Table of Contents
Under Arizona community property laws, all earnings by either spouse during a marriage are presumed to belong to the community. If a spouse incurs a separate debt during the marriage, a creditor cannot collect the debt from community property. In the Martin v. Martin case, the parties signed a valid prenuptial agreement before marriage. That agreement provided there would be no community property during their marriage.
After their marriage, they entered into a new agreement, referred to as a postnuptial agreement, opting to transfer all of their property to community property. They appear to have done so to prevent creditors from collecting on a separate debt. So, were they successful? Well, that was the question raised in the case of Martin v. Martin, 752 P.2d 1026, 156 Ariz. 440 (1986).
The Award of Money: Facts of the Case
Mary and Richard Martin were married in 1950 and remained married for over 30 years. Richard effectively managed the money on his own and did not involve Mary in the couple’s finances. In 1979, the couple moved to California for Richard’s job. They also bought a home in Arizona as a retirement property. Mary moved into the Prescott home. Richard stayed alone in California for three years, sending Mary money for the mortgage and living expenses.
In 1982, Mary filed for a dissolution of marriage. The Court ordered Richard to pay Mary $1700 a month in temporary alimony during the case. The court also authorized him to remove that amount from the couple’s bank account every month.
After a trial, the family law judge divided the community property between the couple. The court awarded Mary property worth $184,843 to Mary and $215,211 to Richard. The judge also ordered Richard to pay Mary $2,000 per month for spousal maintenance.
The trial court also ordered Richard to pay Mary two sums, $46,688 and $9,473. The first represented 50% of the monies Richard earned during the three years of separation. The second sum represented amounts Richard withdrew from the community savings accounts. Those withdrawals were more than the amounts allowed under the court order.
Richard appealed the order. The Court of Appeals found that the trial court had no authority to give a spouse a money judgment. It sent the case back to the trial court to remove the $46,688 and $9,473 from the judgment.
Mary asked for the Arizona Supreme Court to review this ruling.
Award of Money: Discussion of A.R.S. § 25-318(A)
The Supreme Court first reviewed the Arizona statute that controls the disposition of property in a dissolution of marriage case, A.R.S. § 25-318. The law first directs the trial court to assign each spouse his or her separate property. It also requires the court to equitably divide the parties’ community property.
The law specifically authorizes the trial court, when dividing community property, to consider wrongful, unreasonable and improper uses of the common property. That is, the statute authorizes the trial court to compensate one spouse for the misuse of the common property by the other spouse. It may do so by awarding the innocent spouse a greater share of the community property to offset the value of the lost property.
The Supreme Court noted that the trial court did not award Mary a greater share of the existing marital property to compensate her for any dissipation of that property. Nor is there evidence that the separate maintenance award was intended to compensate her for the dissipation of community property.
Instead, the trial court simply arrived at the amounts found to have been improperly or excessively spent, and ordered Richard to pay these amounts to Mary.
Award of Money: A Look at Legislative Intent
The Supreme Court stated that unless the statute, A.R.S. § 25-318, authorizes the trial court to order the payment of money from one spouse to another in a dissolution action, the order, in this case, cannot be authorized. It looked at the history of the law and its various sections to determine what the legislature intended when it enacted the law.
The Court focused on the language of A.R.S. § 25-318 that allows the court to make the division of property equitably, “though not necessarily in kind.” After discussion, the Court determined that that section of the statute authorizes a court to make an award of money instead of merely dividing the property.
This would make sense, since sometimes it is virtually impossible to divide property 50/50, like equipment of a business, inventory, or stock in the closely held business. The statute allows the court to make an equitable division of this kind of property by awarding an amount of money to one spouse representing that spouse’s share of the value of the property, but the specific property would be set aside to the other spouse.
The Court found that its conclusion was also supported by A.R.S. § 25-318(C) which allows a court to put a lien on the property awarded to one spouse to secure payment of an amount awarded to the other.
It reviewed cases from other states holding that when the court finds that one spouse has improperly taken marital property, the value of the property is added to the other existing marital property, and the total divided equitably. Then it adopted that rule as well.
The Court found that a divorce judge may award a spouse a sum of money representing the value of her interest in community assets which are not available for division. The assets may be unavailable because of the other spouse’s excess expenditures or his concealing or destroying the property.
It upheld the trial court’s judgment ordering Richard to pay Mary the two sums of cash.
If you need information about an award of money in an Arizona divorce, you should seriously consider contacting the attorneys at Hildebrand Law, PC. Our Arizona divorce attorneys have over 100 years of combined experience successfully representing clients in divorce cases in Arizona.
