Asset and Debt Division

Arizona is a community property state. That means that generally, property and debt acquired during the marriage is the property of the marital community unless the property was acquired by gift or by inheritance. Each spouse has a ½ interest in their community property, regardless of whose name is on the property or debt.  Property or debt acquired before the marriage and property acquired during the marriage by gift or inheritance is generally considered the sole and separate property (and/or debt) of the individual spouse. 

Courts generally award each spouse their sole and separate property and debts and divide equally the community property and debts.  Property can include real estate, personal property like furniture, vehicles, etc., or it can include intangible property like wages, business interests, bank accounts, stock, retirement accounts, and so forth.  

Categorizing property as separate or community can get complicated when property has been commingled, when a spouse has been added to the title of a separate asset, when a spouse has disclaimed a community property asset, or when community funds have been used to pay for separate property debt. These issues can be technical and the facts should be discussed with an attorney to better understand how they will be treated in a divorce. 

The marital community, for property purposes, is terminated when one spouse is served with a petition for dissolution or legal separation. Each party’s new income and new debt going forward after the date the court papers are served is each spouse’s sole property and debt.