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Reimbursement of Separate Property in a Divorce in Arizona | Voted “Best of the Valley”

Posted on : March 2, 2016, By:  Christopher Hildebrand
Reimbursement of Separate Property in a Divorce

Reimbursement of Separate Property in a Divorce in Arizona

Reimbursement of Separate Property in a Divorce in Arizona.

Reimbursement of Separate Property in a Divorce in Arizona.

In Arizona, a spouse is free to use his or her separate money to buy real property for the couple. However, the law says that if the property is taken and held as community property or in joint tenancy, the spouse investing separate funds loses all right to reimbursement. A divorce court cannot award more to the spouse who provided the initial purchase money to reimburse him or her for that initial down payment. In the case of Whitmore v. Mitchell, 733 P.2d 310 (Ariz. Ct. App. 1987), the Arizona Court of Appeals looked at whether a divorce court’s property division violated this rule. Elizabeth Whitmore and James Mitchell married in 1984 and divorced in 1985. Before they married, they signed a prenuptial agreement that said that property each held before marriage, as well as earnings during the marriage, would remain separate property, but if any property was held jointly by the two of them, the title designation would control ownership. That means that if they held real property as joint tenants, they would actually have joint tenant interests.

At the time of divorce, Elizabeth and James held two properties jointly, one on Lee Street and one on San Marino. The Lee Street property had been the separate property of Elizabeth before marriage and she transferred it to both of them in joint tenancy with the right of survivorship. This means that if one dies, the property belongs to the other. James purchased the San Marino property using a down payment from his separate property. It too was held by the couple as joint tenants with the right of survivorship.

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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.
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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.
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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!
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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.
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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

During the divorce, a judge entered an order that the couple’s property ownership must follow the title designation under the prenuptial agreement. However, when the matter came to trial, a different judge heard testimony. Both parties testified that the couple had only put the San Marino property in both names as a matter of convenience and that no gift was intended by it. The divorce court awarded Elizabeth the Lee property and James the San Marino property. It ordered James to pay Elizabeth $13,000 for her share of the San Marino property. Elizabeth appealed, claiming that the Lee property had no equity, while the San Marino property had $50,000 or more of equity. She claimed that the only reason for the court to divide the property as it did was to reimburse James for the down payment on the San Marino property, which reimbursement was against Arizona law.

Difference between Community Property and Joint Tenancy

Separate Property and Divorce in Arizona.

Separate Property and Divorce in Arizona.

The Court of Appeals agreed that the prenuptial agreement was valid and that, under the agreement, the couple actually held all joint property just as it was titled: as joint tenants with right of survivorship. The Court noted that, in the trial court, the terms joint tenancy and community property were used interchangeably. However, each created separate kinds of rights during a divorce. If the San Marino house had been held as community property, neither spouse had a right to reimbursement for any separate money invested in it, whether initial purchase money or an investment after it was owned. However, the San Marino property was held by the couple as joint tenants, so different rules apply. Arizona law holds that any personal money invested by one joint tenant to pay obligations shared by both joint tenants is subject to reimbursement when property rights are divided. However, joint obligations do not commence until a property is purchased.

Therefore, when one spouse contributes his own money as a down payment to buy a joint tenancy property, he does not pay obligations shared by both joint tenants.  That means that the court cannot divide the real property in a way to reimburse him for his separate property investment. The Court of Appeals was not able to determine whether James invested separate property in the San Marino house after it was purchased. It sent the matter back to the trial court to determine what he invested and when he had invested it. The money he invested to buy the house could not be reimbursed to him. Money invested after purchase could be reimbursed.

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

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



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