How Does the Court Determine Division of Property and Debts?
It is common for spouses going through separation or getting a divorce not to agree on how their property and debt should be divided. If they are unable to reach an amicable agreement, the court may make division of property and debts determinations by applying Arizona law to the matter.
Arizona is a community property state, meaning that the law presumes that property or income acquired during the marriage is the equal property of both spouses. This presumption continues, and newly acquired property will continue to be considered community, until one of the spouses is served with a petition for legal separation or divorce. Community property principles apply to a variety of assets, including:
- Real estate
- Stocks and bonds
- Retirement accounts
- Pension accounts
- Personal property
Under this framework, the court considers that each spouse has an equal stake in the division of their property. The court does not make adjustments based on one spouse working outside the home and the other spouse caring for the children. Both spouses are seen as equal contributors. If the couple entered into a valid prenuptial agreement, this presumption can be overcome if they both voluntarily agreed to a different arrangement.
The parties may own separate property that is not subject to division. Separate property includes:
- Property owned prior to the marriage
- Income, profit or rent earned from separate property
- Purchases made with separate property
- Property owned after a petition for separation or divorce has been served
- Certain portions of personal injury awards
- Federal benefits
- Professional degrees or licenses
Debts acquired during the marriage are presumed to be the debt of both spouses because they are presumed to be for the befit of the community. Spouses generally remain jointly liable for the debt if it is not paid prior to the separation or divorce decree being issued. If a spouse believes that the debt was not used for the community’s benefit, this spouse has the duty to show by clear and convincing evidence that this is not the case.
A divorce court does not have jurisdiction over creditors. Therefore, creditors can freely seek to enforce a debt even if the spouses agreed for only one of them to be responsible for it. However, the spouse who was not supposed to have to pay the debt can seek remedies from the court.
Authority of Court
The court has wide discretion in determining how to divide property and debt. Debts do not have to all be divided equally but, rather, certain debts may be assigned to each spouse in full such that each party is assigned a relatively equal amount of debt.
Contact a Family Law Attorney
Dividing property during a divorce can be a contentious process. Fortunately, an experienced Arizona family law attorney can help. He or she can try to negotiate a favorable property settlement agreement to prevent the court from making decisions regarding the spouse’s property and debt. A family law attorney who understands Arizona property division laws can help protect the client’s financial and legal interests.
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 Division of Property and Debts, or any other family law issue, please feel free to contact Steven H. Everts 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.