What Happens to the House in an Arizona Divorce?

For most couples, the family home is the biggest asset in a divorce. If you're going through a divorce in Arizona, you probably have questions about what's going to happen to it. Here's what you need to know.

Arizona is a Community Property State

Arizona follows community property law, which means that assets acquired during the marriage generally belong equally to both spouses. If you and your spouse purchased the home during the marriage, it is most likely community property, regardless of whose name is on the deed.

There are exceptions. If one spouse owned the home before the marriage, or if the home was purchased using separate property funds (such as an inheritance or pre-marital savings), that spouse may have a claim to some or all of the home's value as separate property. These situations can get complicated quickly, especially when community and separate property have been mixed together over the years.

What Are the Options?

When it comes to dividing the family home, these are the two most common approaches:

One spouse buys out the other. This is the most common outcome when one spouse wants to stay in the home, typically because the children are living there. The spouse who keeps the home refinances the mortgage in their name alone and pays the other spouse their share of the equity.

The parties sell the home and divide the proceeds. If neither spouse can afford to keep the home on their own, or if both want a clean break, selling is often the most practical solution. The proceeds are divided after paying off the mortgage and any costs of sale.

What if We Can't Agree?

If you and your spouse cannot agree on what to do with the home, the Court will decide for you. Arizona judges have broad discretion in dividing community property and will look at a variety of factors, including each spouse's financial situation, whether children are involved, and what is fair and equitable under the circumstances.

What About the Mortgage?

This is where things can get tricky. If both spouses are on the mortgage, both remain legally responsible for that debt until it is refinanced or paid off, regardless of what the divorce decree says. A divorce decree does not release either party from their obligations to the lender. If your spouse is awarded the home and fails to make payments, your credit is still at risk. This is why a refinance (not just a court order) is the proper way to protect yourself.