Our family law firm has earned numerous awards such as US News and World Reports Best Arizona Family Law Firm, US News and World Report Best Divorce Attorneys, “Best of the Valley” by Arizona Foothills readers, and “Best Arizona Divorce Law Firms” by North Scottsdale Magazine.
Call us today at (480)305-8300 or reach out to us through our appointment scheduling form to schedule your personalized consultation and turn your Arizona divorce case around today.
Other Articles About Community Property in Arizona
- ARIZONA COMMUNITY PROPERTY LAWS
- CALCULATING A COMMUNITY LIEN ON AN APPRECIATING ASSET IN AN ARIZONA DIVORCE
- VALUING GOODWILL OF A LAWFIRM IN AN ARIZONA DIVORCE
- COMMUNITY PROPERTY AND ANNULMENT OF MARRIAGE IN ARIZONA
- SOLE AND SEPARATE FUNDS USED TO BUY A HOUSE IN ARIZONA
- DIVISION OF MILITARY RETIREMENT AND DISABILITY PAYMENTS IN AN ARIZONA DIVORCE
- SEPARATE PROPERTY CONTRIBUTIONS WHEN DIVIDING COMMUNITY PROPERTY IN ARIZONA
- PROPERTY HELD AS JOINT TENANTS WITH RIGHTS OF SURVIVORSHIP IN AN ARIZONA DIVORCE
- DIVIDING RETIREMENT ACCOUNTS IN AN ARIZONA DIVORCE
- ARIZONA DIVORCE DEBT
- EFFECT OF PLACING COMMUNITY PROPERTY INTO A FAMILY TRUST IN ARIZONA
- COMMUNITY PROPERTY LOTTERY WINNINGS IN ARIZONA
- IS SEPARATE PROPERTY LIABLE FOR COMMUNITY DEBT IN ARIZONA
- CREDITOR COLLECTING A SEPARATE DEBT WITH COMMUNITY PROPERTY IN ARIZONA
- TITLE AFFECTS COMMUNITY PROPERTY RIGHTS IN ARIZONA
- COMMINGLING SEPARATE PROPERTY WITH COMMUNITY PROPERTY IN ARIZONA
- ARE MILITARY RETIREMENT PAYMENTS COMMUNITY PROPERTY IN ARIZONA
- EFFORT DOES NOT ENTITLE A SPOUSE TO MORE COMMUNITY PROPERTY IN ARIZONA
- RESULT OF COMMINGLING COMMUNITY AND SEPARATE PROPERTY IN ARIZONA
- INCREASED VALUE OF A BUSINESS IN AN ARIZONA DIVORCE
- GIFT OF SEPARATE PROPERTY THROUGH A JOINT TENANCY DEED IN ARIZONA
- ABANDONMENT OF MARRIAGE AND COMMUNITY PROPERTY RIGHTS IN ARIZONA
- ARE PROFITS FROM A SEPARATE BUSINESS COMMUNITY OR SEPARATE PROPERTY
- TRACING SEPARATE PROPERTY COMMINGLED WITH COMMUNITY PROPERTY IN ARIZONA
- INTENTION CONTROLS TRANSMUTATION OF SEPARATE INTO COMMUNITY PROPERTY
- RECORDING A HOME IS INSUFFICIENT TO CHANGE SEPARATE PROPERTY INTO COMMUNITY PROPERTY
- COMMUNITY PROPERTY INTEREST IN A BUSINESS OWNED PRIOR TO MARRIAGE
- WHAT IS SEPARATE PROPERTY IN ARIZONA
- VALUATION AND DISTRIBUTION OPTIONS FOR A PENSION IN AN ARIZONA DIVORCE
- UNFAIR SEPARATION AGREEMENT IN ARIZONA
- UNEQUAL DIVISION OF PROPERTY IN A DIVORCE IN ARIZONA
- SEPARATE PROPERTY USED PURCHSE A HOME DURING MARRIAGE IN ARIZONA
- REIMBURSEMENT FOR PAYING SEPARATE DEBTS OF A SPOUSE IN ARIZONA
- REFUSAL TO SELL A HOUSE AFTER A DIVORCE IN ARIZONA
- PENSIONS AND DIVORCE IN ARIZONA
- MILITARY RETIREMENT PAY AND DIVORCE IN ARIZONA
- IS SEPARATE PROPERTY DIVIDED DIFFERENTLY THAN COMMUNITY PROPERTY IN ARIZONA
