Seasoned Arizona Lawyers Advise on Community vs. Separate Property

Attentive Scottsdale divorce attorneys manage division of property conflicts

Assets and debts may become intricately intermingled among married people, so teasing them apart can be complicated. Arizona is a community property state, which means that all property acquired by either spouse during the marriage is considered to be jointly owned. Upon a divorce, it will be divided approximately equally. However, there is also “separate property,” which is generally what a spouse owned before the marriage or acquired by gift or inheritance during the marriage. Our experienced attorneys at Clark & Schloss Family Law, P.C. in Scottsdale know how to identify property as community or separate in nature and to negotiate fair divisions of property upon divorce.

Knowledgeable lawyers protect property of divorcing spouses

Generally, in an Arizona divorce, the spouses endeavor to decide what property is jointly owned, what belongs to each spouse individually and how the property should be valued. If the parties can’t agree, the designation of property as community or separate will be made by the court. After excluding separate property, the court will divide community property equitably, though not necessarily in a 50-50 split.

There are multiple factors that affect whether property is considered separate and thus exempt from division upon divorce. These are the main types of property to be considered:

  • Real estate —Real estate owned by one spouse before marriage, or inherited individually during the marriage, is his or her separate property. This is also true of the property’s increase in value or any profit (such as rent) drawn from the property during the marriage.
  • Inherited wealth — Assets passed down through an inheritance or via a trust belong to the individual recipient. If these assets are deposited into a joint bank account, however, they may become community property.
  • Retirement accounts — Funds accrued in a retirement, pension or 401(k) account prior to marriage are individual property, whereas funds added after marriage are generally community property.
  • Joint property acquired before marriage — Arizona does not recognize common law marriage, so even if a couple lived together before marriage, the property they brought into the marriage may be divided into separate property. If both names are on certain property, such as a bank account or house title, each spouse has a claim to a proportionate share.
  • Legal settlements — Funds awarded in a personal injury lawsuit or settlement may be split into separate and community property. If damages are given for a plaintiff’s lost wages, they will likely be considered community property. But damages granted for an individual’s pain and suffering may qualify as separate property.

At Clark & Schloss Family Law, P.C., we conduct investigations aimed at ensuring that all property is disclosed and categorized. We are also skilled at helping a spouse work out a deal to buy out the other spouse’s stake in a community property asset to avoid a forced sale to accomplish equitable division.

Experienced Scottsdale attorneys advocate for fair debt distribution

Unless a previously established agreement states otherwise, one spouse cannot be made responsible for the other’s separate debt. Yet, as part of the division of marital property, community debt may be divided so that full responsibility for certain debts is given to only one spouse.

In most cases, loans and other debts of one party existing before marriage are his or her separate responsibility. Even payments during marriage on one spouse’s premarital obligations — such as student loans and taxes — can be considered separate property. Loans incurred during the marriage are generally community property, though exceptions may be made depending on how a loan was spent. If one spouse is found to have spent community money in a way that did not serve the best interests of both spouses, such as by buying gifts for a paramour, they may have committed “marital waste.”

We are adept at analyzing all debts in terms of their origin, history and use of proceeds to determine how they should be classified for purposes of division during divorce.

Advising on prenuptial and postnuptial agreements

We counsel our clients on the advisability and effect of a prenuptial or postnuptial agreement. If valid, these can override community property law by instructing how certain categories of assets and debts will be divided upon divorce. Prenups and postnups are common where one spouse or both bring high-value assets to the marriage that they want to keep in their names. They are also used to ensure the protection of inheritances for children from prior marriages, defeating the ability of the new spouse to deplete the property during divorce. In Arizona, a prenup is enforceable if it is in writing, signed by both parties voluntarily and based on a fair financial disclosure. A divorce court will usually enforce the agreement unless one spouse can show it was the product of fraud by the other.

Contact skilled Scottsdale property division attorneys for a consultation

At Clark & Schloss Family Law, P.C. in Scottsdale, we understand the basics and nuances of Arizona laws governing community property and separate property. To arrange a consultation with our office, call us at 602-789-3497 or contact us online. We represent clients in North Phoenix and throughout Maricopa County.