How Must Divorcing Spouses Divide Their Assets in Arizona?

by | Nov 1, 2020 | Divorce

When you get divorced, you have to divide your assets with your spouse. This is true regardless of how much you own, and it is true regardless of how long you have been married. Unless you have a prenuptial or postnuptial agreement that says otherwise, you must divide your marital assets as required by law when you get divorced in Arizona.

5 Important Facts about Property Division in Arizona

But what specifically does Arizona law require? As we have discussed previously, Arizona is a community property state. This means that divorcing spouses must divide their “community” assets equally (in most cases), although there are various means for achieving an equal (or alternate) distribution. If you are contemplating a divorce, here is an overview of what you need to know about dividing your community assets per Arizona law:

1. An Equal Distribution of Community Assets is Required in Most Cases

Arizona law requires a fair (or “equitable”) distribution of divorcing spouses’ community assets, and, in most cases, this will mean a 50-50 split. This is true regardless of the spouses’ respective financial contributions. Additionally, Arizona’s divorce law specifically states that spouses’ community assets must be divided “without regard to marital misconduct.” As a result, unless there is a compelling reason why an unequal distribution of community assets is justified, divorcing spouses can generally expect to divide their community assets down the middle.

When might an unequal distribution of community assets be justified? “Community waste” is one example. If one spouse has wasted community assets (i.e., by gambling them away), then it may be appropriate for that spouse to receive a lesser share of the couple’s remaining community assets in their divorce. There are various other examples, and your divorce attorney will be able to explain whether you may be entitled to more (or less) than half of your community estate in your divorce.

2. An Equal Distribution Does Not Necessarily Mean Splitting Everything Down the Middle

Even when an equal distribution is fair, this does not necessarily mean splitting everything down the middle. This is one of the most common misconceptions people have about the divorce process. While it might make sense to split certain assets (i.e., a bank account or investment portfolio), it will generally make sense to divide other assets through alternate methods.

One of the simplest ways to divide community assets is for each spouse to agree to keep certain assets while giving up their right to others. For example, one spouse could keep one car, and the other spouse could keep the other. Or, the spouse who will be remaining in the family home could keep the couple’s existing furniture, and the other spouse could receive a larger share of the couple’s cash holdings from purchasing new furnishings for his or her new home.

When dividing community assets, community debts will come into play as well. For example, in many cases, the family home will be a couple’s primary asset, and all of the couple’s other assets combined will not add up to equal the home’s value. Assigning the mortgage to the spouse who will keep the home (assuming the bank approves) can provide greater flexibility for distributing the couple’s community estate’s remainder.

3. If You Have “Separate” Assets, These Assets are Not on the Table in Your Divorce

So far, we have been talking about “community” assets. These are assets that Arizona law considers to be owned equally by both spouses, and most assets acquired after the date of marriage fall into this category. However, it is possible – and in fact likely – that each spouse will own various “separate” assets as well.

Unlike community assets, separate assets are not subject to division in a divorce under Arizona law. Your separate assets are yours to keep, and of course, the same goes for your spouse. With this in mind, it is essential to work with your divorce attorney to identify your separate property accurately—and to carefully assess your spouse’s claims to separate property as well.

4. Separate Assets Can Become Community Assets if Not Managed Appropriately

As a general rule, assets acquired before the date of marriage qualify as separate property. Other assets that generally qualify as separate property include (but are not limited to) gifts between spouses and inheritances received by a single spouse. However, if commingled with community assets, assets that were once separate can be transformed into community property. Using community assets to improve or increase the value of separate assets (i.e., fixing up a house that one spouse owned before the date of marriage) can also create questions regarding whether and to what extent the original asset may be subject to division in the couple’s divorce.

5. If You and Your Spouse Can Work Together, You Can Arrive at a Mutually-Agreeable Resolution

When getting divorced in Arizona, spouses have the option to let a judge make decisions for them, but they also have the option of finding a way to come to terms. In most cases, this latter approach will be more cost-effective, but it will also produce a more palatable result for both parties.

Divorcing spouses have a few different options when it comes to dividing their community assets without court involvement. Negotiating is an option, and it can be a very efficient option when both spouses are willing to come to the table with open minds. When there are issues that need to be resolved, mediation can be a good alternative. The collaborative divorce process allows spouses to rely on outside professionals’ help while still retaining final decision-making authority.

Are You Contemplating a Divorce? Contact Us for a Free Consultation in Tempe, AZ

If you are contemplating a divorce and would like to know more about what you can expect from the process, we encourage you to contact us for a free consultation. To speak with a Tempe and Phoenix divorce lawyer at Weingart Family Law in confidence, please call 480-542-0099 or inquire online today.