What Is Community Property Law & How Does It Affect Your Divorce in Arizona?

The Role of Equalization Payments in Arizona’s Divorce Proceedings

Arizona is a community property state, meaning that all assets acquired during the marriage are presumed to be jointly owned and subject to equal division upon divorce. This includes all types of property, such as real estate, personal property, businesses, investments, and debts. The law assumes that both spouses have an equal interest in the marital property, regardless of whether the property was acquired individually or jointly.

However, the equal division of community property can sometimes result in one spouse receiving assets that are worth more than those received by the other spouse. In these cases, the court may order an “equalization payment” to be made by the spouse who received the more valuable assets. This payment is intended to ensure that the division of assets is truly equal, despite any disparities in the value of the individual assets. It’s a scenario often seen alongside issues like child custody and spousal support.

How Does Community Property Law Affect Divorce in Arizona?

In Arizona, the division of community property is governed by the “equal division” rule, which means that the court will divide the marital assets equally between the spouses unless there are valid reasons to deviate from this rule. This means that each spouse will receive an equal share of the marital assets, regardless of their contributions to the marriage or the size of their separate property.

Some community properties include:

• Real Estate
• Vehicles
• Artwork
• Furniture
• Electronics
• Wages and Earnings (including income from a business)
• Retirement contributions made during the marriage
• Joint bank accounts (including any money in a joint checking or savings account)

However, it is essential to note that not all assets fall under the category of community property. Separate property encompasses any assets acquired before the marriage or after the initiation of divorce proceedings. This distinction is particularly relevant in cases involving paternity rights.

This category comprises:

• Property owned by one spouse before the marriage (e.g., a house, stocks, or a small business)
• Property acquired after the marriage through inheritance or gift (e.g., an inheritance from a family member or a gift from a friend)
• Any property listed in a valid prenuptial agreement

It’s important to note that the burden of proving the nature of a particular property falls on the spouse asserting that it is separate property. This means that the spouse must provide sufficient evidence to demonstrate that the property in question was acquired before the marriage or after the marriage through inheritance or gift. Without sufficient evidence, a family law attorney may advise their client that the court may presume that the property is community property and split it 50/50 between the spouses.

Home Division in Arizona

Divorce proceedings often involve the complex division of marital assets, particularly the family home. Generally considered community property, the home must be equally divided between spouses. During the divorce, if living together becomes impractical, one spouse can request temporary exclusive use of the home.

In situations involving domestic violence, a judge may issue an order of protection, effectively removing the abusive spouse from the home. This legal action ensures the safety of the other spouse during the divorce process.

If spouses cannot agree on the house’s division, the court intervenes. It may require a property appraisal to determine value and equity division. Depending on the situation, the court either assigns the house to one spouse or orders its sale to divide the proceeds. Additionally, the court might require the spouse to retain the home to refinance the mortgage, freeing the other from financial responsibility. For the right approach, you might find a helping hand in an Arizona divorce lawyer. 

Property Division Disparity as a Sanction

In Arizona, courts will not consider any misconduct of one spouse during the divorce proceedings when dividing community property between the spouses. This means that factors such as abandonment, adultery, and abuse will not result in one spouse being granted more rights to community property than the other. However, the court does have the authority to sanction a party during the divorce process, which can result in the forfeiture of community property as a consequence.

Some facts to keep in mind regarding community property in Arizona:

• Both spouses have an equal right to community property during a divorce.
• Community property includes all property acquired during the marriage, except for property that was acquired before the marriage or after the marriage was terminated.
• The court will consider various factors when dividing community property, including the length of the marriage, the income and earning capacity of each spouse, and the contributions each spouse made to the acquisition and maintenance of the property.
• The court may also consider any misconduct or fault of one spouse in the dissolution of the marriage, such as adultery or abuse.
• Arizona law prohibits the court from considering misconduct as a basis for awarding one spouse a greater share of the community property.
• Both spouses are legally required to fully disclose all information and provide documentation regarding their assets and debts within the time frame set by the court.
• They are obligated to comply with the final division of property and distribution of assets ordered by the court and must transfer certain items to the other spouse if they currently have possession.

Failure to follow these court directions can result in the court imposing a sanction on the non-compliant spouse, which may include a disproportionate allocation of community property in favor of the other spouse. Consulting with an Arizona divorce firm might help in the event of dividing community property.

Distribution of Community Property Upon Death

In case of one spouse’s death, the fate of community property is determined by whether or not the property has a right of survivorship clause. If the property does have this clause, it will pass in its entirety to the surviving spouse. This distinction must be explicitly stated in the property title or other ownership documents. 

On the other hand, if the property does not have a right to survivorship distinction, it will be inherited by the surviving heirs of the deceased spouse. Additionally, a spouse has the right to designate a beneficiary for their portion of the community property, which will take precedence over the right to survivorship.

Assure a Lawful Community Property Distribution with Us!

Amid a divorce, the division of assets from years of marriage can present a formidable challenge. AZ Family Law Lawyers stands as a prominent family law firm committed to comprehending the intricacies of your situation. To get started with your free consultation, contact us today.