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Determining Community Versus Sole Property in Arizona | Hildebrand Law, PC

Community Lien in Arizona

If you are going through a divorce, you may have heard about a community lien on sole and separate property in Arizona.

Arizona rulings have recognized the community may gain a community property lien against the sole and separate property of a spouse if either spouse, through labor, effort, or payment of community money, increasing the value of a spouse’s sole and separate property or reduces the debt associated with that separate property.

Community Lien on a Sole and Separate House

One common example we see occurs when the parties choose to live in a home owned by one spouse before marriage; thereby making that house the sole and separate property of the spouse who owns it.

However, the parties begin investing community money to make improvements to the home and to pay the monthly mortgage.

The community, therefore, may have a community lien against the home to the extent such improvements increased the value of the home or decreased the mortgage balance owing on the home.

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Community Lien on a Sole and Separate Business

The second most common example of the creation of a community lien is when one spouse owns a business before marriage, and the value of that business increases during the marriage due to the labors of either or both spouses or the investment of money into the business.

The community, therefore, may have a lien against the business for income held within the business and the increase in the market value of the business.

There is, however, an argument to counter the community lien claim, which is to argue the community had already been fairly compensated during the marriage to the extent of the amount the court calculates the community lien to be.

The community may also have a community lien against the property, such as a home or business, owned by one of the spouses as his or her sole and separate property even if that property decreased in value during the Marriage..

The Arizona Court of Appeals in the Evans v. Evans case addressed the particular issue of whether profits earned during the marriage from a sole and separate business are community or separate property.

The decision rests upon how much of the profits were due to the labors of either spouse.

The Arizona Court of Appeals spoke about community property liens and how to calculate the value of a community property lien in the case of Drahos v. Rens.

If you need information about a community lien on sole and separate property in Arizona, you should seriously consider contacting the attorneys at Hildebrand Law, PC. Our Arizona divorce attorneys have decades of combined experience successfully representing clients in divorce cases in Arizona.

Our family law firm has earned numerous awards such as US News and World Reports Best Arizona Family Law Firm, US News and World Report Best Divorce Attorneys, “Best of the Valley” by Arizona Foothills readers, and “Best Arizona Divorce Law Firms” by North Scottsdale Magazine.

Call us today at (480)305-8300 or reach out to us through our appointment scheduling form to schedule your personalized consultation and turn your Arizona divorce case around today.

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Scottsdale Arizona Divorce, Family Law, and Estate Planning

Other Frequently Asked Questions on Sole and Separate Property and Liens in Arizona:

Does Arizona recognize sole and separate property?

Yes, Arizona recognizes sole and separate property as property acquired before marriage, property received as a gift or inheritance, and property acquired after a divorce or legal separation is file and served on the other spouse.

How do you overcome the presumption of community property in Arizona?

To overcome the presumption of community property you must prove by clear and convincing evidence the property was acquired before marriage, was a gift or inheritance, or was obtained after a divorce or legal separation was served on the other spouse. Clear and convincing evidence would include documentation or an admission of the other spouse.

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Determining Community Versus Sole Property in Arizona | Hildebrand Law, PC