What Happens If A Spouse Hides Assets During Divorce in Arizona?

Yes. Arizona is a community property state, which means property, including income and real property, acquired during the marriage belongs to the community.  The law also distinguishes other types of property (e.g., separate property).

As an experienced Phoenix asset division lawyer, I can discuss your assets and debts and thoroughly counsel you regarding the various categories of property that may apply to your dissolution.

Separate property in a marriage refers to property owned by one spouse individually, making it non-community property. This means that in the event of a divorce, the separate property is not divided equally between the spouses.

Arizona law defines separate property as property that:

• Was owned by an individual before marriage;
• Was acquired by an individual during the marriage through gift, devise, or inheritance;
• Is a recovery for personal injuries or pain and suffering (excluding wage replacement benefits); or
• Was acquired by a spouse after service of divorce papers (if the petition results in a decree of dissolution or annulment).[1]

It is critical to note that, in court, the burden of proof is on the spouse claiming that property is separate, and any commingling of separate property with community property can make it difficult to establish that the assets are truly distinct. As such, it is vital to consult with an experienced asset division attorney if you have questions regarding your separate property.

[1] Ariz. Rev. Stat. Ann. § 25-211.

If separate property is commingled with marital property, it can become challenging to determine what portion of the commingled assets are separate property and what portion is marital property. Generally, if separate property is commingled in such a manner that it becomes challenging to trace the separate property, Arizona courts may treat the commingled asset as marital property.

For example, if an individual inherits money during a marriage (which is typically considered separate property under Arizona law), but the funds are deposited into a joint bank account with a spouse (which is marital property), it may be challenging to prove what portion of the funds in the account are separate property. Consequently, if the individuals later divorce, the entire amount in the joint account may be subject to division as marital property.

As another example, if separate property is utilized to purchase a marital asset, such as a home or car, the asset may be considered marital property, even if the majority but not all of the purchase price was paid with separate funds.

Because of the financial risks associated with commingling separate property, it is advisable to consult with a pragmatic asset division attorney who can explain the potential ramifications of commingling funds and provide guidance on how to best insulate your personal assets in the event of a divorce.

When a spouse files a Petition for Dissolution of Marriage with the court to obtain a divorce, the petitioner (the filing party) must disclose all property owned and its value, including community and separate property.  The petitioner is also required to file, and later formally deliver or “serve,” the respondent (the other party) with a Preliminary Injunction, which is a court order prohibiting certain conduct.

The Injunction applies to both spouses and prohibits the following while the dissolution is pending:

• The parties may not hide earnings or other community property from the other.
• The parties may not take a loan against community property.
• The parties may not sell, transfer, mortgage, or dispose of community property.

The respondent is also required to disclose all property when filing a response to the petition.   If a respondent fails to file a response, the case proceeds without the individual’s participation.

If either party violates a Preliminary Injunction, the court may find the violator in contempt of court and may impose sanctions (i.e., fines) and possibly jail time.

If you must  face a deposition during the divorce, your former spouse’s attorney may ask you specific questions about your lifestyle and any debts you have accrued. Watch this video to prepare yourself for some of those potential questions.

VIDEO

Schedule A Consultation With An Experienced Phoenix Asset Division Attorney Today.

If you are contemplating divorce and have asset division concerns, I invite you to call Thomas Law Offices to schedule a consultation with a dedicated and tenacious asset division lawyer to explore your legal rights regarding property division and your legal remedies in the event your spouse violates a Preliminary Injunction.

As a property division attorney with almost three  decades of relevant legal experience, I will strategize with you to uncover assets, including retaining experts such as private investigators and forensic accountants. I also possess the skill and knowledge to obtain an equitable and successful result to your dissolution.