- IS ARIZONA A 50-50 STATE IN A DIVORCE
- IS ALL PROPERTY OWNED BY EITHER SPOUSE COMMUNITY PROPERTY IN ARIZONA
- INTEREST ON A LOAN BETWEEN SPOUSES IN ARIZONA
- IMPACT OF IMPROVEMENTS TO SEPARATE PROPERTY IN AN ARIZONA DIVORCE
- HOW TO ENFORCE DIVISION OF PROPERTY AND DEBT IN ARIZONA
- HOW TO DIVIDE PROPERTY IN ARIZONA WHEN A SPOUSE IS HIDING ASSETS
- HOW STOCK OPTIONS ARE DIVIDED IN AN ARIZONA DIVORCE
- HOW IS COMMUNITY PROPERTY DIVIDED IN ARIZONA
- HOW ARE RETIREMENT ACCOUNTS DIVIDED IN AN ARIZONA DIVORCE
- FILING A LIS PENDENS IN A DIVORCE IN ARIZONA
- FAIR COMPENSATION DEFENSE IN AN ARIZONA DIVORCE
- ENFORCE A PROPERTY SETTLEMENT AGREEMENT IN ARIZONA
- DO RULES REGARDING PROPERTY APPLY TO DEBTS IN ARIZONA
- DIVISION OF DEBT IN AN ARIZONA DIVORCE
- DIVIDING PROPERTY NOT INCLUDED IN A DIVORCE DECREE IN ARIZONA
- DIFFERENCE IN COMMUNITY AND SEPARATE PROPERTY IN ARIZONA
- DETERMINING COMMUNITY VERSUS SOLE PROPERTY IN ARIZONA
- CREATION OF A COMMUNITY LIEN ON SOLE AND SEPARATE PROPERTY IN ARIZONA
- COMMUNITY PROPERTY LAWS ABOUT A SPOUSE’S PERSONAL GUARANTEE IN ARIZONA
- CHOOSING A VALUATION DATE WHEN DIVIDING ASSETS IN A DIVORCE IN ARIZONA
- CAN A SPOUSE BE HELD LIABLE FOR CREDIT CARD DEBT IN ARIZONA
- CALCULATING A COMMUNITY LIEN ON A DEPRECIATING ASSET IN ARIZONA
- EFFECT OF A DISCLAIMER DEED OR QUIT CLAIM DEED IN A DIVORCE IN ARIZONA
- BANK ACCOUNTS AND DIVORCE IN ARIZONA
- DIVIDING PAID TIME OFF IN A DIVORCE IN ARIZONA
- EQUALIZATION PAYMENTS IN AN ARIZONA DIVORCE
- OMITTED ASSETS IN AN ARIZONA DIVORCE DECREE
- CRSC PAY AND DIVORCE IN ARIZONA
- JUDGMENT FOR SEPARATE PROPERTY STOLEN DURING MARRIAGE
- JUDGE IGNORES A BUSINESS APPRAISAL IN AN ARIZONA DIVORCE
- REIMBURSEMENT OF SEPARATE PROPERTY IN A DIVORCE IN ARIZONA
- SEPARATE PROPERTY INCREASES IN VALUE DURING MARRIAGE IN ARIZONA
- PERSONAL INJURY AWARDS AND DIVORCE IN ARIZONA
- VALUING A BUSINESS IN A DIVORCE IN ARIZONA WITHOUT FINANCIAL DOCUMENTATION
- RETIREMENT INCREASE AFTER DIVORCE IN ARIZONA
- FAILURE TO DISCLOSE FINANCIAL INFORMATION IN A DIVORCE IN ARIZONA
- UNAUTHORIZED USE OF A POWER OF ATTORNEY TO DISPOSE OF SPOUSE’S SEPARATE PROPERTY
- COHABITATION AGREEMENTS IN ARIZONA
- FINANCIAL AGREEMENTS BETWEEN UNMARRIED COUPLES IN ARIZONA
- COMMUNITY PROPERTY LIABILITY EXISTS EVEN AFTER PROBATE ENDS
- WHEN A CREDITOR MAY TAKE SOLE AND SEPARATE ASSETS OF A SPOUSE
- LIABILITY FOR A SPOUSE’S NEGLIGENCE IN ARIZONA
- VALUATION OF STOCK HOLDINGS AND DEBT IN AN ARIZONA DIVORCE
- LOANS BEFORE MARRIAGE IN ARIZONA
- CREDITOR LIEN ON JOINT TENANCY PROPERTY IN AN ARIZONA DIVORCE
- INCREASE IN VALUE OF A SEPARATE PROPERTY BUSINESS STOCK IN AN ARIZONA DIVORCE
- STATEMENTS REGARDING PROPERTY ARE BINDING IN AN ARIZONA DIVORCE
- DEBTS NOT INCLUDED IN A DIVORCE DECREE IN ARIZONA
