Property division is one of the most complex aspects of almost any Arizona divorce. You may believe that you do not own a lot of property so the process will be simple, but once the divorce gets underway, you could realize you own more than you thought.
The first step in the property division process is identifying your property as community or separate property. You must then do the same with debts.
Community and separate property
Generally, community property is property that you purchased during your marriage, with some exceptions. The exceptions include property received by gift or inheritance or property acquired after the filing of a divorce petition.
Separate property is property that you owned before your marriage that you have not mixed with any other community property.
Separate property that mixes with community property typically becomes marital property. For example, if you have a separate bank account in only your name, but during your marriage you made a couple transfers of money from that account to a joint account, your separate account could now be considered community property.
The same rules apply to debts. Once you have your assets and debts properly identified, they must be valued.
Valuing and dividing property
This is easy enough to do with assets such as bank accounts. You can typically use the balance of the account on the date the divorce was filed.
Valuing becomes more difficult when it comes to figuring out how much equity is in a home or how much of a retirement account’s value is community property.
The final step is dividing the community property under Arizona’s community property laws.
The law states that community property must be divided equitably, or fairly, without regard to marital misconduct. Dividing community property equitably does not necessarily mean equally, although an equal division is often assumed to be fair.
When an unequal division of property may be awarded
Many people wonder if their spouse’s bad behavior, such as infidelity, means they will receive a greater share of community property in the divorce.
It usually does not, unless there are some circumstances that would justify an unequal property division. If evidence showed that a spouse spent marital funds on hotel rooms to meet with someone that they were having an affair with, an argument could be made that the other spouse should receive additional community assets to make up for it.
Another situation that could justify an unequal division of community property involves dishonesty. Both spouses are required to list their assets and debts and provide an accurate value for each.
A spouse who is found to have lied or refused to provide this information could be penalized by a court. The spouse may be required to turn over additional assets or pay a sum of money to the other spouse.
Sometimes there is no way to fairly divide the community property. When this happens, a court typically orders an equalization payment to be made from one spouse to another.
Since coming up with a large sum of money immediately is difficult for many people, the court can order the money to be paid as small payments over time or set a deadline for the entire sum to be paid.