Community Property vs. Joint Tenancy
A.R.S. § 25-318(A) mandates equitable distribution of joint tenancy assets as well as community property upon dissolution of marriage, absent fraud, excessive or abnormal expenditures, destruction, or concealment. Many couples take title to real estate as "joint tenants with right of survivorship," and assume that "joint tenancy" and "community property" are just different ways of saying the same thing. That is not the case. Joint tenancy has some similarities with community property, but it also is different in crucial ways. That's why you need a Phoenix Divorce Lawyer helping you.
The distinction has been discussed in several Arizona cases concerning property division. In
Whitmore v. Mitchell, 152 Ariz. 425 (1987), the Court of Appeals noted that the terms "joint tenancy" and "community property" are often used interchangeably, but cautioned that the very reason for different ownership interests (for example, tenancy in common, joint tenancy, or community property) is because the law treats such interests differently.
If a spouse uses separate funds to purchase property that is titled as joint tenancy or community propery, there is a presumption that the spouse intended to make a gift to the community, or a gift of a one-half interest to the other spouse as a joint tenant if titled as joint tenancy. Absent an agreement to the contrary, a court may not, upon dissolution, order a substantially unequal division of either community property or joint tenancy property solely for the purpose of reimbursing one of the parties for expending his or her separate funds to initially acquire the property. The rules for community property and joint tenancy, however, differ when it comes to expenditures made
after the initial acquisition, such as to pay taxes on the property. Such subsequent expenditures of separate funds for the benefit of
community property may
not be the subject of any reimbursement upon
divorce. However, if the property is held as
joint tenancy, and one joint tenant uses separate funds to pay the joint obligation (such as taxes or mortgage payments), the paying joint tenant is entitled to reimbursement from the community.
The crucial distinction between an initial expenditure to acquire a joint tenancy asset and subsequent expenditures to satisfy existing joint obligations is that there can only be a right to reimbursement when a joint obligation exists. The obligation does not come into existence until the property is purchased. Accordingly, one is not entitled to reimbursement for any sums spent to acquire the property.