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The intricacies of community property and why they are important

When it comes to property division in a divorce, there are two ways that states deal with the thorny issue in a basic way. Most states go with "equitable distribution," which means that in a family court, a judge decides which assets should go to which spouse. The judge does this in such a way so that each spouse is roughly "equal" in that judge's mind. This can lead to "unbalanced" outcomes in terms of the amount of assets each spouse gets (i.e. one spouse could get three-quarters of the assets if a judge thinks that is what is "fair").

The other way states deal with property division is "community property." Arizona is one of the states that follows community property laws, and these laws state that any asset or piece of property that is deemed community property is equally shared by the splitting spouses.

Even under community property laws, there are assets that can be given to just one spouse. For example, gifts and inheritance are exempt from community property. There are also situations where the spouses use their communal funds to purchase an asset, and this can lead to the situation where a piece of property that you may consider to be separate property is actually deemed community property.

In other words, community property -- though it may sound simple -- is actually a complex set of laws that require any divorcing spouse to consult with an attorney to ensure that they are going about their divorce (and their property division issue) in the right way.

Source: FindLaw, "Divorce Property Division FAQ," Accessed Dec. 23, 2014

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