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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.

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.

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