Division of Divorce and Community Property

One of the biggest concerns and frustrations of couples seeking a divorce is the division of assets. Even this one question can cause additional conflicts in an emotionally charged process. Among the many aspects of divorce that state governments can regulate is the division of property and assets. In Arizona, the law governing disposition of property is Title 25 Marital and Domestic Relations, Chapter 318: Disposition of Property; retroactivity; notice to creditors; assignment of debts; contempt of court.

This law provides that the court in a divorce or separation proceeding may assign the sole property of either spouse to that spouse. The court can also divide any common property, which is why Arizona is called a “community property” state. The community property can include all assets and liabilities acquired from the beginning of the marriage to the effective date. Property acquired by either spouse outside of Arizona continues to be considered common property if the property would have been legally considered common property had it originally been acquired in Arizona.

The formal property and debt settlement between spouses is called a “marital settlement agreement” or “property allocation,” enacted by the Arizona Supreme Court. The division of assets takes place without regard to marital misconduct.

Debt is something that many people fail to take into account when thinking about separation of marital property. The court can consider all debts and obligations related to the property in its final judgments. Debt includes taxes (accrued or due) that are part of the sale of a property. There are specific exemptions for certain properties which are contained in Title 33 Property, Chapter 8: Homestead and Personal Property Exemption.

Note that the courts’ decision on the division of debts is binding on the spouses and not on the creditors. Because debt arises between individuals and creditors (i.e., banks, credit card companies, medical companies, retailers, etc.), the court’s decision does not necessarily relieve a spouse’s responsibility for performing the obligations under a debt.

If one spouse so requests, the court may grant a lien on the other spouse’s property to ensure payment of the debt that the court orders the spouse to pay. This can be done to ensure payment of certain types of debt, including:

• Share or share that a spouse has in property

• Joint debts to be paid by the spouses by the court

• Child Support

• spousal support

Title 25, Chapter 318 of Arizona Marital and Domestic Relations also allows the court to consider damages and judgments that resulted in a spouse’s criminal conviction. This refers to situations where the other spouse or child has been the victim of “abnormal expenditure, destruction, concealment, or fraudulent disposition of community, shared tenancy, or other common property.”

Any common property not included in the Settlement Provisions will be held in common property. This means that both spouses retain half ownership or interest in the property. In addition, in legal terms, the final decree or judgment will describe the property affected by the provisions (including prospective and retrospective uses of the property).

The complexity of dividing assets is not determined by the grounds on which the divorce is filed. Regardless of whether the divorce is contentious or contested, this decision is generally made on a 50/50 basis, except in exceptional circumstances. Because of the process and the potential for conflict, many spouses prefer to settle privately with the help of a divorce lawyer.