What Is Transmutation of Property
In Arizona, married couples typically own their property and assets jointly. This is known as community property. There are only a few exceptions to the community property rules of divorce. Property owned by a spouse before the marriage, or assets that were gifted to or inherited by one person alone, are considered exempt from community property distribution. Sometimes, there is a transmutation of property. This is an action that converts separate property into community property.
How Property Ownership May Be Changed
Property ownership, or transmutation, between married couples is a fairly common occurrence. There are several ways that property ownership may be converted. These include:
- Gifting property to a spouse
- An agreement between spouses
- Through co-mingling of property
When you are going through a divorce, it is essential to identify areas of property ownership dispute, so that they may be resolved as quickly and easily as possible.
Changing Sole Ownership to Joint Ownership
Most people own property before they get married. Once they get married, they may decide to change their sole ownership into joint ownership, also known as community property. One of the most common instances of this is with home ownership. When one party owns their home prior to marriage, they may change the title, and loan, after the wedding, to include the spouse. This generally will effectively change ownership to make the home community property, regardless of how much money the new spouse put into the purchase.
Co-mingling Property Can Cause Problems
When people get married, they combine their households. When they do so, they often co-mingle property, such as bank accounts, generally making it community property subject to a party’s ability to “trace” the property effectively. If the couple later decides to divorce, they may face some difficulty determining which property is owned by one party, and which property is owned by both. Community property needs to be distributed equitably. If your spouse disagrees over property ownership, the divorce may become more difficult.
Resolving Disputes over Property Ownership
Couples who are divorcing may not agree about many issues in their divorce. When there are property disputes, the situation can be contentious. The best way to protect your ownership rights is by putting everything in writing, often through a Premarital or Prenuptial Agreement. Unfortunately, married couples rarely do this. When the disagreement involves the house, or other high priced property, it is necessary to seek legal assistance. There are some cases where evidence can be presented to dispute that an asset was not meant to be transmuted.
If you are going through a divorce, call the experienced divorce attorneys at Udall Shumway PLC to schedule a consultation.
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regarding Transmutation of Property, or other family law issues, please feel free to contact Barry C. Dickerson at 480.461.5300, log on to udallshumway.com, or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools, and municipalities in Mesa and the Phoenix/East Valley.
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