Dividing Assets in Divorce

Dividing Assets in Divorce: Legal Principles and Common Challenge

In a divorce, property or asset division is one of the most difficult tasks for divorcing couples. It is often a source of intense conflict and can make divorce proceedings stressful and long. Besides the emotional complexities, dividing assets in a divorce also involves legal complexities.

Arizona is a ‘community property’ state meaning the court divides marital property equally (50/50). It is critical to understand the Arizona asset division process, including the legal principles and common challenges.

Community Property and Separate Property

The classification of property as either community or separate is a major legal principle. Marital or community property is any property that you or your spouse earns or acquires during marriage. Community property can include real estate, bank accounts, stocks, business assets, investment accounts, life insurance policies, and retirement benefits. Arizona divides all marital property equally during divorce.

Separate property is any property that belongs to one spouse, especially property that the spouse owned before marriage. The law also considers gifts and inheritances that one spouse receives before or during marriage as separate property. Separate property remains the property of the spouse who acquired it and is not subject to division during divorce.

However, there are instances where separate property can become marital property, especially when it is mixed or commingled with marital property. For example, if you had $30,000 in savings before marriage but deposited them into a joint account with your spouse during marriage, they become marital property.

The Arizona Asset Division Process

The legal process of dividing assets in Arizona consists of several steps, including:

1. Identification. This is the first step in asset division and involves identifying all the assets the couple currently owns, including real estate, bank accounts, and debts. It is advisable to provide the necessary information promptly to avoid prolonging divorce proceedings.
2. Classification. After identification, the next step is to classify the assets as either community or separate property.

• Valuation. This step involves placing value on the community property subject to division. Valuation helps decide which property to prioritize in negotiations and settlement.

1. Division. The step finalizes the asset division process and involves the couple or the court dividing and distributing all the marital property.

Common Challenges in Dividing Assets in Arizona

1. Commingling

Commingling or mixing of separate property with marital property is a common challenge in asset division. Some people unintentionally mix separate property with community property. It can be challenging for the court when deciding if and how to return the property to the rightful owner.

2. Hidden Assets

This involves a spouse failing to disclose some marital property to keep them as separate property. The hidden assets may be cash, real estate, bank accounts, investment accounts, and retirement accounts.

Some of the tactics that a spouse can use to hide assets include:

• Hiding bill statements
• Transferring assets to other accounts, including overseas accounts
• Reporting lower income, including requesting employers to defer payments until after the divorce.
• Overstating debts
• Hiding cash and other tangible valuables in a safety deposit box

Hiding assets in an Arizona divorce is a criminal offense. It can result in serious consequences, including hefty fines and penalties. Yet, uncovering hidden assets is often complex. However, a skilled Tucson divorce attorney can help you. The lawyer can file a motion for your spouse to provide appropriate documents during the discovery process.

3. Valuation Disputes

This occurs when divorcing couples disagree on the real value of some marital properties subject to division. Disputes are common where the assets are of significant value. For instance, a couple may dispute the value of real estate or a business they co-own. Personal property like jewelry can also be subject to valuation disputes.

Having accurate valuations is critical for fair division of assets during divorce. It is advisable to hire a financial expert, including a qualified appraiser for accurate valuation to avoid disputes.

4. Assets in another State

Every state has its unique asset division laws and processes. For instance, unlike Arizona, most states are ‘equitable distribution’ states. Asset division can be challenging in situations where a spouse resides in another state or owns property outside of Arizona. However, a skilled divorce lawyer can help you divide assets in such cases. Your lawyer can petition the court to establish personal jurisdiction over your spouse.

5. Emotional and Psychological Factors

Most divorces are high-conflict and emotional, especially when dividing assets. The negotiation and settlement disputes can make asset division stressful for both spouses. Other emotional challenges include a spouse’s attachment to an asset like a car or a home. The attachment can be a huge challenge when they have to give up the property.

The long and expensive divorce process often leads to emotional challenges. You can manage emotional challenges by delegating negotiation and tasks to your attorney. However, you should also consider seeking the help of a mental health professional if experiencing significant stress.

Contact a Tucson Property Division Attorney

Divorce is often emotional and complex. Assets division makes it even more challenging for the divorcing couple. While some couples have an out-of-court settlement, others can’t agree on asset division. The court has to divide the property for them.

The court process often adds to the asset division complications. However, a knowledgeable asset division lawyer can help you navigate the complexities. Our skilled and experienced asset division lawyers at Liberty Audette and Associates will guide you through the asset division process and help you protect your interests. Contact us today for a consultation and to learn more about our services.