ARIZONA HOUSE OF REPRESENTATIVES Fifty-sixth Legislature First Regular Session
	Senate: JUD DPA/SE 4-3-0-0 | 3^rd Read DPA 16-13-1-0-0

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SB 1151: community property; spousal maintenance; documentation

Sponsor: Senator Kern, LD 27

Committee on Judiciary

Overview

Delineates requirements for a court to assess the value of a business interest for purposes of calculating community share in a proceeding for dissolution of marriage, legal separation or annulment and makes changes to existing requirements for calculating spousal maintenance and child support.

History

Arizona is what is commonly referred to as a community property state. This means that all property acquired by either spouse during a marriage, with some exceptions, is considered to be the community property of both spouses, and thus owned by each spouse in equal shares (A.R.S. § 25-211). Community property is distinguishable from sole and separate property, which includes a spouse's real and personal property that the spouse owned before marriage or acquired during the marriage by gift, devise or descent, as well as any increase in value, rents, issues and profits associated with that property (A.R.S. § 25-213).

Either party to a marriage may petition a court for dissolution of marriage, annulment or legal separation. The petition must allege that the marriage is irretrievably broken or void, that one or both of the parties desire to live separate and apart or, if the marriage is a covenant marriage that statutorily outlined requirements have been met (A.R.S. § 25-314).

In a proceeding for dissolution, annulment or legal separation, the court must assign each spouse's respective sole and separate property and equitably divide the community property, joint tenancy and other property held in common. The court may, in dividing the community property, consider all debts and obligations that are related to the property, including accrued or accruing taxes that would become due on the receipt, sale or other disposition of the property, in addition to the property's tax exempt status, if applicable (A.R.S. § 25-318).

A court is a dissolution, annulment or legal separation proceeding may order either spouse to pay spousal maintenance for various reasons enumerated in statute. In determining and awarding spousal maintenance, the court must follow guidelines established by the Arizona Supreme Court. If both parties agree, the maintenance order and decree of dissolution of marriage or legal separation is permitted to state that its maintenance terms cannot be modified (A.R.S. § 25-319).

The court may also order either or both parents owing a duty of support to a child, born to or adopted by the parents, to pay an amount reasonable and necessary for support of the child, and similarly must follow guidelines established by the Supreme Court in doing so. The current child support guidelines outline a process for a court to calculate the parents' combined adjusted gross income, which is then used to calculate the basic child support obligation. The maximum combined adjusted income under the current guidelines is set at $30,000 per month (2022 Arizona Child Support Guidelines).

Provisions

1. Requires a court that is assessing the value of a business interest to determine the community share to be paid to the spouse who will no longer maintain his or her interest in the business to assess the value of the business as of the date of service of the petition for dissolution, legal separation or annulment. (Sec. 1)

2. Specifies that, beginning on the date of service of the petition for dissolution, legal separation or annulment, the spouse who will no longer maintain an interest in the business interest is neither entitled to any share of the business's profits nor responsible for any new liabilities incurred by the business. (Sec. 1)

3. Mandates that any compensation to the business owner that is included in the value of the business, as specified above, cannot be used for the purposes of calculating spousal maintenance or child support. (Sec. 1)

4. Requires a spousal maintenance order and decree of dissolution or legal separation to state that its terms are unmodifiable unless the parties agree otherwise. (Sec. 2)

5. If a party stipulates that the party's income is at or exceeds the maximum child support income level under the Supreme Court's guidelines, prohibits a court from requiring that the party provide income documentation for the purpose of calculating child support income unless the court determines that an upward deviation may be appropriate. (Sec. 3)

6. Makes technical and conforming changes. (Sec. 1, 2, 3)

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10.                   SB 1151

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