Many people contemplating divorce in Arizona worry about property division matters. After all, Arizona is a community property state. If spouses can’t arrive at their own property division settlement, a judge is likely to split all of their property and debts equally between the spouses.
The idea of dividing everything from home equity to retirement savings in half makes people feel anxious about their future. They may worry about being able to afford to retire or making mortgage payments after they withdraw equity to compensate their spouse. They may also worry about losing assets that may have emotional significance to them.
There are some assets that are not subject to division under Arizona’s community property statute. Specifically, nonmarital assets or separate property are usually not part of the property division process.
What resources can people potentially claim as their separate property in an Arizona divorce?
Items acquired before and after marriage
Some assets are clearly separate property because one spouse had already acquired those assets before they got married. People can also treat assets as separate property if they secured them with income earned after officially separating from a spouse. The income and property people acquire before marriage or after officially separating are typically not subject to division during Arizona divorce proceedings. That rule may even apply to interest or other forms of income generated by separate property.
Inheritances and gifts
Most of what people acquire during marriage is vulnerable to division. The primary exceptions are gifts and inheritances received from outside parties. Those assets could have substantial financial value and may also have emotional significance to the recipient spouse. So long as people do not commingle their inheritance or gifts with marital property, they may be able to preserve those assets in the event of a divorce.
It is also worth noting that some spouses specifically designate certain assets to remain their separate property by signing prenuptial or postnuptial agreements. Those assets may not be at risk of division either.
Learning more about how Arizona handles asset division in litigated divorce scenarios can help those trying to negotiate a settlement. Those who know what to expect if their case goes to court can make more informed decisions about their situation overall.