Property rights during physical separation
Every month, I receive phone calls seeking advice on divorce. More and more I listen to a spouse that decided years ago to physically and financially separate from their other spouse without filing for divorce or legal separation. They reason and hope that time away will do the marriage good. I understand this thinking and at a certain level it makes sense. Many of these couples have been married for 10+ years, have children, and truly want to give their marriage a second chance and think a little time away will “reboot” the relationship. Then there are others who find themselves on opposite sides of the country and, for whatever reason, simply never get around to filing for divorce for a number of reasons.
During this time, one or each spouse continues to work, contribute to retirement, accumulate debts and assets, and exist as a single person. But what happens when one files for divorce in Arizona? Does the law treat the spouses as if they’ve lived separate and apart? Not necessarily.
According to Arizona law the court is tasked with dividing all property (assets and debts) from the date of marriage to the date of service of the petition for dissolution. While an artful attorney may argue to a trial court that it is not equitable (fair) to divide the assets at the date of service of the petition when the spouses have lived separate and apart for a certain number of years, the trial court can divide all property based on the assets and debts possessed at the date of service. What does this mean for the spouse that has continued to save towards retirement, accumulate service years towards a pension, or build up a rainy day fund? The other spouse receives half.
Now, if the spouses agree to divide based on the date of separation then they can enter those agreements and the trial court will adopt the same. But when the spouses do not agree, not immediately filing for or setting a deadline to file for dissolution or legal separation can have a serious impact on your present and future personal finances.