The decision to get a divorce is not often an easy one. It’s an emotional decision for many, and one that will have many different implications. It’s easy to get overwhelmed with the process but there are a few ways to help make things a little less complicated.
Specifically, the division of property can leave a divorcing couple scratching their heads. After being married for a while, they might not remember who purchased what and with what money. “Did we buy the couch using your bonus check a few years back?” “Did the car payments coming out of our joint checking account?”
It’s helpful to know that Arizona is a community property state. That means that anything a couple buys or acquires during the duration of the marriage is owned by both the husband and the wife. This does not include things like inheritances or gifts. There are exceptions that are considered separate property. And to make things even more confusing, come property is considered both separate property as well as community property.
With all the confusion that can result from property division, what are some ways to make the process a bit easier? One thing you can do is make sure you have copies of all pertinent records. Documents that can identify what source of money was used to buy a certain piece of property can help clarify what type of property it is. It’s also extremely helpful to know whether you or your spouse has debt. Unexpected debt that is shared between spouses can be a nasty surprise.
It can also be extremely helpful to understand the tax implications of decisions made during the division of property. Sometimes it makes more sense to keep the house, while in other situations it might be better to sell.
Ultimately, a great way to ensure the best outcome for you is to work closely with an attorney who knows what laws govern property division. With so many types of property and potential consequences, someone who understands the process can be helpful.
Source: Forbes, “Protecting Your Finances In A Divorce: Essential Dos And Don'ts,” April 8, 2014.