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Arizona is a community property state: What this means

Property division is an often highly contested part of the divorce. Missteps during this portion of the process have the potential to cost you dearly.

Since laws regarding the distribution of marital assets vary from state to state, it is important to understand how your state handles the matter. Arizona is one of only nine community property states in the nation, but what exactly does that mean?

Community property versus equitable distribution

Most states follow the rule of equitable distribution, meaning courts divide assets based on fairness rather than equality. While a judge may choose to split everything completely in half, this does not always occur. In a community property state, the judge divides anything deemed marital property, including debt, in half and awards an equal share to each spouse.

Community property versus separate property

Arizona generally defines community property as that acquired by the couple during marriage, irrespective of whose name it is under. A bank account or house with only one individual’s name on it still counts as community property if started or obtained after the union. The same applies to other assets such as wages earned by either person or during the marriage. Separate property consists of assets each spouse came into the marriage with and gifts or inheritances received from those who are not the other spouse. Individuals typically retain their separate property after divorce.

Comingling of assets may make it difficult for a judge to determine what counts as separate and community property. Processes like loan refinancing may also convert something previously considered separate property to marital property. As a result, property division may become complex in certain cases.