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Spouses Selling Property And Incurring Debt In Arizona

In Arizona, each spouse has the sole management and control rights regarding each spouse’s separate property. Separate property is usually property that was owned before the marriage or received by inheritance or gift during the marriage. Other exceptions apply but these are the most frequent kinds of separate property.

With regard to community property, under Arizona law both spouses have equal management and control of it. And each spouse has equal power to “bind” the community, meaning that either spouse can incur a debt and the other spouse will be jointly liable. There are some exceptions, though. It is important to remember that although it’s good to know the general legal principles that pertain to your case it is more important to check to see if any exceptions apply in your situation.

In Arizona, either spouse may acquire, manage, control, or dispose of community property or bind the community, as mentioned above. The major, but not only, exceptions are the following:

  1. Any transaction for the acquisition, disposition, or encumbrance of an interest in real estate or lease of less than one year;
  2. Any transaction of guarantee, indemnity, or suretyship; or
  3. If a divorce, annulment, or legal separation petition has been served on the other spouse and the case results in a divorce or legal separation decree (rather than dismissal).

However, just because your spouse has the right to manage, control, and dispose of assets does not mean that your spouse can be reckless or deceitful with community assets. There are other statutes and caselaw decisions that protect innocent spouses from a spouse who exceeds the generally wide discretion given to spouses in Arizona to manage the community assets. These protections will be discussed in a later post.

In the meantime, just remember the general principles and if you think you are going to be getting separated or divorced, come in for a consultation to discuss your particular situation in detail so that you won’t make mistakes in handling your situation because you relied on incomplete information obtained on the web. The law is complicated, no matter how simple it may seem and no matter how smart you are. There is no substitute for at minimum getting advice from a competent, experienced Arizona family law attorney.

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