won from a personal injury settlement
  • Any property that is listed in writing to one spouse

It’s important to note that any assets classified as separate or sole property are safe from division in the event of a divorce. In general, any premarital property, inheritance, property purchased from assets given to an individual spouse in the form of a gift or inheritance, or property purchased after the divorce proceedings have begun are considered separate property and free from equal division in a divorce. This category can include any assets termed separate property in a legally binding premarital or postmarital agreement.

In order to legally prove that certain property or assets are separate and should not be subject to division, the spouse who is making the claim must provide sufficient evidence or documentation to support their claim. Without this clear evidence, the property will most likely be considered communal and be subject to equitable division.

Community Debt

In addition to assets and physical property, debt is typically considered to be part of the marital estate. Depending on the circumstances surrounding how and when it was acquired, debt can be considered either community debt or separate debt. Any debt that was jointly acquired by the spouses during the course of the marriage or by one spouse for property that benefited the couple is typically determined to be community debt, which would be subject to equal division.

However, it’s important to note that any debt acquired prior to the marriage by a single spouse would be considered separate debt and remain the responsibility of the single spouse. In cases where one spouse incurs debt through negligent or adverse actions, such as gambling, then that debt can be considered separate as long as the other spouse can prove those circumstances.

Trusts

While inheritance is considered to be separate property of the spouse who receives it, proceeds from trusts can be a bit more complicated. If a couple establishes a revocable trust during their marriage and funds the trust with community assets, it would be categorized as part of their overall marital estate and subject to division in a divorce. However, if the trust was created and funded with separate property of one of the spouses, then they will be able to retain the trust as sole property.

How Are Business Assets and Property Divided?

For married couples who have a joint interest in a business, the company may be subject to division. If the business was started during the marriage or if both spouses contributed to the business during the marriage and those contributions increased the value of the business, both spouses would be entitled to receive a division of the value of the business.

If one spouse started the business before the marriage and was the sole contributor to its inception, they are often entitled to retain sole ownership of the business. When couples own or operate a business together, they have the option of negotiating with the other spouse to buy out their interest in the business. No matter the circumstances of your business, it is wise to consult with a reputable property division attorney to ensure you secure the portion of your business you are entitled to.

Who Keeps the House in an Arizona Divorce?

One of the very first questions that many couples ask when they begin the divorce process is who will keep the family home. The marital home is typically one of, if not the most, substantial asset most couples own. By law, the home must be sold on the market, and the profits divided between the spouses or allocated to one of the spouses during property division.

Here are some of the factors that can influence which spouse keeps the house in a divorce:

  • Who actually purchased the home, and the source of funds
  • Where the funds to pay the mortgage and other house-related expenses come from
  • Whether either spouse attempted to damage, destroy, or conceal any other property
  • Whether either spouse is willing to let go of other property in exchange for the house
  • Whether children are present and if continuing to raise them in the house is in their best interest

Cashflow can also have an impact on deciding who gets the family home. Individuals who have available funds may be able to negotiate a deal with their spouse where they can buy out their spouse’s interest in the house. In some cases, the spouse wishing to make a deal in order to retain the home may be responsible for paying the mortgage, property taxes, and other house-related expenses, as well as paying the other spouse their share of equity over time. Much depends on the couple’s willingness to negotiate.

In many cases, an agreeable settlement is made that allows one of the spouses to keep the house in exchange for assets equivalent to half the home’s value, especially in instances where children are involved. Regardless, it’s crucial to the outcome of your divorce agreement that you consult with an experienced property division lawyer to ensure that you secure an equitable settlement.

Can a Spouse Kick the Other Out of the House Before the Divorce is Final?

As you may expect after learning about the complexities of dividing a home during property division, divorce can be a complicated and sometimes contentious process. In many cases, spouses who are filing for divorce no longer want to live together in the same home, even if it is community property. But how do you decide who should move out and who should stay while the divorce process is ongoing?

