How is Community Property Divided in Arizona

Dividing Community Property in an Arizona Divorce

How is Community Property Divided in Arizona?

How is Community Property Divided in Arizona?

People going through a divorce must decide how to divide their community property or go to trial, present evidence on how each person wants to divide their community property for them. All a court has to do is to fairly and equitably divide their property. Although this does not necessarily mean the property is divided equally, the court will usually try to get as close to an equal division of the property as possible. There may be some reason both parties want a piece of property, such as the marital home, in which case the court can award that assets to one of the spouses or order that it be sold with the parties equally dividing the equity in the home.

The court prefers for spouses to decide for themselves how best to divide their assets and debts. Such an agreement is typically memorialized in a written settlement agreement often referred to as a Marital Settlement Agreement. The agreement is, essentially, a written and binding contract between the spouses in which they divide their assets, divide their debts, and resolve other financial issues.

The agreement will address income tax issues, refinancing of debts to remove a spouse’s name from an assigned debt, and indemnification from one spouse to the other for debts allocated to each spouse. Indemnification is an agreement between spouses that grants a spouse the right to enforce the parties’ agreement for the payment of debts if the spouse assigned a debt fails to pay the obligation.

Jennifer, thank you for being my attorney. I could not have been more pleased with the outcome of my family court hearing. Everything you have done for me throughout this case reflects in the final ruling of the judge. You helped me keep my head together and taught me a lot about myself as a person. I learned so much about my life from observing and listening to you. I will take all the advice you gave me to continue taking responsibility for my choices, continue to put the kids' needs first, and always stay truthful. Your diligence, dedication, and persistence in my case made what seemed impossible, possible. You are a wonderful person and an amazing attorney and I am stronger and more confident because of you.
A Google User
A Google User
20:31 20 Sep 17
I just want to again thank the Firm for working with me all that it has. I could not have done anything without everyone's assistance. You, Chris and Stacey have been and continue to provide me with compassion and hard work towards my case. Also a very special thanks to Kip for taking my case in the beginning. Also continued support from him and his dedication to providing me with his expertise in this matter.
A Google User
A Google User
21:41 07 Nov 17
After interviewing several law firms, I came across Jennifer Shick, and her firm, who I hired to represent me for my Family Court case. Jennifer has extensive knowledge of the law and is determined to bring the truth to every issue involved within the case. Throughout my case, Jennifer was prepared meticulously as well as went above and beyond all of my expectations. Even when the other party tried to differ from the truth, lie to the Judge, and turn situations around, Jennifer remained attentive and provided substantial evidence to show the judge the facts as well as the proof to support what was the best interests of my children. Additionally, Jennifer helped me endure many difficult experiences, situations and inspired me to remain positive throughout the entirety of my case. Her kindness, compassion, and professionalism helped me through very difficult times and made the process feel a thousand times lighter on my shoulders. She truly has my children and my best interest at heart and I trust her perspective as well as her honesty on each and every aspect of my case. She lessened the burden on my shoulders and even when I felt like the case was not going to go in my favor, Jennifer was open-minded and reassured me that the Judge would, in fact, see the truth, which he did and the case went in my favor. After nine months of court, everything finally came together. I cannot declare how much Jennifer has been an outstanding attorney. She addressed each and every issue with diligence, she cares about her clients and their families. Jennifer genuinely cares about her clients and her dedication to the details of the case was remarkable. Overall, I am extremely pleased with Jennifer’s services and I am truly thankful that I was so blessed to have her represent my children and me. I highly recommend Jennifer as one of the best attorneys in Arizona and if the situation ever arises, I will definitely have her represent my children and me again.
Google User
Google User
14:58 04 Oct 17
Dear Stacey and Kip, How can I ever thank you enough for helping me through the most difficult time in my life? I couldn't put into words my heartfelt gratefulness. You both were so compassionate and professional at every given moment throughout this process with me. I thank you from the bottom of my heart. You helped me to regain my freedom.
A Google User
A Google User
16:03 22 Nov 17
I was a client of Attorney Kevin Park for the dissolution of a divorce in 2016. And since I had never had the need to hire an attorney before for any purpose, I was somewhat apprehensive of the process. But the very calm and professional demeanor of Mr. Park eased my fears. He adeptly answered all my questions and I clearly knew the process and what to expect. And the skilled manner he communicated with opposing counsel was perfect. When it came down to negotiating with my spouse’s counsel, I knew I had selected the best attorney for my situation. What I noticed and appreciated was that he was using just the right amount of pressure with opposing counsel as was necessary. If you find yourself in this situation, you will want a seasoned professional like Mr. Park on your side. I'm very grateful that he was my attorney and not the opposition!
