It Still Could Be Community Property Even If Your Name Isn’t On It

We don’t waste time during divorce consultations on personal judgments, but we do notice one common misconception that potential clients hold before we speak to them: if something was acquired in one spouse’s name alone, it is solely that spouse’s property or liability. This is a misconception because Arizona is a community property state. This information can often impact a spouse’s decision on whether or not to file for divorce. But you don’t need to leave these kinds of important legal calculations up to guesswork. Our experienced Glendale family law attorneys can help you with divorce and a variety of other family law matters. Call 480-448-9800 to schedule your free phone consultation today.

What Is Community Property In Arizona?

Community property is the marital property structure that is used in the state of Arizona, among others. The other most common type of marital property structure is equitable distribution. While equitable distribution states focus on making sure the outcome of a divorce is equitable, community property states focus more on dividing the marital estate evenly. All assets and debts acquired during a marriage, regardless of whose name is on the asset or debt, belong to both spouses equally in a community property state. Assets that aren’t purchased in full can also become partially community property in Arizona. For example, let’s say a husband puts a down payment and makes some mortgage payments before getting married. After the marriage, the mortgage and upkeep are paid for out of a joint bank account. If the couple were to divorce, the portion of the mortgage paid off during the marriage would be community property, while the rest would be the husband’s separate property.

More Community Property Examples

• A wife opens up a credit card in her name alone and maxes it out on designer clothes and handbags. Her shopping habit has crossed into addiction territory, and she continues to rinse and repeat without paying off any credit cards. Her husband reaches his limit and files for divorce. Theoretically, they would split all of their marital property in half, and he would be liable for half of his wife’s credit card debt that was incurred during the marriage.
• The wife agrees to pay the debt in the divorce, possibly in exchange for a larger share in a different community property asset. After the divorce is finalized, she files for Chapter 7 bankruptcy and wipes out her credit card debts. Unfortunately, credit card companies aren’t bound by family law court orders. They may eventually come after the husband for any remaining unpaid portion of the wife’s credit card debt.
• A husband has a lucrative career and is the family’s primary breadwinner while the wife stays at home to take care of the house and children. During the marriage, he purchases their home and all of their vehicles. He cheats, and she wants a divorce, but he threatens to kick her out, keep all the cars, and leave her penniless. However, she is due half of anything acquired during the marriage, because community property recognizes non-financial contributions to the marriage, e.g., housekeeping and childrearing. The husband may even be ordered to pay the wife spousal maintenance and/or child support.
• A husband purchases a truck for his business that started after getting married. The truck is even titled in the company name. However, it was ultimately purchased with community property funds during a marriage in a community property state, regardless of the wife’s involvement with the business. That means its value must be divided evenly between the spouses if they were to get divorced.
• A husband opens up a credit card before he gets married. After the wedding, he incurs debt on that card that he can’t repay. The couple eventually gets divorced. While the card was acquired in his name alone, the debt was acquired during the marriage, making it community property and evenly divisible in divorce.
• There could be an exception under limited circumstances. A spouse can be credited during property division if the other spouse has committed marital waste. Here, if the husband ran up his credit card on an impending divorce self-pity party, gambling, drinking, and recklessly spending outside of normal financial habits, the wife might not be held accountable for this debt. Another example would be if the husband maxed out his credit cards right before divorce on hotel rooms to spend time with an extramarital lover.

What Can Be Considered Community Property In Arizona?

It’s not just bank accounts and tangible assets like homes and cars that are considered community property in Arizona. If a business is started during a marriage, or a business interest is acquired during a marriage, that is considered community property in Arizona. Retirement accounts, like pensions and 401(k)s, are also considered community property. These can be complex to split if started before the spouses got married. It must be done with a form called a QDRO, or a Qualified Domestic Relations Order. Most spouses have extreme difficulty accurately completing a QDRO without an attorney’s guidance. Financial instruments and investment portfolios could also be subject to community property division. Jewelry like an engagement ring or a watch gifted during the marriage could be in question as well. Contact a Mesa family law attorney for more information at 480-448-9800.

How Does Community Property Law Affect Child Support Obligations?

Some spouses sign prenuptial or postnuptial agreements to eliminate at least some portions of spousal maintenance and property division issues in a divorce. The issues of child support and child custody can’t be predetermined by a marital agreement made before or during the marriage.

In Arizona, child support is based on two main factors- parenting time and parental income. There could theoretically be little to no child support order if the parents have similar incomes and parenting time, or if the percentages of income and parenting time work out just right. Basically, community property does not impact child support obligations or parenting time. Property division and spousal support are the aspects of divorce that are impacted by community property laws.

Fight For Your Family With Our Arizona Family Law Team

A divorce, legal separation, or custody or paternity battle could be one of the most stressful times of your life. Trying to figure out legal intricacies while dealing with emotional trauma can be overwhelming for almost everyone. The court will not appoint a lawyer to represent you in a family law matter, whether that be divorce, child support, child custody, paternity establishment, etc. If you want a lawyer to represent you, it will be your responsibility to go out and find your own. But AZ Family Law Lawyers team can make your hunt a little bit easier. We have experience in a variety of family law areas and offer affordable rates with payment plans designed to work within your budget. Make the decision for yourself risk-free with your no-charge initial consultation. One of our skilled family law lawyers can review your case and give you information and options accordingly, as well as your affordable quote for Arizona family law representation. Call 480-448-9800 today to schedule your free consultation.