- FRAUDULENT QUIT CLAIM DEED IS INEFFECTIVE IN AN ARIZONA DIVORCE
- DISPOSITION OF COMMUNITY PROPERTY IN A LAST WILL AND TESTAMENT
- DIVIDING BUSINESS PROFITS DURING A DIVORCE IN ARIZONA
- MINORITY DISCOUNT IN A BUSINESS VALUATION IN AN ARIZONA DIVORCE
- HOW A BUSINESS IS DIVIDED IN A DIVORCE IN ARIZONA
- DIVISION OF CIVIL SERVICE RETIREMENT SYSTEM BENEFITS IN A DIVORCE IN ARIZONA
- DISABILITY PAY AND COMMUNITY PROPERTY IN ARIZONA
- VALUATION OF A PROFESSIONAL PRACTICE IN A DIVORCE IN ARIZONA
- JOINING A THIRD PARTY IN A DIVORCE IN ARIZONA
- CONTESTING A RULE 69 AGREEMENT WITHOUT A TRIAL IN ARIZONA
- DEFENSE TO REIMBURSEMENT FOR PAYMENT OF COMMUNITY BILLS IN AN ARIZONA DIVORCE
- SURVIVOR ELECTION AND MILITARY RETIREMENT IN AN ARIZONA DIVORCE
- DEFERRED MILITARY RETIREMENT IN AN ARIZONA DIVORCE
- DIVISION OF DEFERRED RETIREMENT OPTION PLANS IN AN ARIZONA DIVORCE
- CLAIMS OF WASTE IN AN ARIZONA DIVORCE
- DIVIDING ACCOUNTS RECEIVABLE IN A DIVORCE IN ARIZONA
- THE IMPORTANCE OF TITLE SEARCHES ON THE MARITAL HOME DURING A DIVORCE
- FRAUDULENT CONVEYANCE IN AN ARIZONA DIVORCE
- MINORITY DISCOUNT BUSINESS APPRAISAL IN AN ARIZONA DIVORCE
- FINDING A REALTOR DURING A DIVORCE IN ARIZONA
- MILITARY BENEFITS IN A DIVORCE IN ARIZONA
- WHAT TO DO IF YOUR SPOUSE IS HIDING ASSETS IN A DIVORCE IN ARIZONA
- TYPES OF BUSINESS APPRAISALS IN AN ARIZONA DIVORCE
- BENEFICIARY DESIGNATIONS AFTER DIVORCE IN ARIZONA
- RETIREMENT ACCOUNTS, QDROs, AND DIVORCE IN ARIZONA
- DIVORCE AND REFINANCING A MORTGAGE IN ARIZONA
- PROVING PROPERTY IS SOLE AND SEPARATE IN AN ARIZONA DIVORCE
- 7 REASONS YOU MAY HAVE TO SHARE YOUR INJURY SETTLEMENT IN AN ARIZONA DIVORCE
- PERSONAL INJURY SETTLEMENT IN A DIVORCE IN ARIZONA
- CLAIM OF A SPOUSE’S PERSONAL INJURY AWARD IN AN ARIZONA DIVORCE
- PERSONAL INJURY AWARDS AND DIVORCE SETTLEMENTS IN ARIZONA
- PROTECTING YOUR PERSONAL INJURY AWARD IN AN ARIZONA DIVORCE
- DIVORCE AND PERSONAL INJURY AWARDS IN ARIZONA
- ENFORCING A SURVIVOR BENEFIT ELECTION IN A PENSION IN ARIZONA
- MURDERER SPOUSE AND COMMUNITY PROPERTY IN ARIZONA
- DAMAGES CAUSED BY A COMMUNITY PROPERTY VEHICLE IN ARIZONA
- COMPENSATION FOR WASTE OF COMMUNITY ASSETS IN ARIZONA
- USING SEPARATE FUNDS TO BUY JOINT PROPERTY IN ARIZONA
- TRANSMUTING SEPARATE PROPERTY INTO COMMUNITY PROPERTY BY COMMINGLING
- LIABILITY FOR DEBT GUARANTEED BY THE OTHER SPOUSE IN ARIZONA
- USING COMMUNITY FUNDS TO PAY A MORTGAGE ON A SPOUSE’S SOLE AND SEPARATE HOUSE
- DISCLAIMER DEED AND DIVORCE IN ARIZONA
- COMMUNITY LIEN ON A SOLE AND SEPARATE BUSINESS IN A DIVORCE IN ARIZONA
- YOU’RE GETTING A DIVORCE, ARE YOU SURE YOU WANT THE HOUSE?
- CHANGING JOINT PROPERTY TO COMMUNITY PROPERTY IN ARIZONA
- SEGREGATING SEPARATE PROPERTY FROM COMMUNITY PROPERTY IN ARIZONA
- ARIZONA COMMUNITY PROPERTY LAWS FREQUENTLY ASKED QUESTIONS