After a legal separation, divorce or annulment, the formerly married couple has to deal with the issue of who gets what. In an uncontested divorce, the couple may be able to agree how to divide property, debts and assets. However, in most cases, property division can be a source of disagreement, anger, and frustration. Even if the couple does agree on property division, it is up to the courts to ultimately sign off on property division in a divorce.
Community Property in Arizona
Arizona is a community property state. This generally means that most property acquired during a marriage becomes the community property of both spouses equally. Community property is built on the idea that a marriage is a partnership. Each spouse is considered to be contributing to the marriage through labor for the benefit of not only the marriage but for the community as well. As a result, each spouse has a 50% interest in all of the property, regardless of who actually acquired the property. By the same account, debts are considered to be equally shared by the couple.
Under Arizona law, spouses become subject to the state’s community property laws when they are married and domiciled in the state. Community property only terminates upon the change of domicile, divorce or legal separation, which causes assets acquired after that date to no longer be considered community property.
Even after a couple is married in Arizona, they may still have separate rights to some property, such as that acquired before the marriage, or through a gift or inheritance. Additionally, appreciation in value of separate property remains with the individual spouse unless community property funds or the spouse’s labor are used to improve the property. If this is the case, then the other spouse has some right to reimbursement.
Distribution of Property
The distribution of property is part of the legal process of seeking a divorce or legal separation. A final decree will be entered after the court has considered and approved the disposition of property. A.R.S. § 25-312.
After years of marriage, a couple can amass a significant amount of property. It may only be when they consider how to distribute the property that they realize just how much they have. While certain things like the clothes of each spouse may be simple to distribute, there are many things that each spouse may want, that are impossible to be divided. In these situations, where the couple cannot come to equitable terms for distribution, the court may determine who gets what type of property, or whether to require the couple to sell the property, and divide the money received.
There are a number of kinds of property a couple must consider in anticipation of divorce or separation. These include:
Second or Vacation Homes
Antiques and Collectibles
Gifts to the Married Couple
If the couple can work together, or through divorce mediation or arbitration, they may be able to resolve many of the property issues without having to leave it up to an unpredictable determination by the court. They may sign a Marital Settlement Agreement, which includes how the parties agree to divide the property. If the couple comes to an agreement, or if the judge thinks the Marital Settlement Agreement is unfair, the court may make an order indicating how the property will be divided.
In deciding how property is divided, the judge may look at a number of factors to determine who should receive certain items. This may include considerations of the status of the property before marriage, whether children are involved and their interest in the property, or where the individuals plan to reside after separation.
As an example, it is not practical to put walls up in the couple’s primary residence and force each person to stay on one side or the other. If the couple has children, the judge may rule that the parent with primary parenting time gets to keep the house, if it would be in the best interests of the children involved. Alternatively, the judge may require the couple to sell the home, and divide the proceeds.
Prenuptial and Postnuptial Agreements
The default distribution of property under state law can be altered through the use of a valid agreement signed by both spouses prior to divorcing. If the agreement is entered into before getting married, it is considered a prenuptial agreement. If entered into after marriage, it is considered a postnuptial agreement.
Under the Arizona Uniform Premarital Agreement Act a “premarital agreement” is defined as “an agreement between prospective spouses that is made in contemplation of marriage and that is effective on marriage.”
While a couple cannot make an agreement that limits child support through a prenuptial agreement, couples can make agreements on spousal support and how to divide property in the event of separation. This includes the rights and obligations of each spouse in any property, the disposition of property, life insurance benefits, or the making of a will or trust.
Postnuptial agreements are similar and are often made between spouses to settle an issue involving property. These agreements can include separating the individual property of each spouse, such as income, real estate, and debt.
If an agreement is signed in writing, entered into voluntarily, and does not violate public policy considerations, it will generally be enforced by the court. Modifications and changes to the agreement must be signed by both parties.
It may still be up to the judge to approve the terms of an agreement made to alter the distribution of property on separation or divorce. This is why it may be important to consult with your attorney to address all potential issues and make sure the agreement will be enforced.
Tucson Property Division Lawyers
At West, Elsberry, Longenbaugh and Zickerman, our divorce and separation attorneys are here to help individuals and families throughout Tucson with their family law legal issues. We will work with you and advise you on your options for a property division and distribution of assets. Our team of lawyers are committed to addressing the individual needs of each of our clients and can assist you with all aspects of a separation in order to protect your assets.