What Is Community Property and Why Does It Matter in a Divorce?

If you are getting a divorce in Arizona, you may be wondering why we’re known as a “community property state.” This is because we’re one of only a few states that have organized marital property this way. Most states use an “equitable distribution” model.

You may never have considered who owns precisely what during your marriage, but the issue will need to be decided in any divorce. In the community property model, virtually all of the property you acquired during the marriage belongs to the marital estate, except for property that is obtained by gift, devise or descent. That essentially means that gifts and inheritances are excluded from the marital estate.

In other words, anything you bought during the marriage, along with any debt, is part of the community property. This includes property that is listed in only one person’s name, such as a car with only one person on its title or a credit card taken out in only one person’s name.

Property you had before you entered the marriage is generally considered your separate property, along with any increase in its value during the marriage.

Once it has been determined what constitutes the community property of the marriage, the next question is how to divide the community property. This can be done by negotiation or mediation between the spouses or divided by the family court. The court has great discretion in dividing community assets and debts. It does not have to be divided equally, only “equitably.”

That means there could be arguments about whether a certain asset or debt is part of the community property and also about who gets to keep a particular piece of property.

If you have questions about whether a specific piece of property or debt should belong to the marital estate or how to divide community property, discuss them with your divorce attorney.