Dividing Community Property and Debts in Mediation

When explaining community property laws during divorce mediation, clients frequently respond: “But he didn’t pay for any of my new car or the monthly payments. It is all coming from my income – you’re saying that he is entitled to half of its value?” or “So you’re saying it doesn’t matter if she was unfaithful? She is still entitled to 50% of everything?”

Arizona is a community property state, so if a case is litigated in front of a judge, the presumption is that everything is community property. Unless an attorney can successfully argue that an asset is separate property (e.g. an asset gifted or inherited to one party alone), a judge will have no choice but to adhere to community property laws and divide everything equally between the couple. Similarly, unless an attorney can successfully argue that expenditures by one party in the marriage amount to “marital waste,” any existing marital debt will be allocated equally between the couple.

However, in mediation, decisions are made by the divorcing couple, not a judge. Accordingly, if a couple agrees to divide assets and/or debts unequally for any reason, they can do so – and the court will approve it.

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