A Google User
A Google User
22:14 28 Jun 17
Chris is a smart and aggressive attorney for his clients. Chris always tries to reach a fair settlement of his cases. I’ve represented clients when Chris was the opposing counsel and while he is professional and amicable to work with, he does not back off on what he needs to do for his client
A Google User
A Google User
18:16 18 Sep 17
Kevin Park of Arizona Estate Planning Attorneys was just what I needed for my divorce. He was very approachable and personable. He was quick to recognize what I needed and provided it quickly and efficiently. I hope to never need a divorce lawyer again, but if I know anyone else who does, I will definitely recommend Kevin.
A Google User
A Google User
19:22 23 Aug 17
I feel that Tracey Van Wickler is certainly one of the best family lawyers around. She is logical, intelligent, and truly cares. Tracey always does what is in the clients best interest, does it well, timely and with integrity. She is good at keeping her clients informed as to what is going on and clear in her communication both written and verbally. I have recommended Tracey to other people and will continue to recommend her. I recommended Tracey to someone who was having issues with their ex-wife and his response was, “I know how good she is because I went up against her and she ate me for lunch”. This same person was so impressed with her, he even recommended her to someone else, WOW, that is impressive! I am exceptionally happy with her attention to detail, her ability to explain things in ways that are easy to understand, as well as her ability to keep everyone focused on the most important things. I would recommend Tracey to anyone who may be in need of her services.
A Google User
A Google User
17:44 23 Jun 16
I retained Hildebrand Law after interview a number of firms in the valley. Working with Michael C. was incredibly easy and informative. My case progressed in such a organized and thought out way to ensure that my needs were met. Michael was incredibly proactive and was able to see far ahead into my case to steer clear of some roadblocks. I would not hesitate to recommend Michael Clancy, and Hildebrand Law in general, to anyone.
Bassam Ziadeh
Bassam Ziadeh
21:20 02 Apr 18
I have worked with Hildebrand law for about 8 years. They are always ready to serve, provide guidance and give you a few options. When they provide you options they also take the time to walk you through the pros and cons of each and give you a recommendation of what is best, but will listen to you and support whatever course you choose after making and educated choice. I’d recommend them to my closest friends and feel Chris Hildebrand is now a friend to me.
Larry Flint
Larry Flint
21:53 27 Feb 18
Despite the unfortunate situation I found myself in, Chris Hildebrand @ Hildebrand Law helped me maneuver every step with professionalism, expertise, and even a sensitivity that was an added bonus.Chris and his staff helped me even when I didn't know I needed the help. In other words. . . they made sure we did not leave anything undone. And in the rare instance we needed the expertise of another professional, Chris knew exactly who to recommend.Chris also knew, because of his experience, what to anticipate down the road of litigation. That meant we were better prepared to meet the challenges head on, which lead to a more equitable and fair outcome. I appreciated that Chris did his best to meet my every need in a timely fashion, even if I had a simple question that required only a phone call or e-mail or if we needed to talk face-to-face.I highly recommend Chris Hildebrand @ Hildebrand Law, PC.
Sam Franchimone
Sam Franchimone
22:09 12 Sep 13
I cannot express enough how thankful I am that I found Hildrebrand Law. Chris Hildebrand is an excellent attorney who has my best interests in mind and always encourages me to do the right thing regardless of what the opposing party is doing. Chris knows family law very well and relies on that knowledge to format options and solutions for each situation that may arise. He knows what the Court expects and what will and will not be tolerated. He has attempted to settle this case quickly and as inexpensively as possible from the start. His paralegal, Laura, is remarkable. She is organized, quick to respond, and compassionate. Chris is well prepared with a binder full of detailed and organized information and that is likely due to her thorough skills and expertise. While getting a divorce that was unexpected is a painful and difficult process, Chris and Laura treat my family and I like friends rather than another just "client." I am hopeful that I do not need to recommend divorce lawyers to anyone in the future but if I do, Hildebrand Law will be a recommendation I would give hands down.
Lindsay Donoian
Lindsay Donoian
06:53 27 Sep 14

Valuing the Community Property

One of the things you or your attorney will need to do is to determine the value of the property you own as well as determining the amount of any loans you mage have on that property. For homes, that will mean you need to determine the amount of the existing mortgage and the value of the home by either an appraisal or a comparative market analysis from a qualified realtor. For a car, you may need to do a Kelly Blue Book calculation of value and/or search for similar cars for sale on popular sales websites. Personal property is not typically appraised because of its nominal value, but valuable personal property such as collections of art, jewelry, coins and the like may justify the use of a personal property appraiser. Until you know the value of the property, it is hard to determine what would be a fair and equitable division of that community property in an Arizona divorce. We also may need a business appraisal done if a business is divided in a divorce.

