Recording of a Homestead is Insufficient to Change Separate Property Into Community Property in Arizona

In Arizona, property owned by a spouse before marriage is their separate property. If they transfer an interest to the other spouse, the property status can change to community property. However, actions must be taken that show a clear intention to gift the property to the community. In re Estate of Sims 542 P.2d 1123 (1975), the Court of Appeals discussed this issue.

In the case of the Sims, a surviving wife appealed a ruling that the family home was the separate property of her deceased husband. She argued that her spouse changed the status of the property to community property.

Facts of the Case

Mr. Sims and Mrs. Sims married and lived together in a property husband owned before the marriage. They each had children from prior marriages who also lived with them. Mr. Sims named it to homestead property.

When the husband died, the probate court awarded wife the property for an 18-month period. The court awarded all other interests in the property to the heirs of the husband. Wife appealed.

Transforming Separate Property

All parties agreed that the property belonged to Mr. Sims before the marriage. Therefore, it was his separate property. Under Arizona law, the Court said, property generally keeps its separate property status during a marriage.

Property can become community property, however, by agreement or by operation of law. Here, the wife claims that the house became community property.

In 1966, a court-ordered Mr. Sims to pay a judgment against him secured by the house. If he didn’t pay, he would lose the house. The couple paid the judgment with community funds and recorded a homestead in both their names.

The Court of Appeals found that this did not change the status of the property to community property. It said that it found no evidence that this was the husband’s intention.

Other Evidence of Intention

Mrs. Sims presented evidence that the couple and their children from prior marriages used the house as the family home. They lived there throughout the marriage.

The couple paid the mortgage with community property funds. And Mr. Sims recorded a homestead exemption on the property. The Court of Appeals remained unpersuaded. It said that the wife’s evidence was not sufficient to show a transmutation of the property to community property.

Disposition of Homestead

Arizona law specifies what happens in probate to homestead property that is the separate property of the deceased. Title to the property vests in the heirs of the deceased. However, the probate court can award the use of the property to the surviving spouse for a limited period. Here, the probate court awarded the use of the property to Mrs. Sims for 18 months. The Court of Appeals said that this was not an abuse of discretion.

Disposition

The Arizona Court of Appeals affirmed the ruling of the lower court.

If you have questions about filing a homestead and separate property in an Arizona divorce case, you should seriously consider contacting the attorneys at Hildebrand Law, PC. Our Arizona community property and family law attorneys have over 100 years of combined experience successfully representing clients in community property disputes and family law cases.

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 community property or family law case around today.

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Chris Hildebrand wrote the information on this page about the effect of filing a homestead on property in Arizona to ensure everyone has access to information about family law in Arizona. Chris is a divorce and family law attorney at Hildebrand Law, PC. He has over 24 years of Arizona family law experience and has received multiple awards, including US News and World Report “Top Arizona Divorce Attorneys”, Phoenix Magazine “Top Divorce Law Firms”, and Arizona Foothills Magazine “Best of the Valley” award. He believes the policies and procedures he uses to get his clients through a divorce should all be guided by the principles of honesty, integrity, and, quite frankly, actually caring about what his clients are going through in a divorce or family law case. In short, his practice is defined by the success of his clients. He also manages all of the other attorneys at his firm to make sure the outcomes in their clients’ cases are successful as well.