What’s Mine is Yours, and What’s Yours is Mine: A Primer on Community Property in Arizona
What is Community Property?Arizona law presumes that "all property acquired by either husband or wife during the marriage is the community property of the husband and wife . . . ." For instance, all money made and property purchased - real or personal - by either you or your spouse is part of the martial community after you and your spouse got married. Additionally, all debt incurred is also part of the community.
On a very basic level, all things acquired during the marriage are part of the martial community and both spouses have a right to them - including the debt. Thus, all of the money made by either spouse was made for the benefit of the community and should be split equally. This is usually an issue when one spouse made more money than the other. But, as stated above, the law presumes that this money was made for the benefit of the community and, therefore, it is part of the martial community.
How is a community created?In Arizona, a community is created upon marriage. This means that as soon as two people marry, they create a "marital community." The marital community is essentially everything made or spent for the benefit of the married couple.
What is Separate Property?Sole and separate property is essentially all property not part of the community. Arizona law defines separate property, basically, as the following:
(1) Assets owned before the marriage. This is exactly what it sounds like: if you bring property into the marriage (real, personal, or money), it is your separate property.
(2) Assets received during the marriage through gift or devise. If, during the marriage, you or your spouse received a gift or devise from a will, that is separate property.
(3) Assets received during the marriage that the other spouse disclaims an interest in. This can be accomplished by one spouse simply signing a disclaimer deed to the property which would make it separate property for the other spouse.
(4) assets acquired after service of the petition for divorce, annulment, or separation that results in a final decree. If the divorce is not finalize, however, the property acquired after the service of the divorce petition is community property.
When does the community end?The community ends when one spouse serves the other with divorce papers. As soon as the other spouse is served with divorce papers, all things acquired are separate property.
So, who gets what?As already stated, the majority of assets acquired during the marriage - including wages, property, investments, and benefits - are community property. The important thing to realize about community property in the divorce context is, if the couple cannot equally divide it, the court will likely force a sale of the community property. This is especially important to keep in mind when it comes to things such as houses.
As a reminder, this is just a basic explanation of community property. There are many more complex issues regarding property equalization, changing separate property into community property and the "tracing" of separate property if it is used for the benefit of the community. Subsequent articles will address these issues, but between now and then, if you have any questions you should call Berkshire Law Office and set up a consultation.