You may have heard that Arizona is a community property state. What does that mean, however? Living in a community property state is unlikely to impact your day-to-day routine. There are times, however, when living in a community property state will have a great bearing on your life. Divorce is one such time. Living in a community property state is likely to influence how your property is divided during divorce. Let's take a closer look at how property is divided in a community property state.
Divorce under community property laws
In a divorce, Arizona courts look at two types of property. They are:
- Marital property
- Separate property
Arizona law defines marital property as any property a couple acquires over the course of a marriage, with some exceptions. Gifts, inheritances, and property one spouse acquires after filing a petition for divorce are classified as separate property. Property that spouses acquire before marriage is also considered separate property.
In a divorce, each spouse keeps his or her separate property. Marital property is a different story, however. In Arizona judges are required to presume that marital property, both assets and debts, are owned equally by both spouses. Therefore, Arizona judges in divorce will split all marital property equally. This does not mean that judges will force the sale of a home or other large assets to reach an equal division. Rather, judges will typically divide the property in such a way that each spouse receives half the value of the marital property.
Divorcing spouses are free to make alternative arrangements
It is important to understand that divorcing spouses still have latitude to divide their property the way they see fit. Judges will intervene and split marital property equally only if the parties are unable to reach an agreement. A prenuptial or postnuptial agreement that meets all legal requirements could also determine the split of marital property in the event of divorce.
Living in a community property state can have advantages or disadvantages. If you are considering divorce, it is crucial to understand how community property laws apply to your specific situation. A lawyer can provide valuable counsel.