Dividing Sole and Separate Property and Community Property

If the parties are unable to agree upon the division of their property, the court will assign to each party any sole and separate property belonging to him or her and will “fairly and equitably” divide the remaining community property.  “Fair and equitable” will, in most instances, be approximately equal, unless the court finds an unequal division is appropriate.  The Arizona Supreme Court in the seminal Toth v. Toth case upheld a trial court’s ruling of a substantially unequal division of community property, but the case warned that the facts of that case were unique and likely inapplicable to a vast majority of cases.

Hildebrand Law, PC | Voted Best of Our Valley in Arizona Foothills Magazine.

Hildebrand Law, PC | Voted Best of Our Valley in Arizona Foothills Magazine.

In yet another case, the Arizona Supreme Court in the case of Schwartz v. Schwartz ruled that a judge typically divides community property equally, but need not do so in all cases. The Schwartz ruling indicated the court could consider many factors to determine if an unequal division of community property is more equitable than an equal division of that property.

In a case dissimilar to the Toth case, the Arizona Supreme Court in the case of Hatch v. Hatch case reversed a trial court ruling that awarded the husband almost all of the community property because he was responsible for the accumulation of that property. It is fair to say that a spouse is not entitled to more of the community property because he or she was the spouse responsible for creating the wealth.

Dividing Community Property in Arizona.

Dividing Community Property in Arizona.

Many divorce decrees provide for a “catch all” provision that usually states that each party will be awarded all “other” personal property in his or her possession as his or her sole and separate property.  The purpose of such language is to catch any assets that were not specifically described in the Decree.  As you can imagine, it would be challenging to describe every item of property you own, so this type of provision may be helpful.  However, there are some circumstances when a judge will reopen a divorce decree to reallocate assets mistakenly omitted in a final divorce decree.

You may wish to read our summary of the Arizona Court of Appeals ruling in the case of Ringear v. Rinegar wherein the court of appeals found it was appropriate to reopen the divorce decree to allocate the community property interest in the wife’s retirement account that was not divided in the order.  The court of appeals expressly rejected wife’s argument that “each party retains all other personal property in their possession” dictated that the retirement account is awarded to her. For more information on how you enforce a property settlement agreement, you may read our article on the Arizona Supreme Court’s decision in the Proffit v. Proffit case.

Rules Regarding Dividing Military Disability Pay

Federal and state law prohibits the division of military disability pay. The Arizona statute banning the division of military disability pay was passed into law in 2010.  It prohibits both the division of military disability pay. It also prevents any court order that requires the service member to “make up” for lost retirement pay due to electing to receive disability pay, which is not divisible in an Arizona divorce, instead of regular retirement pay, which is divisible in an Arizona divorce.

Division of Community Property in Arizona.

Division of Community Property in Arizona.

The Arizona Supreme Court in the case of Howell v. Howell, however, distinguished application of the Arizona statute in cases in which a spouse of a service member was already awarded a portion of a service member’s military retirement before the enactment of the Arizona law in 2010.  The Arizona Supreme Court reasoned that, in such situations, the spouse’s right to receive a portion of the military service member’s retirement had already “vested.” Therefore, a trial court may order a service member to “make up” the difference if the service member voluntarily reduces his or her retirement pay by selecting disability pay instead of retirement pay.

You should be aware that one of the reasons a military service member may elect to reduce the monthly amount he or she receives by selecting to receive disability pay instead of retirement pay is because unlike retirement pay, disability pay is not subject to income tax. Sometimes people may forget to add a debt or asset to the division of their property in their divorce decree. Absent a valid argument otherwise, such as a spouse intentionally leaving an asset out of the divorce decree to defraud the other party, those debts and property are deemed by law to be held equally. The Arizona Court of Appeals in the case of Ellsworth v. Ellsworth discusses what happens in such situations.

Contact Our Scottsdale and Phoenix Arizona Community Property Attorneys

Call us at (480)305-8300 to schedule a consultation with one of our Scottsdale and Phoenix Arizona Community Property Attorneys regarding Arizona community property laws or any other Arizona family law matter.