Arizona is among the few ‘community property’ states. This means that the court will divide equally any property you or your spouse acquired during marriage in the event of a divorce. Unlike ‘equitable distribution’ states, Arizona divorce law does not take into account how much each spouse contributed to acquiring the assets. Both you and your spouse own 50% of the marital property even if you worked while your spouse stayed at home.
Asset division can be confusing, and dividing marital property on a 50/50 basis can seem unfair to most people. Disagreement during asset division can make a divorce long, ugly, and exhausting. It is advisable to seek the help of a skilled Tucson divorce attorney to guide you through the process and help protect your rights.
Community vs Separate Property
Arizona law considers all marital property as community property, meaning it belongs equally to both spouses. Marital or community property includes everything a couple acquires during marriage, including real estate, motor vehicles, businesses, investment accounts, and retirement accounts. The law also considers debt accumulated in marriage as community property.
However, there are exceptions to the 50/50 ownership of marital property, including property that one spouse acquired before marriage. Other exceptions include property that one spouse acquires as a gift or inheritance, and property that one spouse obtains after the filing of the divorce petition. The law classifies all these exceptions as separate property.
In a divorce or separation, separate property is not subject to division. It remains the property of the spouse who acquired it. But, there are some instances where separate property can lose its separate nature by commingling with marital property.
For instance, if you entered a marriage with cash savings but used the funds to buy a marital asset, you may have unintentionally commingled separate and community property. In divorce proceedings, it can be difficult to prove that you intended the asset to be separate. A skilled Tucson divorce lawyer can help you navigate the complexities of community versus separate property.
What is Asset Division?
Asset or property division is a critical part of a divorce and includes the division and distribution of all tangible and intangible assets, including real estate, bonds, debts, mortgages, and bank accounts. In Arizona, the law allows spouses to agree on a divorce settlement, otherwise, the court divides the assets for them.
A divorcing couple can come up with a settlement agreement on their own or can involve a mediator. The process can involve one or a combination;
- Assigning specific items to each spouse. For instance, you can let your spouse take the house as you take the investment accounts.
- Selling all or some of your assets and the sharing proceeds.
- Agreeing to have one spouse ‘buy out’ the other’s share of the property or asset. This is common in co-owned businesses.
Even where spouses negotiate and agree on a settlement agreement, the court requires the agreement to be reasonably fair to both parties. In some instances and as part of a settlement agreement, a divorcing couple might decide to continue to co-own some assets or property even after divorce.
For instance, you and your spouse can agree to keep the family home until the children are grown up. But, continuing to own property together can be challenging for most people as it requires keeping a relationship with an ex-spouse.
Asset or property division consists of four major steps, including:
- Identification – The step involves identifying assets/property owned by the couple, including debts.
- Classification – involves classifying the assets as either separate or community property.
- Valuation – This step involves assigning monetary value to the marital property to subject to division.
- Division – This is the final step where the couple or the court divides and distributes the community or marital property.
Why You Should Have a Settlement Agreement
If you and your spouse can agree on the asset division process, including the values of your assets and debts, you will save time and money. You will also avoid unnecessary court fights that further strain your relationship. This is important especially if you have children together.
Leaving the entire asset division process to the courts can make a divorce long, costly, and emotionally exhausting. You and your spouse also lose control of the process. Typically, the court divides the marital property equitably, without any regard to what the divorcing spouses want.
For instance, you may want to ‘buy out’ your spouse’s share in a business you own together but the court will split the business 50/50 or approximately equal.
Asset division can complicate a divorce or a legal separation. Besides divorce and legal separation, asset division is also useful when creating a prenuptial or a postnuptial agreement. It is important to seek the help of a qualified asset or property division lawyer to help you navigate the complexities of asset division.
Working with a skilled asset division attorney provides the best chance to get the outcome you want or desire. An asset division attorney can help you and your spouse agree on a comprehensive settlement agreement before filing for divorce. Agreeing on contentious issues like asset division or child custody can help you have an uncontested divorce.
Contact a Tucson Asset Division Attorney
Whether you have a huge or a small estate, asset division in an Arizona divorce can be complex. Having a settlement agreement is favorable for both spouses. However, most divorcing couples can’t agree on how to divide marital property. The court has to divide the assets on their behalf.
The court process can leave you feeling cheated. Therefore, it is important to seek the help of a skilled and experienced Tucson property division lawyer. Our well-qualified and experienced divorce and asset division lawyers at RPM Law will help you protect your interests. We will ensure the property division process in your divorce is fair and transparent. Contact us today for a free consultation and to learn more about our services.
