Arizona Community Property: Commingling vs. Separate Property

Arizona is one of nine community property states in the country. In Arizona, spouses typically co-own all property, debts, assets and the like. While there are exceptions – property owned by own spouse before the marriage remains separate property, for instance – nearly everything acquired during a marriage is owned by both spouses.

So when does separate property become commingled in the state of Arizona?

Commingling Separate Property

Separate property can turn into community property when assets become “commingled” during the course of a marriage. The process of commingling can occur when:

– community funds and separate funds are deposited into a joint bank account;
– community funds and separate funds are combined to make purchases;
– money is transferred from one bank account to another;
– funds are reinvested; or
– money is borrowed from an outside source.

In each of these cases, and separation of property is essentially eliminated when it becomes part of the community, or the couple. In Arizona, half of each spouses’s income is owned by the other spouse, which makes financial separation difficult to maintain.

The community property laws of the state offer more co-ownership, but this can also lead to conflicts when trying to determine separate and community property.

Tracking Separate Property

If a spouse can track a separate asset back to its original source, they can increase their chances of keeping that asset as their sole property in the terms of their divorce. However, tracking an asset back to its initial state can be extremely difficult and this process is best facilitated with assistance from an experienced divorce attorney.

Property division is an important aspect of any marital situation, whether it’s involving divorce, or simply a prenuptial or postnuptial agreement. To learn more about property division, community property law and Arizona divorce law, contact the family law attorneys at JacksonWhite Law. We’ll help you fully understand your options and craft a legal solution that meets your needs.

Call our family law team at (480) 464-1111 to discuss your legal needs today. 

 

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