While marriage is regarded as a joint economic enterprise in a community property state, there may still be disagreements about how asset division is carried out in practice. The Tempe family law attorneys at Blake & Pulsifer, PLC can represent you in your divorce proceedings and protect your rights under the law.

Asset division is often a contentious issue in a South Tempe divorce. Arizona is a community property state, which means that marital property is usually divided between the spouses on a 50/50 basis. While this law seems clear on the surface, in reality, there are still difficult disagreements between the spouses about asset division issues.

When you are going through a divorce, you must be legally proactive to protect your rights at all times. You can begin doing this by scheduling an appointment with a Tempe divorce lawyer at (480) 838-3000.

How Community Property Laws Work in Arizona

Before a couple can finalize their divorce, they must either agree on all issues or a judge must decide areas in which there is a dispute. Asset division is a common reason why two spouses may not be on the same page. While the community property laws in Arizona mandate that marital property be divided equally, there may still be tough issues to navigate before the court grants the final divorce order. 

What community property means is that every asset that has been acquired by the couple during their marriage is presumed to be divided equally between the spouses. There are exceptions, however, including assets acquired by gift or inheritance. Disputes typically occur over how a specific asset is characterized (community or separate) and whether the asset was comingled or “gifted” to the community. Community property is about more than just money. In addition to income that was earned during the marriage, the following is typically included in community property that is subject to division: 

  • Contributions to retirement accounts
  • Real estate that was acquired by the couple
  • Businesses that were started during the marriage
  • Debts that were incurred during the marriage

Challenges You May Encounter When Community Property Laws Apply

Community property laws present difficult issues, especially when each spouse may have had the opportunity to build their own assets and save prior to the marriage. Property that was owned before the marriage is generally separate property, and it is not subject to division. However, there may be issues because any increase in value in that property that occurred during the course of the marriage, caused by a party’s contributions during the marriage, may be subject to division. If there is a significant amount of separate property, there may be disputes that require testimony from a forensic accountant because spouses may disagree about both the valuation and how much it may have increased during the marriage. Further, there may also be complex issues regarding whether separate assets have been commingled with community property that could also lead to conflict. 

Marital debt is also a very important consideration in asset division. Each spouse is equally responsible for the debt that was incurred during the marriage. However, there may be special issues that arise for certain types of debts and the circumstances in which they were incurred. Student loan debt is often a contentious issue in a community property state like Arizona. Theoretically, student loan debt should be divided equally between the spouses. In practice, a court may depart from the general rule and apply the debt to one spouse alone because they were the one who received the education. 

Although marital property may be subject to an equal division, it does not mean in practice that the spouses will split every single asset down the middle. For example, it may not make sense to equally divide a house where two spouses cannot live together, even if each would have an equal ownership interest. Accordingly, when community property law applies, spouses may engage in the trading of assets. It is not uncommon for a divorcing couple to agree to give one spouse a larger share of a financial asset, such as a retirement account, in exchange for their Equity interest in the marital home. However, when doing so, it’s important to consider the tax consequences and accompanying tax burdens associated with some types of accounts vs others. 

You Need an Experienced Family Lawyer to Protect Your Interests

The numerous complexities involved in the practical application of the community property law make it crucial that you hire an experienced family law attorney to represent you in your case. You will still need to negotiate a marital settlement agreement that details the exact division of the assets. Legal rights will still need to be protected because spouses may argue that certain property should be considered separate or that they should retain full possession of an asset they covet, such as the marital home. 

Reach Out To A Tempe Divorce Law Firm

Get clear answers about the law in Arizona and how it applies to your situation by scheduling an appointment with a Tempe family law attorney at Blake & Pulsifer, PLC. You can speak with one of our lawyers by filling out an online contact form or by calling us today at (480) 838-3000.