Dividing up property during a divorce is probably one of the most contentious issues between spouses and the process can be much easier with the assistance of a qualified attorney. Divorce is stressful enough even without the frustrations of giving some of your belongings to a person you no longer wish to share your life with. Fortunately, a divorce attorney who understands Arizona property division laws can help alleviate your fears and frustration.
The most important things to realize about property division is that there a number of presumptions that the court will make. First and foremost, there is the community property presumption.
- Arizona is a community property state and the law presumes that any property or funds acquired during marriage will be the property of both spouses and will be divided equally among them. The “community” designation will be applied to all property acquired up to the time when one spouse files a petition for legal separation, dissolution of marriage or an annulment. Arizona Revised Statute 25-211.
- Community property can be cash, automobiles, homes, stocks, bonds, boats, debt, and in some cases, retirement or pension accounts.
- Both spouses will be regarded by the court as equal contributors to the community and thus each will be given a 50% stake in the division of the property. The actual dollar amount contributed by each spouse does not matter. For instance, a father who works and a stay at home mother will be considered equal in the eyes of the law despite the fact that the father earned the income that supported the community.
- The community property presumption can be overcome by a valid prenuptial agreement that sets forth a division of property that alters the 50-50 division rule.
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There are several other legal terms that you should be familiar with because they will play a role in many property division proceedings:
- Separate property: as defined in A.R.S. 25-213, separate property is all property owned before marriage or acquired individually after a petition to end a marriage has been filed. There are a few specific types of property that are considered separate property even if they are acquired during marriage. These include: inheritances; any income, profit or rent earned on separate property; purchases made with separate property funds, personal injury awards, professional degrees or licenses and federal benefits such as Social Security.
- Tenants in Common: this is one designation for ownership of property. If the husband and wife acquire the property as “tenants in common” they will each own an undivided one-half interest in the property.
- Joint tenants: this form of property allows a husband and wife to purchase property as joint tenants, and when one spouse dies, the property passes by a right of survivorship to the surviving spouse. The benefit of this type of property is that the property can pass without first going through probate proceedings.
- Quasi-community property: any property acquired outside of Arizona that would be classified as community property if the spouses had acquired it in Arizona.
Marital property that is not divided by the court during divorce proceedings will be held by you and your ex-spouse as tenants in common.
Am I responsible for the debts of the other spouse?
Arizona law generally holds that a separate debt of one spouse may not be fulfilled by the separate property of the other spouse. This is because the community property share of the indebted spouse can be used to satisfy their separate debts that were incurred prior to the marriage. Under the quasi-community property doctrine, a debt incurred outside of Arizona can be fulfilled with their community property if the debt would have been incurred on behalf of the community (both spouses) in Arizona.
You are quite likely to be responsible for debts incurred during the marriage because they are presumed to be for the benefit of the community. So, if a joint debt is not settled within the divorce decree, you will remain jointly liable for it. It is important that you consult with a family attorney because it may be in your best interest to pay the debt and then seek reimbursement from the other spouse later on. This is known as indemnification. It may also be possible for you to bring an action compelling the other spouse to contribute to the payment of the debt.
Can I sell any property to pay bills during the divorce?
In some cases, a spouse will attempt to sell or otherwise dispose of property in order to keep it from the other spouse. This is wrongful and the court will attempt to prevent such “bad faith” actions. In Arizona, every action for a divorce or legal separation contains a preliminary injunction that provides a legal barrier to the wrongful sale, destruction, concealing or transferring of property that rightfully belongs to both spouses. Under A.R.S. 25-315, the court can enforce many remedies against a spouse that has violated the injunction including contempt and damages.
What if we owned a small business prior to the divorce?
Business valuation during a divorce can be one of the most divisive factors in settling each spouse’s property claims. There is the “goodwill” value of the business that must accounted for, in addition to the actual value of the business’ assets. If it is clear that only one spouse can run the business or that only one spouse wants to run the business the court will likely award the business to them. However, the other spouse will be entitled to compensation and a reasonable rate of return on any investment they made in the business. Business valuation, like any other property division issue, can be quite complicated.
If you are considering a divorce or are in the midst of a divorce, it is never too late to seek the advice of a well respected divorce attorney. They can provide invaluable guidance that will help you protect your assets and maximize the property you are allowed to retain. Attorney Judd Nemiro has a thorough understanding of these issues and he can help you. Call his office today for a consultation!