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A Spouse May Not Unilaterally Change Joint Property to Community Property

Posted on : September 12, 2016, By:  Christopher Hildebrand
A Spouse May Not Unilaterally Change Joint Property to Community Property

A Spouse May Not Unilaterally Change Joint Property to Community Property

In Arizona, all property acquired by a couple after marriage is presumed to be community property. However, a couple can formally agree to hold real property as joint tenants.

Can one spouse decide to reconvert the joint property to community property without the other spouse’s consent? In Russo v. Russo, 298 P.2d 174 (Ariz. 1956), the Arizona Supreme Court addressed this question.

Facts of the Case

Husband and Wife were married and lived in Arizona. They held certain real property in joint tenancy. In their divorce action, husband asked the trial court to partition this property. However, during the divorce, Wife tried to convert the property back to community property.
Spouse May Not Unilaterally Change Joint Property to Community Property
On the advice of counsel, she quit claimed the property to a third party who immediately conveyed it back to her. The court determined that this reconverted the property to community property. It awarded the property to Wife. Husband appealed.

A Spouse Only Owns 50% of Joint Tenancy Property

Wife testified that she and Husband agreed to change the property to joint tenancy. Then she claimed to reconvert it on her own. The Court noted that when spouses hold property as joint tenants, each owns his or her respective interest as separate property. The Court said it was “at a loss” to understand the trial court’s reasoning.

Obviously, the Court said, neither spouse can convey the other spouse’s separate real property. When Wife quit claimed to the third party, all she conveyed was her 50% interest. She could not legally convey Husband’s interest. It remained his separate property and the trial court cannot take it from him by calling it community property. The trial court should have partitioned this property.

Disposition

The Arizona Supreme Court reversed the trial court ruling. It ordered the trial court to partition the real estate the parties held in joint tenancy. It also ordered it to re-examine the distribution of community property. If this ruling makes the prior division inequitable, the trial court must adjust the division of community property.


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