Separate property is property that belongs to one spouse rather than to the marital community. In Arizona, sole and separate property includes property owned before the marriage, property received as a gift during the marriage, and property received through inheritance during the marriage. The court cannot award one spouse's separate property to the other spouse as part of the community estate.
The challenge with separate property is proving it. The burden is on the spouse claiming separate property to establish its character. Bank records, deed records, gift letters, probate documents, and transaction histories are all potentially relevant. Property that was separate at the time of marriage can lose its separate character through commingling with community funds.
Community funds used to benefit separate property can give rise to a community reimbursement claim/lien. If community income was used to pay the mortgage on a separately owned home the community may be entitled to partial reimbursement of those payments before the remaining equity is awarded to the separate property spouse.
Separate property analysis in complex cases such as inherited businesses, pre-marriage investment portfolios, real estate purchased before marriage and improved during it can require expert testimony and forensic accounting. The earlier this analysis begins the better. Records from years or decades ago may be difficult to locate if they are not preserved.
Under A.R.S. § 25-213 property acquired by gift or inheritance during marriage is the separate property of the recipient spouse. It is worth noting that property acquired after service of the dissolution petition is also generally the separate property of the acquiring spouse.
We can conduct your consultation by phone, zoom or in person. Call us today at (480) 219-2433 or fill out the form below.