Separate Property Stays Separate
The first step in property division is straightforward: each spouse keeps what is solely theirs. Separate property typically includes assets owned before the marriage, gifts received individually, and inheritances. The court assigns each spouse's sole and separate property back to them. Everything else, including community property, joint tenancy assets, and other property held in common, gets divided equitably.
The court shall assign each spouse's sole and separate property to such spouse. The court shall also divide the community, joint tenancy and other property held in common equitably, though not necessarily in kind, without regard to marital misconduct.
A.R.S. § 25-318(A)An important detail for couples who moved to Arizona from another state: property acquired outside Arizona is treated as community property if it would have been community property had it been acquired here. This quasi-community property rule can significantly affect how out-of-state assets are divided.
Debts, Liens, and Creditor Protections
Property division is not just about assets. The court also considers all debts and obligations tied to the property, including taxes that would come due on a sale. The court can impress a lien on either spouse's separate property or awarded marital property to secure payment of the other party's interest, community debts, or child support and maintenance obligations.
One detail that catches many people off guard: a divorce decree assigning a debt to one spouse does not release the other spouse from the creditor's perspective. The statute requires notice to both parties explaining that creditors are not bound by the court's debt assignment. If a former spouse fails to pay an assigned debt, the creditor can still pursue the other spouse. This makes post-divorce financial planning, including updating estate plans and beneficiary designations, essential.
