Saturday, 16 November 2013 20:16

What Happens to Real Estate in a Divorce?

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What happens to jointly-held property, specifically real estate, when a married couple divorces in Arizona? It depends on what the divorce decree says, but first, let’s look at different ways couples hold joint property. They can hold property in joint tenancy, which means that each spouse holds an undivided one-half interest in the property and that, if one spouse dies, the other spouse owns the property: the deceased spouse cannot leave the property to someone else in a will. A married couple can also hold property as community property, which means that the marital community owns the property and if one spouse dies, the other spouse owns the property, like in a joint tenancy. Finally, a married couple can own the property as a tenants in common. The key difference between a tenancy in common and the previous two ways to hold property with a spouse is that when a spouse dies, that spouse’s portion of the property does not belong to the surviving spouse. The deceased spouse can leave the property to someone else in his or her will.

In Arizona, when a married couple divorces, the divorce decree determines what happens to the property. The decree will usually say who keeps the real estate property. A divorce decree can be recorded and is effective to transfer title. Therefore, if a decree assigns property to one spouse and the two former spouses never change the deed, the property still belongs to the spouse listed in the decree. Still, the former spouses should execute a deed in order to avoid a mess when one of them dies.

Now, the interesting question is what happens to jointly-held property that the divorce decree omits? In Arizona, property held in joint tenancy or as community property that the divorce decree omits becomes by operation of law (i.e., "automatically") property held by tenants in common. Therefore, if a couple owning property in joint tenancy or as community property gets a divorce and the decree omits the property, one former spouse does not own the other spouse’s half of the property if the other spouse dies. The deceased spouse’s portion of the property will pass according to the deceased spouse’s will or, if the deceased spouse has no will, to his or her heirs at law (surviving spouse; if no surviving spouse, to surviving children and/or grandchildren, great-grandchildren, etc.; if no children, etc., to surviving parents; etc.).

If you get a divorce, make sure the terms of your decree divide all real estate. The State of Arizona has seen some messy situations caused by the failure to divide real property in a divorce decree.



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