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Complex Property IssuesAlthough Arizona is a community property state, complex property issues can often arise in divorce and legal separation proceedings. For example, what happens if one spouse received inheritance monies during the marriage and placed those monies in a jointly held bank account with the other spouse? What if one spouse owned a piece of real property before the marriage but since the marriage the two spouses have spent money improving that property? Is the property now community or is it still sole and separate? Can the other spouse be reimbursed for the cost of the improvements? What if the spouses purchased real properly during the marriage but the title is only in one spouse’s name? The Arizona statutes define what community property is and what separate property is but do not clearly address some of the more complex property issues. The experienced family law attorneys at Fruchtman, Wilenchik & Larson are familiar with both statutory and case law and can answer questions about all your complex property issues and often times these questions can be answered at an initial consultation. The following are statutory definitions of community property and separate property. Community property is defined as all property acquired by either the husband or wife during the marriage except for property that is: 1. Acquired by gift, devise or descent (inheritance). 2. Acquired after service of a petition for dissolution of marriage, legal separation, or annulment if the petition results in a decree of dissolution of marriage, legal separation or annulment. The spouses have equal management, control and disposition rights over their community property and have equal power to bind the community, which means that either spouse separately may acquire, manage, control or dispose of community property or bind the community, except that joinder of both spouses is required in any of the following cases: 1. Any transaction for the acquisition, disposition or encumbrance of an interest in real property other than an unpatented mining claim or a lease of less than one year. 2. Any transaction of guaranty, indemnity or suretyship. 3. To bind the community after service of a petition for dissolution of marriage, legal separation or annulment if the petition results in a decree of dissolution of marriage, legal separation or annulment. Separate property is a spouse’s real (real estate) and personal property (vehicles, furniture, etc.) that is owned by that spouse before marriage and that is acquired by that spouse during the marriage by gift, devise or descent, and the increase, rents, issues and profits of that property. Property that is acquired by a spouse after service of a petition for dissolution of marriage, legal separation or annulment is also the separate property of that spouse if the petition results in a decree of dissolution of marriage, legal separation or annulment. In a divorce or legal separation proceeding, it is the Court’s function to assign each spouse their sole and separate property and to divide the community property equitably, though not necessarily in kind ( meaning not every account has to be divided equally, property offsets can be made), without regard to marital misconduct. Generally, an equitable division of property is interpreted to mean a substantially equal division.
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