Tracing Separate Property Commingled With Community Property in Arizona

In Arizona, courts presume that property a couple acquires during the marriage is community property. A spouse can overcome this with clear and convincing evidence. In Kingsberry v Kingsberry 379 P.2d 893 (1963), the Arizona Supreme Court of addressed this issue.

Facts of the Case

Mrs. Kingsberry and Mr. Kingsberry divorced in 1963. While they were married, the husband had acquired an interest in a ranch with his father. He also acquired stock in Western Drilling Company. Wife claimed that these were community property assets. The trial court awarded them to the husband as his separate property, however, and wife appealed.

N-Bar Ranch

Tracing Separate Property Commingled With Community Property.

Husband and his father purchased the N-Bar Ranch as a partnership venture, each owning a one-half interest. The father put the deal together and used his personal money to buy the property. The deed conveyed the property interest to husband “as his sole and separate estate”.

A third party manager operated the ranch as a stock-raising business. Husband often used his separate funds to buy sheep and improve on the land. The Arizona Supreme Court agreed with the trial court’s decision that the interest in the ranch was husband’s separate property.

Mrs. Kingberry’s name was on the mortgage, however, but only because the lender insisted on it. The fact that separate and community funds were in the same account did not make them all funds community funds. In this case, husband kept careful records as to how much was his separate property.

Western Drilling Stock

Husband furthermore bought ten shares in Western States Drilling Company with his separate funds. From time to time, he loaned community money to the company. Wife argues that this “commingling” converted the stock into community property, but the Court of Appeals disagreed.

Arizona law describes what happens if the community invests money in the separate property of one spouse. The property remains separate but the community has a lien for the amount invested. In the Kingsberry’s case, Western Drilling repaid all of the community loans in full. Therefore, the community could not claim a lien.

Disposition

The Court of Appeals affirmed the trial court’s decision. This case was distinguished by the Arizona Court of Appeals in the Hanrahan v. Sims case.

Other Articles About Community Property in Arizona

• Community Lien on Sole and Separate Property in Arizona
• Community Lien in Arizona
• Community Liens Separate Property in Arizona
• Community Property and Personal Guaranty in Arizona
• Determining Community Versus Sole Property in Arizona
• The difference Between Community and Separate Property in Arizona
• Disclaimer Deed in a Divorce in Arizona
• Divide Retirement Accounts in an Arizona Divorce
• Dividing Property Not Included in Divorce Decree in Arizona
• Division of Debt in an Arizona Divorce
• Do Rules Regarding Property Apply to Debts in an Arizona Divorce
• Enforce Division of Property and Debt in an Arizona Divorce
• Enforcing a Property Settlement Agreement in Arizona
• Filing a Lis Pendens in a Divorce in Arizona
• How is Property Divided in a Divorce in Arizona
• How to Divide Property in Arizona When a Spouse is Hiding Assets
• Is All Property Community Property in Arizona
• Is Arizona a 50 50 State in a Divorce
• Is Separate Property Divided in Arizona Divorce
• Marital Property Laws in Arizona
• Military Retirement Pay and Divorce in Arizona
• Pensions and Divorce in Arizona
• Separate Property Used to Purchase a Home During Marriage in Arizona
• Sole and Separate Property Divorce Arizona
• Is a Spouse Liable for Credit Card Debt in Arizona
• Stock Options Divided in an Arizona Divorce Case
• Stock Options in an Arizona Divorce
• Unequal Division of Property in Arizona Divorce
• Unfair Separation Agreement in Arizona
• Valuation and Distribution Options For Pensions in an Arizona Divorce
• What is Community Property in Arizona
• What is Separate Property in Arizona

Scottsdale Arizona Divorce Attorney.

Chris Hildebrand wrote this article 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.

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