Tempe Property Division Lawyer
A Tempe property division lawyer at Strong Law can help you identify, value, and divide the assets and debts involved in an Arizona divorce. Property disputes can involve much more than deciding who keeps the house. Retirement accounts, businesses, investments, premarital assets, debts, reimbursements, and claims involving separate property can substantially affect the final financial result.
Strong Law represents clients in Tempe and throughout Maricopa County in divorce and property-division matters. If you have questions about what may be community property, what may remain separate, or how a particular asset should be handled, call 602-492-6080 or request a consultation below.
Request a Free Telephone Consultation
How Property Division Works in an Arizona Divorce
Arizona is a community-property state. As a general rule, property acquired by either spouse during the marriage is community property, subject to important exceptions. Property owned before marriage, and property received individually by gift or inheritance, is generally separate property.
Under A.R.S. § 25-318, the divorce court assigns each spouse his or her separate property and divides community property equitably. That does not necessarily mean physically cutting every asset in half. One spouse may receive one asset while the other receives different property or an equalization payment.
Determining which category an asset falls into can become complicated when separate and community funds have been mixed, an asset changed in value during the marriage, or community money was used to pay expenses associated with separate property.
Community Property Versus Separate Property
The date and manner in which property was acquired are often critical.
Examples of property that may be community property include:
- Income earned during the marriage
- A home purchased during the marriage
- Retirement benefits earned during the marriage
- Bank and investment accounts funded with marital earnings
- Business interests created or increased through community efforts
- Vehicles and other property purchased with community funds
Separate property can include:
- Property owned before marriage
- An inheritance received by one spouse
- A gift made specifically to one spouse
- Certain property acquired after service of a divorce or legal-separation petition
The label on an account or title is not always the end of the analysis. Tracing the source of the funds and determining what occurred during the marriage may be necessary.
What Happens to a House Owned Before Marriage?
A premarital home does not automatically become community property simply because the parties marry.
However, the analysis may become more complicated if community earnings are used during the marriage to reduce the mortgage principal or improve the property. In some circumstances, the marital community can acquire an equitable lien or reimbursement claim against a spouse’s separate real estate.
These cases can require information concerning:
- The home’s value when the marriage began
- Its value at the relevant date during the divorce
- Mortgage balances
- Principal payments made during the marriage
- The source of funds used for improvements
- Refinancing or title changes
- Any disclaimer deeds or other agreements
A property that is clearly titled in one spouse’s name can therefore still generate a significant property-division issue.
Dividing the Marital Home
When a residence is community property, several outcomes are possible.
The spouses may agree that one person will keep the property and compensate the other for that person’s interest. The house may instead be sold and the proceeds divided. In some cases, the parties may temporarily continue owning the property together.
Important questions can include:
- Current fair-market value
- Mortgage and other liens
- Separate-property contributions
- Refinancing ability
- Sale costs
- Reimbursement claims
- Whether an equalization payment is required
A professional appraisal may be appropriate when value is disputed.
Retirement Accounts, Pensions, and Other Benefits
Retirement benefits accumulated during marriage can represent one of the largest assets in a divorce.
Property division may involve:
- 401(k) accounts
- 403(b) accounts
- Pensions
- IRAs
- Government retirement systems
- Deferred compensation
- Military retirement benefits
The entire account is not necessarily community property simply because the divorce occurs while the account exists. When an account includes both premarital and marital contributions, the community portion may need to be calculated.
Many employer retirement plans require a Qualified Domestic Relations Order (QDRO) to divide benefits. Other retirement systems use different procedures. The language in the divorce decree and any later retirement order should be coordinated carefully so the intended division can actually be implemented.
Business Interests in Divorce
Business ownership can make property division substantially more complicated.
The questions may include whether the business itself is community or separate property, whether the community acquired an interest in the growth of a separate business, and what the business is worth.
