Although Arizona is a community property state, there are several misconceptions surrounding what this actually means. Many people misunderstand community property to mean that everything either spouse owns is community property or only assets titled jointly are considered community property. The reality can be much more complicated.

The attorneys at Lincoln & Wenk know the process of dividing the property you and your spouse have acquired during your marriage, including your marital home and other significant assets, can be complex and emotionally charged. Our legal team is here to provide you with the guidance and advocacy you need during this challenging time.

What is Community Property?

The legal principle known as community property means that marital assets and debts acquired during the marriage are generally considered community assets and debts, and subject to equitable division between two spouses. However, not all property owned or received by a spouse during the marriage is considered community property. For example:

• Sole and separate property owned by either party prior to marriage;
• Gifts and inheritance; and
• Property acquired after a divorce or legal separation petition is served (assuming the petition results in a final decree).

Separate property is generally not subject to division by the family court, and will remain the separate property of the party who brought it into the marriage or received it as a gift or inheritance.

Even this isn’t quite as straightforward as it seems, however. First, if separate property is commingled with community property, it may become difficult or impossible for the court to differentiate between what is considered separate or community property. In addition, if community funds are used to pay a mortgage or for improvements on sole and separate property, the marital community may have a lien against the property and be entitled to reimbursement.

Division of Community Property

Arizona law provides that community property is to be divided “equitably.” While that will often times mean equally or close to a 50/50 division, that is not always the case. Arizona judges still have discretion to craft a fair and equitable division, which may or may not result in an unequal division of property depending on the circumstances.
Even if community property is to be divided evenly, the parties may still disagree about the value of the property. This may require an appraisal of the property in question, or for valuation services or experts to be retained to assist in determining fair market value of the assets.

Of course, if the parties are able to reach an agreement as to the value(s) of their community assets and debts, and how they want them divided, this will always trump what a judge may have otherwise decided. An amicable resolution is ultimately more cost effective, less time consuming and less contentious for both parties. Our attorneys are experienced in settlement negotiation and will work to secure a favorable property division for you.

Community Waste and Fraudulent Disposition

While Arizona is a no fault state, and therefore marital misconduct isn’t generally considered as part of a divorce case, waste or dissipation of assets can be an exception. If one spouse has drained community assets in the lead-up to the divorce, the value of those assets can be considered in dividing property. Or, if one spouse is having an affair and takes half of the couple’s savings to go on a spontaneous, month-long tour of Europe just prior to filing for divorce, those wasted funds might be considered when allocating a fair share of the remaining assets to each spouse.

Community waste can be difficult to prove, so if you suspect that your spouse has been diverting, wasting or hiding community assets, you should seek counsel with an experienced divorce attorney.

Prenuptial or Postnuptial Agreements

Arizona law allows for parties to enter into prenuptial and postnuptial agreements that spell out the parties’ property rights and provide a framework in the event of a divorce. Arizona courts recognize and will honor both, provided they are in writing and voluntarily signed by both parties after fair and reasonable financial disclosures (unless they are expressly waived).

Prenuptial agreements can be modified after the parties are married as well, so long as it is in writing and signed by the parties. A prenuptial agreement can be revoked (terminated) altogether as well.

If you or your spouse are contemplating a prenuptial or postnuptial agreement, it is highly recommended that each of you retain attorneys. This will ensure both parties are fairly represented and informed in the negotiation and execution of the agreement, while also protecting both sides from claiming the agreement was entered into under duress or without being fully informed in the future.

Protecting Your Financial Future

At Lincoln & Wenk, our primary goal will be to protect your financial future and ensure a fair and equitable division of your assets and debts. We understand the importance of preserving your financial stability and will work diligently to secure your rightful share of your marital estate.

If you are facing or have questions about property division issues in Arizona, you are not alone. Call us today to schedule a consultation with one of our experienced family law attorneys.