If you have recently moved to Arizona, it is a good idea to have your will or trust reviewed by a local estate planning attorney, regardless of the state from which you relocated.
However, such a review takes on much greater importance if you moved here from a state other than the eight other “community property” states (California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin).
Here is why:
In Arizona, assets acquired by a married couple — cash, investments, personal property, real estate, business interests, retirement accounts, etc. — or by either spouse during the marriage, are considered community property, with each spouse owning an undivided half interest in each asset.
There are exceptions. Examples of “sole and separate” property include assets acquired before marriage, a business started before marriage, a retirement or pension account that originated before marriage, or a gift or inheritance received at any time.
Those exceptions are not absolute.
For example, if the value of one spouse’s separate asset increases during the marriage, that increase may be considered community property. Also, if separate-property cash becomes commingled by placing it in a joint bank account, it, too, will likely be treated as community property.
If those provisions seem confusing, the confusion can reach new heights when a married couple moves to Arizona from a noncommunity property state. That is why an estate plan review becomes important.
Under Arizona law, assets acquired by a married couple, or by either spouse, while they lived in a noncommunity property state, and that accompanied the couple to Arizona, are generally considered not as community property but as “quasi-community” property.
If, after moving to Arizona, one spouse dies or the couple divorces, how the courts treat the couple’s quasi-community property is very fact-specific and can result in unintended consequences for the couple. The spouses’ estate plans should expressly address the ownership of the assets that they brought to Arizona.
To help ensure that your wishes are honored regarding the ownership of your pre-move assets, and any assets you acquired after moving here, schedule a review of your will, trust and ownership documents by an experienced Arizona estate planning attorney.