How to talk about divorce and community property
Written by Craig Cherney

Collaborative divorce and community property

Divorce is never easy, and when it’s time to discuss the division of assets, it can feel particularly hard. Arizona is a community property state. This means that generally speaking, anything acquired during the marriage by either spouse belongs to both spouses. In a divorce, community property must be equitably divided between them.

What is Community Property?

Community property covers a large range of assets in a marriage. While houses and cars are the first things that come to mind, community property also includes bank accounts, retirement accounts, wages, IRAs, investments, businesses, ownership interests, boats, furniture, art, any real estate, and more.

With very few exceptions, the equitable division of community property means that these items will get divided equally.  In some circumstances, this is a daunting prospect, but it doesn’t have to be.

How Does Collaborative Divorce and Community Property Work Differently?

In a Collaborative divorce,the process is handled entirely out of court. For spouses who are willing to work together,and who want to avoid leaving decisions up to a judge, a collaborative setting can be beneficial when dealing with divorce and community property.

In a collaborative divorce, the community property is divided based on how the parties agree, not based on how a judge decides. The collaborative process requires that both spouses are willing to be fair and honest, which will create the best possible outcome for everyone. Some examples include:

  • Both parties can agree to keep their own respective retirement accounts rather than splitting or dividing the accounts.
  • If there is more than one property, the spouses can decide who gets which; or whether to sell and split the proceeds.
  • If one spouse started a business during the marriage, they can work out a fair settlement regarding the value of the business and how the other spouse can be compensated for their interest.
  • If both spouses can agree, furniture and art can be inventoried and divided by who wants specific items, or both parties can agree to sell items and split the proceeds

Unless you started the marriage with a prenup, Arizona law regarding divorce and community property can leave all marital assets subject to division. When you choose to work collaboratively, you are able to do it in a way where both parties get a say.

Separate Property Versus Community Property

Separate property is property that either of the spouses acquired before the marriage. Separate property also includes property that was acquired during the marriage by gift or inheritance, as well as property acquired by either spouse after the date the Petition for Dissolution was served.  Separate property is not subject to division in a divorce. However, there are circumstances where the community acquires an interest in an asset that was otherwise separate property. Spouses often disagree about whether certain assets should be considered community property or separate property. Again, collaborative divorce can help avoid a high conflict situation. This type of divorce allows both parties to agree on a mutually beneficial outcome.

Why is a Collaborative Divorce a Good Option?

Divorce is a tough road and one where there are feelings of loss and uncertainty. Divorce and community property bring up a lot of issues and emotions. When you’re ready to work through the process of divorce out of court and in a way that works toward an outcome that benefits everyone, contact the professionals at Best Legal Choices.