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Community property refers to any assets acquired during the marriage. The idea behind equal division of community property is that during a marriage, property is owned equally. From this it would make sense that in a divorce, all assets would be divided equally among the parties.
Arizona is an equal division state, which means that they adhere to the equal division of community property — to an extent. Arizona courts are required to give each spouse a “fair” share of the property. This is where things can get complicated in court because what one party views as fair may not be what the judge sees as fair.
However, typically this “fair” division of community property turns out to be rather close to a 50/50 split of the community property. Keep in mind that community property is different than solo-owned property.
An experienced family law attorney can help you determine if your property is solely owned or community property and decide if you are entitled to half or all of said property. If you’re facing a potential divorce and would like to learn more about community property, we invited you to call our offices to schedule a case review.
Many people find it hard to allow the court the sole power to distribute property in a divorce – these people lean towards coming to an agreement on their own with their spouse or through divorce mediation.
Considering litigation or mediation to finalize the division?
Arizona is one of only nine states in the county that’s considered a community property state. This means that nearly all property, including assets and debts, that’s acquired during a marriage is owned by the couple as a community.
This is in contrast to other states, where having your name on a title or other document of ownership proves sole ownership of the property. In Arizona, even if a car or house is in one spouse’s name, it’s likely considered to be community property if it was acquired during the marriage.
Determining Community and Separate Property
One of the most important aspects of divorce proceedings is the division of marital property. During this time, the court first determines what type of property is present, how much the community property is worth, and how it will be fairly divided.
The first step is figuring out if the property involved is considered community or separate property. In general, nearly all property acquired during the marriage will be considered community property.
There are exceptions, however. In these three cases, the property can be considered separate:
- If the property was owned by a spouse before the marriage
- If the property was gifted to one spouse
- If the property was inherited by one spouse
In these situations, the spouse with the property has sole control over it, and it won’t be included as community property during the division of marital assets.
All other property will likely be considered community property, which means that both spouses have equal control and ownership.
Determination of property can also be adjusted based on how the property was used during the marriage. This is where division of marital property can get especially complex – when property becomes commingled.
Income as Community Property
In Arizona, income and other means of compensation are considered community property. This means that each spouse has ownership of half of the other spouse’s income. So if one spouse makes $50,000 annually and the other makes $75,000, each spouse has ownership of $62,500 in income because that’s half of both incomes combined.
Managing Marital Property in Arizona
Fortunately, spouses are able to freely divide marital property between themselves. Many times, couples can reach agreements on property, or they may have to consider litigation or mediation to finalize the division.
Couples can also manage how property is determined with marital contracts, such as prenuptial agreements and postnuptial agreements. In these, spouses can outline exactly how community and separate property will operate during and after the marriage.
This may be beneficial for couples who have large gaps in income, assets or other property.
Property Division Outside of Marriage
Though most couples think of marriage and divorce when it comes to marital property, these property definitions also apply to other legal areas, including:
- Estate planning and probate matters
- Income tax planning
- Protection of assets
- Medicaid and healthcare planning
As you can see, marital property can affect many areas of a couple’s personal and financial life together, so it’s important to know the distinctions when considering legal actions.
These kinds of issues are resolved at the judge’s discretion based on facts presented in court. Having an attorney on your side that will fight to get you what you want and deserve will be important at this point.
Both sides are acting with their own self-interest in mind – an aggressive and understanding divorce attorney will advocate for you and make sure that you are not take advantage of or intimidated.
Factors Considered by the Court in Dividing Community Property
If you are unable to separate property outside of court, you will be at the mercy of the court’s decision in regards to the distribution of property.
Some major factors that the judge will consider include:
- Earning Capacity: If you both will be leaving the marriage with the same earning capacity, then the split is simple. However, if one side will be left worse off after the divorce, then this will be considered in the distribution of community property.
- Length of the marriage: The length of the marriage is considered in the process because if the marriage is short and one party brought in most of the new property, they are entitled to more. On the flip side, if it is a long marriage in which both parties helped accumulate the new property and one party will be left worse off after the marriage then they will be given greater consideration.
- Value of their Separate Assets: Family trusts, private investments, inheritances, settlements, etc. are considered because they impact your future well-being.
- Wrongdoing: The judge will also consider if there has been any wrong-doing, e.g. hiding of assets, squandering property, gambling habits, unapproved spending after the divorce papers were filed, etc.
- Fairness: The key to this equation is fairness. The judge is trying to separate the assets evenly and fairly. Making a strong case for your needs will be necessary.
- Where the children will be living: If you have children and are granted majority custody, then you will likely be granted the house because the children need a home. You would also likely be granted a car if you have one because it is part of caring for your children and driving them places.
- Liquidity: Some assets (for example: real estate) are tangible and are not cash. You can’t separate a property in half, so one person gets the property or the property is sold and the money is divided equally/fairly.
Call the Family Law Team at (480) 467-4348 to discuss your case today.
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