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Property Issues

Characterization of Property

The first thing to decide is the character of the property. If it is community, it can be split 50-50. If it is sole and separate, it is yours and does not need to be divided. At the end of the divorce, you will want to divide the community property approximately equally. This includes the house, furniture, cars, boat, bank accounts, savings, stocks, investments, pensions and debts. You also need to be aware that each spouse has an obligation to disclose all property under the Rule of Family Law Procedure 49. Hiding assets will not be treated kindly by the court. Even sole and separate property must be disclosed, so the other spouse has an opportunity to determine if it really is sole and separate.

Property Worksheet

First, list all your property. You can find a complete worksheet that can be purchased on our website, www.bestlawaz.com. It will be very helpful for you to fill this out as you get started. You need to first identify all property, regardless of whether you think it is community or sole and separate. Then, after you identify all your property, you can review the statutes and the Question and Answer section to determine how you and your spouse would like it to be divided. You can return to the worksheet and fill in how you think it should be fairly distributed. You and your spouse can each fill out a worksheet, or you can fill it out together.

Resolving Your Property Issues

The House

Is it community or sole and separate? If it is sole and separate, does the other spouse have an interest in it? Here are some questions to answer:

Whose name is on the deed?

Did you and your spouse purchase it during the marriage?

Where did the money come from for the down payment?

If the house was purchased during the marriage with money from the marriage, such as money from your jobs, it most likely will be considered community property and will be divided equally.

Who, if anyone, wants to live in the home during the divorce?

Do you want to sell the house, either because neither party can afford it or because neither party wants to live there?

If the House is Community Property

There are several options that you can consider:

Option 1: One spouse stays in the house and makes all the payments; the parties get the house appraised and decide the value of the house. Then the party who wants to live in the house pays the other spouse half the value of the house. This can be paid with cash in a refinance or can be ?horse-traded? with other assets.

Option 2: The parties can sell the house and split the proceeds equally. The parties can split the costs of upkeep until the sale, or they can decide that one party lives there and makes all payments until the sale. Or, one spouse could move out and then combine all living expenses, with each paying half of those total expenses or each paying their prorated share, according to each party?s income.

Option 3: One party stays in the house for a predetermined amount of time, such as one to two years, until a refinance must be undertaken.

There are a number of creative ways to determine the division; it is limited only by imagination and the ability to cooperate. The end goal is to split the proceeds 50-50 and not make the process more difficult than it needs to be for either party.

If the House is the Sole and Separate Property of One Spouse

If only one spouse?s name is on the deed, or if one party owned the house prior to marriage, it might be considered that spouse?s sole and separate property.? This can become a complicated legal issue and you should seek the advice of an attorney if you have any questions.

Personal Property

Vehicles: Usually spouses have driven one vehicle and that is the one they want to keep. There may be an adjustment if one vehicle has a greater value than the other. For instance, if the truck has an equity of $10,000 and the SUV has an equity of $20,000, one person has $10,000 more value than the other. The truck spouse is due an additional $5,000 on his/her side of the ledger (the vehicles together equal $30,000 so each spouse should get a value of $15,000; the truck spouse only has $10,000 in value, so is due an additional $5,000).

The Furniture

HERE ARE SOME WAYS TO DIVIDE YOUR PROPERTY:

Idea #1: Using your list, have a ?draft,? where one party chooses, then the other, until the list has been divided.

Idea #2: Each party discusses what they want and then split the rest as above.

Idea #3: One party writes down all the community property two separate lists. Then the other party picks which list they want.

Idea #4: The property is appraised (garage sale value) and then one party pays the other.

Idea #5: Just talk and work it out. This too, can be horse-traded with other assets if one party really wants certain property. Remember that used furniture is not that valuable; it is not worth the amount you purchased it for. One of you might want or need more furniture than the other and you could exchange it for the extra value of the vehicles. In other words, you get half the pie, but you can negotiate what pieces make up your half.

Bank Accounts, Savings Accounts and Investment Accounts

If these accounts were opened and contributed to during the marriage, they will be considered community. If one spouse had an account before marriage and did not commingle community funds, it will be sole and separate property of one spouse. If there are complications, this may be a question for an experienced family law attorney.

Do It Yourself

 

What exactly does it mean to go through your own divorce without an attorney? It means that you will file your paperwork, understand the rules and follow the law; just as if you were an attorney. That may sound a bit daunting at first, but not if you follow these step-by-step procedures. If controversy and arguments arise, do not despair: you may still be able to salvage your ability to go through this without an attorney by understanding and outlining your issues, and perhaps using a mediator. A mediator is a neutral third party who will visit with you and help you and your partner work out any disagreements that you are having as you go through this process.

The court will also hold you to the standard of an attorney, so if you are going to do this without an attorney, learn the rules and procedures of the court, so you are educated about what is going on.