A spouse cannot legally have the other spouse removed from a shared community home without a court order. If an individual has been forced by their spouse to leave a family home that they co-own, law enforcement may be called to provide assistance.

However, either spouse does have the ability to file a motion with the court for temporary orders that would allow exclusive use and possession of the home. This request will either be accepted or denied depending on the discretion of the judge and any evidence provided by the spouse filing the motion.

In divorce cases that involve domestic violence, a judge can put an Order of Protection into place to protect the abused spouse. This order will prevent the abusive spouse from returning to the family home. The order also grants law enforcement the ability to arrest the abusive spouse should they attempt to violate the order.

In an instance where one spouse has already moved out of the house voluntarily during a legal separation, the court is most likely to maintain the current arrangement unless there is new information or evidence brought forth that changes the circumstances.

A divorcing couple may come to an agreement between themselves regarding who will retain the family house and how much equity the other spouse will recover. If the parties are unable to agree on the equity or who will keep the house in the divorce, then the court will either grant the house to one of the individuals or order that it be sold and equitably divide the value. The spouse granted retention of the house will usually be held responsible for continuing to pay the mortgage.

Prenuptial Agreements and Postnuptial Agreements

If a married couple enters into either a prenuptial or postnuptial agreement, it can directly impact how their property will be divided in the event of a divorce. A prenuptial agreement is a legal agreement made by the couple before getting married concerning the ownership of certain assets should the marriage come to an end. A postnuptial agreement is the same type of document, signed after the couple has married.

According to Arizona state law, any premarital or postmarital agreements must meet some general requirements to be determined as valid and enforceable by the court.

The agreement:

  • Must be in writing and signed by both parties
  • Must be entered into and signed voluntarily
  • Must be generally fair to both spouses
  • Must involve both members of the couple disclosing their assets and debts without a waiver of rights to disclosure

A prenuptial or postnuptial agreement can also impact a spouse’s ability to request alimony or spousal support in the event of a divorce. However, if a prenuptial or postnuptial agreement falls short of meeting any of the requirements, then either spouse can challenge the agreement to potentially have it voided by the court. If you have concerns about your prenuptial or postnuptial agreement, an attorney can help you determine its validity and how it is likely to impact your divorce process.

Property Division in a Cohabitation Relationship

For couples who live together in a jointly owned home but are not married, the division of property is not as straightforward as it is with married couples. In addition to the house itself, there may be other particular items that were acquired and owned jointly in a cohabitation relationship without ever having been married.

If you live with your significant other but were never married, then you are entitled to retain all of the property and assets that you purchased by yourself. However, you may need to provide financial records or receipts documenting that you purchased those assets by yourself and not jointly with your partner. In turn, any assets or property that your partner purchased on their own will remain their property.

Ultimately, if you are in such a relationship, it is highly recommended that you write up a contract documenting precisely how your property will be divided in the event that your relationship ends. Because the laws and definitions of communal property concerning unmarried couples are much less clear than those of married couples, it’s also encouraged that you speak with a trustworthy family attorney who has experience handling property division cases in Arizona. An attorney can help you ensure a fair and equitable division of property in your unique case.

Contact the Valley Law Group, Property Division Lawyers

Whether you’re contemplating a divorce or your spouse has already filed a Petition for Dissolution of Marriage, it’s paramount that you obtain reputable legal representation that is able to guide you through the complicated process associated with asset & property division. An attorney with experience will help you secure a resolution that ensures that you receive a fair property division settlement during your divorce.

At The Valley Law Group, our experienced team of family law attorneys understands the emotional attachments and highly personal assets involved in a divorce case. We are committed to negotiating on your behalf and maintaining the compassion necessary to ensure that you understand the legal options available to you. Your knowledge, coupled with a skilled attorney, ensures that you can make knowledgeable decisions regarding your asset division.

Contact our firm today to schedule a consultation and learn more about how our Arizona property division attorneys can help you.