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What is community property?

On Behalf of | Oct 5, 2019 | Uncategorized |

If you are preparing for divorce, you may have heard that Arizona is a community property state. It may not be immediately obvious what that means. However, it could affect your divorce outcomes.

Part of the divorce process involves evaluating assets and debts. Those assets and debts must then be divided between you and your spouse. In the United States, there are two ways that assets and debts can be divided in divorce. Understanding the way they are divided in Arizona can help you better prepare for this process.

What are the two ways to divide property?

Most states are equitable distribution states. In these states, marital assets are divided based on what a court considers fair. This does not necessarily mean that a court will divide assets and debts equally.

The way a court will divide marital property can depend on many factors. Some of those factors may include each spouse’s earning potential, each spouse’s post-divorce financial situation and each spouse’s contribution to the other spouse’s earning potential.

However, Arizona is one of nine community property states. In community property states, marriage makes two spouses one legal community. This means that both spouses have equal ownership over community property, so these assets and debts are often divided as equally as possible in divorce.

What counts as community property?

Generally, all assets and debts that you or your spouse accumulated during your marriage is community property. However, there are a few exceptions.

An item may not be community property if it was a gift given to only one spouse or if it was acquired after a spouse was served a divorce petition. Property that is not community property is called separate property. Separate property also includes any asset or debt that one spouse owned before marriage and any profits that came from that property.

Often, spouses have the most control property division when they can work together to achieve their own agreement. However, sometimes spouses cannot reach a fair agreement. Having the right legal assistance from the start can help ensure you understand what is fair in your situation. It can also help you be prepared in case a court must ultimately decide how your property gets divided.