Depending on the case, valuation may require consideration of:
- Financial statements
- Tax returns
- Business assets and liabilities
- Owner compensation
- Cash flow
- Goodwill
- Ownership agreements
- The contributions of either spouse during the marriage
An accountant, business appraiser, or other financial professional may be needed in higher-value or disputed cases.
Hidden Assets, Waste, and Unusual Spending
Property division is not limited to simply listing the assets that remain at the end of the marriage.
Arizona law permits the court to consider certain conduct involving community property, including excessive or abnormal expenditures, destruction, concealment, or fraudulent disposition of property.
If there is concern that a spouse has hidden or dissipated assets, relevant evidence may include:
- Bank statements
- Credit-card records
- Business records
- Tax returns
- Brokerage statements
- Transfers between accounts
- Large cash withdrawals
- Unusual purchases
- Transactions involving relatives or third parties
Early financial disclosure and careful review of the records can be particularly important in these cases.
Dividing Debts in an Arizona Divorce
Debts can be just as important as assets.
The divorce court can allocate responsibility for community debts between the spouses. But a divorce decree generally does not alter the contractual rights of a creditor that was not a party to the divorce.
For example, if both spouses remain legally obligated on a mortgage or joint credit account, a family-court order requiring one spouse to make the payments does not necessarily prevent the creditor from pursuing the other spouse if the debt is not paid.
That is why property settlements sometimes need to address refinancing, sale of secured property, account closure, indemnification provisions, or other methods of reducing future financial exposure.
Documents That Can Help in a Property-Division Case
It is useful to begin gathering financial records early. Depending on the issues, relevant documents can include:
- Recent tax returns
- Bank statements
- Retirement-account statements
- Brokerage statements
- Mortgage statements
- Real-estate deeds
- Vehicle titles
- Credit-card statements
- Loan documents
- Business tax returns and financial statements
- Prenuptial or postnuptial agreements
- Records showing when an asset was acquired
- Records showing the source of premarital or inherited funds
When a separate-property claim depends on tracing money over many years, older records can become especially important.
Can Spouses Agree on Their Own Property Division?
Yes. Many divorcing spouses resolve some or all property issues through negotiation, mediation, or a written settlement agreement rather than asking the judge to decide every item.
Settlement can provide more flexibility than a contested ruling. For example, the parties may agree that one spouse keeps the house while the other keeps a larger portion of another asset.
An agreement should still be drafted carefully. Property provisions in a final divorce decree can have significant and sometimes difficult-to-reverse consequences.
Frequently Asked Questions About Property Division in Tempe
Is everything automatically divided 50/50?
Arizona is a community-property state, but the legal analysis is more precise than simply dividing every individual asset in half. The court must identify separate and community property and divide the community estate equitably. Different assets can be allocated to different spouses as part of the overall division.
Does property in only one spouse’s name belong only to that spouse?
Not necessarily. Title can be important, but the character of property may also depend on when it was acquired, how it was acquired, the source of the funds, and what happened to it during the marriage.
Can I keep a house I owned before marriage?
The house may remain your separate property, but community contributions during the marriage can create additional claims. A detailed analysis may be required when community earnings paid mortgage principal or funded improvements.
What happens if my spouse is hiding money?
Financial disclosure and discovery can be used to obtain records and investigate assets. Arizona law also allows the court to consider concealment, fraudulent disposition, and certain excessive or abnormal expenditures of community property when dividing the estate.
Who gets the retirement accounts?
The community generally has an interest in retirement benefits earned during the marriage. The exact division depends on the type of account, when the benefits accrued, and whether part of the account is separate property.
Talk With a Tempe Property Division Lawyer
Property division can have consequences long after the divorce decree is entered. Before agreeing to a settlement or preparing for trial, it is important to understand what property exists, how it is characterized, what it is worth, and what claims either spouse may have.
Strong Law represents clients in Tempe and throughout Maricopa County in property-division disputes involving real estate, retirement benefits, businesses, separate-property claims, debts, and other financial issues arising from divorce.
Call Strong Law at 602-492-6080 or use the form below to request a consultation.