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Unequal Division of Community Property in an Arizona Divorce | Voted “Best of the Valley”

Posted on : December 22, 2015, By:  Christopher Hildebrand
Unequal Division of Community Property in an Arizona Divorce

Unequal Division of Community Property in Arizona

Unequal Division of Community Property in an Arizona Divorce.

Unequal Division of Community Property in an Arizona Divorce.

It is important to understand apportionment of assets ordered be a judge in an unequal division of community property in Arizona.  The Court of Appeals of Arizona granted review of Anthony Toth, Petitioner-Appellee, v. Gloria Snyder Toth, Respondent-Appellant to consider whether an equitable distribution of marital assets would require that each party, in this case, receive an equal distribution. It was concluded that this case does not require an equal distribution of assets to provide the parties with an equitable distribution of community assets. The court also holds that joint tenancy property should be treated similarly to community property under Arizona law (A.R.S. § 25-318(A). One year after meeting at a senior citizens dance in Mesa, Arizona in 1992, Anthony Toth and Gloria Snyder Toth were married (Anthony, age 87 and Gloria, age 66). The day after the wedding, Anthony withdrew $140,000 from his own sole and separate funds in order to purchase a home and placed it in joint tenancy with his new wife with right of survivorship.

Less than a month later, on January 10, 1994, Anthony filed for an annulment. The final decree of dissolution was entered September 19, 1995, with the house being the only marital property that needed to be divided. The court awarded $15,000 to Gloria Snyder Toth with the remainder being awarded to Anthony Toth. In response to the court’s decision, Gloria appealed. The Court of Appeals of Arizona reviewed the case and decided Arizona law pertaining to this issue requires that joint property requires a substantially equal division unless provided with a sound reason to the prevent such distribution. Sound reason being limited to certain statutory factors: excessive/abnormal expenditures, fraud, concealment or destruction. The court of appeals came to the decision that the trial court had abused discretion by ordering an unequal division of the joint tenancy property. The decision was reversed.

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

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

Equitable Versus Unequal Division of Community Property in Arizona

The dissenting opinion of Judge Kleinschmidt was that there was a broader meaning of “equitable” in comparison to what the majority was assigned to the term. As he believed that an important issue of Arizona law was decided incorrectly, Anthony’s petition for review was granted. Gloria believes that the law entitles her to 50% of the house purchased the day after her marriage to Anthony Toth. She states that the “gifted property” is her sole and separate property. Under Arizona statute, two types of property are treated alike for dissolution purposes (even though they are different): joint tenancy property and community property. Thus the court should provide an equitable division of all such property. On this premise, the court rejected Gloria’s argument for her share of the joint tenancy property to be treated as her separate property upon dissolution of the marriage.

As a “gift” from her former husband, Gloria argues that her share of the property should be considered irrevocable according to the law of gifts, i.e. if one spouse purchases property with separate funds and places it in joint tenancy, a presumption of gift exists. The presumption of gift means that it is presumed that the actions indicate that the spouse making the purchase intended to provide a gift to the spouse with the gift being one-half of the property. While this is true, it is also true that gifts of joint tenancy are not irrevocable. The gift of joint tenancy, such as occurred in this case, is made in expectation of a permanent relationship. If the relationship ends prematurely, the joint tenancy is completely subject to equitable division according to Arizona statute. In this instance, the “gift” to the non-purchasing spouse is an equitable right in the property – not an irrevocable gifted interest in one-half of the property. According to Arizona state statute, all marital joint tenancy property is to be divided equitably whether it is “gifted” or not.

Equitable Division of Joint Versus Community Property in Arizona

When a Court Will Divide Community Property Unevenly.

When a Court Will Divide Community Property Unevenly.

Gloria argues that Arizona state statute requires that joint tenancy property receive an equitable division unless there are exceptional circumstances to consider. She further argues that any exceptional circumstances must be in relation to the property rather than to each other in order to prevent the upholding of the statute’s requirement for equitable division. She insists that considering the duration of the marriage in relation to equitable division to be an inquiry into fault which is prohibited by Arizona state law. The court disagrees. Firstly, the court interprets the statute to mean equitable, not equal with the court determining what is equitable on a case by case basis. The court also found that the statute pertaining to this case does not limit “exceptional circumstances” to those in direct relation to the property, but to the case itself. Thus the length of the marriage is to be considered in determining an “equitable” division. It was found that in case, the meaning of equitable was something other than equal.

The last argument presented by Gloria was that the court based their decision, in whole or in part, on the determination of fault which is prohibited by law. Her claim was based on the fact that the trial court was presenting a finding when they stated that she had not made what they saw as a “good faith effort to create a viable marriage.”

The memorandum decision of the court of appeals was vacated. The case was remanded to the superior court in order to obtain additional consideration due to the opinion and evidence provided by the dissenting judge: the court may offer parties equitable division of property rather than an equal division of property and the source of funds can be considered when making the decision. The court should consider available equitable factors that may affect the outcome, but should still not consider the fault of either party. After reconsideration of the details of the case in relation to Arizona state law, the court may affirm its prior allocation so long as it is determined that fault played no role in the original determination by the court.

Call us at (480)305-8300 to schedule your personalized consultation with one of our experienced Phoenix and Scottsdale Arizona community property attorneys.

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