Community Property

 

Once property is considered community property, it must be divided equitably between the spouses. That is why it is important to determine the characterization of the property at the beginning of the divorce. There may be arguments about whether property is community or not, but most property is fairly easy to characterize. Property includes real property, which is land or a house. Property also includes your furniture, bank accounts, savings account, investments and deferred compensation plans, such as 401Ks or IRAs.

Property for division, however, does not include Social Security benefits. Social Security law governs your Social Security account and it cannot be changed in a divorce decree. If you want to know specific information about your Social Security benefits, you might want to contact the Social Security Administration to find out about your specific income. Most property disputes revolve around houses. For some reason, many couples maintain complicated information regarding when and how a house was purchased and whose name is on the deed. It is important that you know if your name is on your house deed. You can check that on the Internet, courtesy of the Maricopa County Recorder?s Office at recorder.maricopa.gov/.

How do the vehicles get divided during my divorce?

Usually spouses have driven one vehicle and that is the one they want to keep. There may be an adjustment if one vehicle has a greater value than the other. For instance, if the truck has equity of $10,000 and the SUV has equity of $20,000, one person has $10,000 more value than the other. The truck spouse is due an additional $5,000 on his/her side of the ledger (the vehicles together equal $30,000 so each spouse should get a value of $15,000; the truck spouse only has $10,000 in value, so is due an additional $5,000)

What Happens if the House is Community Property? What if it is Sole and Separate?

Option one is one spouse stays in the house and makes all the payments; the parties get the house appraised and decide the value of the house. Then the party who wants to live in the house pays the other spouse half the value of the house. This can be paid with cash in a refinance or can be “horse-traded” with other assets. Option two is the parties can sell the house and split the proceeds equally. The parties can split the costs of upkeep until the sale, or they can decide that one party lives there and makes all payments until the sale. Or, one spouse could move out and then combine all living expenses, with each paying half of those total expenses or each paying their prorated share, according to each party’s income. Option three is one party stays in the house for a predetermined amount of time, such as one to two years, until a refinance must be undertaken.

There are a number of creative ways to determine the division; it is limited only by imagination and the ability to cooperate. The end goal is to split the proceeds 50-50 and not make the process more difficult than it needs to be for either party.

If only one spouse’s name is on the deed, or if one party owned the house prior to the marriage, it might be considered that spouse’s sole and separate property. This can become a complicated legal issue and you should seek the advice of an attorney if you have any questions.

What Property Does Not Get Divided in a Divorce?

According to Arizona Revised Statute section 25-213, “separate property” cannot be divded by the court. Separate property consists of items owned before the marriage or received as an inheritance or gift during the marriage and kept separate during the marriage. It is possible for a person to gift his or her separate property to community property–for example, re-titling the property as community property.

What is Considered Community Property?

According to Arizona Revised Statute, Section 25-211, generally, anything that a married couple accumulates during the marriage is considered community property, that is, both spouses own an undivided share of the whole. Exceptions to this general principle include those assets acquired prior to the marriage, by gift, devise (a will) or descent (inheritance). Because the Arizona courts start with a strong presumption that anything acquired during marriage is a community item, the spouse claiming a particular item is not community property has the burden of proving otherwise.

How Does Arizona Law See Division of Property?

You and your spouse may decide this for yourselves, but it is important to note that Arizona is a community property state. In accordance with Arizona Revised Statute 25-211, community property is all property acquired during the marriage by the efforts of either party through the date of service of the Petition for Dissolution. The court presumes that each spouse is entitled to 50% of the assets acquired during the marriage. Also, the courts generally seek to divide debt equitably in a divorce case. This does not automatically mean that each spouse will have 50% of the debt assigned to them. The court will take into consideration the spouse’s income, ability to pay debts and issues of waste of community property assets.

What Would Happen to Mr. Zuckerberg in Arizona Without A Pre-nup?

What if he had no pre-nup? Does his wife now own part of Facebook? For starters, Arizona is a community property state and that means that all property acquired during marriage is presumed to be “community” property which means it is owned equally. But there is also the concept of sole and separate property which is property owned prior to marriage or property acquired by gift or a will. Mrs. Zuckerberg would be entitled to a “lien” on Mark’s sole and separate property and that is when the litigation usually begins…if people do not have a pre-nup. But we are not going to worry so much about all that now (but if no pre-nup, he could get a post nup) and instead we wish the new couple all the best for a long and happy marriage.

Do You Have To Move Out Of Your House During Divorce?

Your husband wants a divorce and tells you to get out of the house. You wife is angry and tells you to move out, she is getting a divorce. What do you do? This is often the way divorces begin and it is unfortunate. In Arizona, a house that was purchased during the marriage is presumed to be community property, in other words owned by each party. Once one party leaves a home, the court may later determine that the remaining party can change the locks, subject to the leaving party getting their personal property. Every case is different and there is no one answer to this question. If you find yourself in this position, it would be wise to seek the advice of an experienced family law attorney at the Best Law Firm. We can help! We offer free telephone consultations. We also offer in person consultations at our office for $200 per hour, with no requirement to retain us. We are there just to help you and answer your questions specific to your situation.

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