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Community property or separate property?

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What It Means and Why it Matters

Arizona has one of the highest divorce rates in the nation.  It is also a ‘community property law’ state.  Arizona residents who wish to end their marriage should have a full understanding of how the end of the marriage is going to affect their property rights, and financial status.

Under Arizona law, community property means that property acquired during a marriage is deemed to be equally shared by both spouses, and will be divided equally by the court when the marriage is dissolved.  This community property designation does not apply to any property each spouse acquires by inheritance or gift, unless there is co-mingling of the separate property with community funds.  For example, Husband receives money from an inheritance, and puts it in a bank account.  Wife adds her money to the account, so a court may have to determine how much is separate, and how much is community property.

Remember, that debts acquired by the spouses during a marriage will also be deemed as community property, since the law presumes that a mortgage, car loan, or credit card was used for the benefit of both spouses.  It is important to understand that while the spouses are bound to a property settlement made with the divorce decree, it does not apply to creditors.  While creditors cannot attach the separate property of one ex-spouse to pay community property debts, there are circumstances when one spouse may have to pay a debt, and seek reimbursement from the ex-spouse.

Separate Property

It’s a basic concept.  If you owned property before the marriage began, it does not become community property.  Anything you get from an inheritance or a gift belongs to you as an individual.  It is not community property.  Graduate or professional degrees, even if earned during the marriage, are not considered community property when the court begins to define and distribute property.

Honesty is the Best Policy

It’s tempting, but don’t hide or sell property so your soon to be ex-spouse won’t get any share.  Arizona takes great care to protect community property during the divorce (dissolution of marriage) process.  The petition contains an injunction that binds the petitioner once papers are filed with the court, and the respondent, once they are served with the petition.  It means neither spouse can hide property or assets from the other, or from the court.

Get Legal Advice, and Listen to It

There are many twists and turns to property law.  Some estates can be tenancy in common, while others are joint tenancy with rights of survivorship.  Each estate has a different rules about whether or not it can be attached by creditors.  You really need a good family lawyer who can help you survive the distribution of community property and plan for a future as a single adult or parent. If you have minor children, there will be decisions to reach about child support.  You need help to divide marital property and use your share to build a future.

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