Arizona’s Community Property System and How It Works

For many Arizonans there seems to be an overwhelming number of family legal issues to address before a divorce can be finalized. One of the most important amongst them is property division. Understanding how property is divided during a divorce in Arizona is imperative to an individual’s divorce strategy and post-divorce life planning. Therefore, it may be pertinent to briefly discuss Arizona’s community property system and how it works.

In the U.S., there are two types of property systems: community property and equitable distribution. In an equitable distribution state, property is considered to be owned by the spouse who earned it. Therefore, when a divorce occurs, property is divided equitably or, in other words, fairly. Courts consider several factors in deciding how to divide property, and it does not always come out to an equal 50/50 split. Arizona does not follow this system.

Instead, Arizona utilizes the community property system. Here, spouses share equal ownership in all assets acquired during the marriage. This means each spouse has a 50 percent ownership in all cars, houses, personal belonging, and wages earned during the course of the marriage, even if only one spouse works. It is worth noting that equal ownership also applies to debts, including mortgages and credit card debt. Therefore, upon dissolution of a marriage, parties in a community property system may see more of a 50/50 split in property division than someone in an equitable distribution state. However, sometimes a court will look to other factors to reach a more equitable outcome.

Separate property, on the other hand, is not subject to property division in a divorce. Separate property is anything that was owned by one party prior to the divorce, inheritances received during the marriage, gifts acquired during the marriage, and personal injury proceeds. However, there is always a chance that these assets will be co-mingled and will become quasi-community property.

Property division can be a fairly complex issue. Therefore, it may be best to speak with a family law attorney who can help clarify the process and provide advice on how best to proceed.

Source: Findlaw, “Community Property Overview,” accessed on Aug. 2, 2014