Is Arizona Considered a Community Property State?
Arizona is a community property state, which means that the community property laws of Arizona will control your division of property and debts in a divorce case.
Community property law presumes that all property, assets, and debts acquired during the marriage are now forms of community property. Therefore, the property is shared equitably (generally meaning “equally”) among the marriage partners. The property, while not clearly defined at times, includes:
- Wages and earnings
- Retirement accounts
- Investment accounts and brokerage accounts
- Real estate and land
- Savings accounts
The Division of Property and Debts Under Community Property Law
Per ARS Section 25-215, there is a community property rule and separate property rule.
Under the community property law, there is an equal division of property and debts acquired in the marriage. However, fair does not always mean that the assets are literally split down the middle or 50-50 in shares.
Instead, the property divisions are based on total asset value. So, one spouse might receive the family home in the divorce, but the other accepts furniture, jewelry, and artwork that totals the same market value as the family home.
Numerous issues will arise in a community property divorce, especially regarding real estate and business assets. For example, a home may have only one spouse on the title, and only that spouse was responsible for paying the mortgage obligation. Therefore, your family law attorney will rely on case law to help interpret the community property law and how that house should be classified.
The Sole and Separate Property Exclusion
Sole and separate property, as dictated in the statute, is comprised of the assets acquired before the marriage. Therefore, it is owned by the partner in the marriage who purchased it and holds the title of ownership. However, some property acquired during the marriage can also be classified as sole and separate property.
For example, if you own a business before the marriage, then the business is your asset. However, it could still be considered at least partially community property based on the growth achieved during the marriage. While your spouse would not be entitled to all assets of your business, they would qualify for an equal share of the business growth during the marriage.
The division of property and debts is highly complex and can be aggressively contested. So, contact an attorney from Udall Shumway, PLC to see how your assets and investments will be treated in a divorce.
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 Community Property, or other family law issues, please feel free to contact Lindsay A.M. Olivarez 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.