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Understanding property division and community property

Resolving issues related to the equitable division of property and assets continues to be one of the most difficult parts of the divorce process. Divorce involves the legal separation of two people whose lives were intertwined, so the property shared between them and accumulated during the marriage must be divided between the divorcing spouses. Essentially, Arizona law recognizes three primary types of property: non-marital property, separate property and community property. Sometimes these categories overlap but understanding the distinction is critical during property division.

Non-marital property is property that either spouse possessed or acquired prior to the marriage. This non-marital property is also classified as separate property because it is separately-owned by only one spouse. Separate property refers to any property that is also individually owned by only one spouse and not recognized as marital or community property. Examples include gifts or inheritances that one spouse receives (whether during or prior to the marriage) and all increases in that property (i.e., growth, interest, etc.)

In contrast, Arizona law classifies all property acquired by the spouses during a marriage as community property. Community property can be in nearly any form: earnings, real property, assets, personal possessions, investments, cash, jewelry, cars, home furnishings, etc. The category of community property also commonly includes retirement plans and pensions.

Understanding the difference between these categories of property is important because a spouse will have to provide proof of any property that he or she is claiming to be non-marital or separate property. After adequately proving separate ownership to the divorce court, the person will be allowed to retain 100% of that separate property. In contrast, community property must be divided fairly. It is important to understand that "fair" is not the same as "equal." Because it is often difficult to divide certain types of property, the final property division arrangement may appear to be unequal on its face despite the court finding it to be a fair division.

Source: Arizona Supreme Court, "Things You Should Know About Divorce in Arizona," accessed on Nov. 25, 2014

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