Because Arizona is a community property State, there is a statutory presumption that all property acquired by husband and wife during the marriage, except property acquired by gift, devise or descent, is community property. Community property is an estate of co-ownership between married persons only. Neither spouse, acting individually, may transfer or encumber real estate that is vested as community property. Upon death of one of the spouses, the decedent’s interest will pass by will (if one exists) or intestate succession (if no will exists).
COMMUNITY PROPERTY WITH RIGHT OF SURVIVORSHIP
A Community property estate between married persons that vests the title to real property in the surviving spouse provided it is expressly declared in the deed. This vesting has the tax benefits of holding title as “community property” and the ability to avoid probate through “survivorship rights”.
JOINT TENANCY WITH RIGHT OF SURVIVORSHIP
Joint Tenancy with right of survivorship is a method of co-ownership that gives title to the real property to the surviving tenant(s) upon death of a joint tenant owner. Title to real property can be held in joint tenancy by two or more individuals either married or unmarried. If a married couple acquires title as joint tenants with the right of survivorship, they must specifically accept the joint tenancy to avoid the presumption of community property.
TENANCY IN COMMON
Tenancy in common (or tenants in common) is co-ownership where parties do not have survivorship rights and each owns a specific undivided interest in the entire title. For example, one party could own “an undivided 25% interest” while another 2 parties own 60% and 15%. It’s important to note that this can be combined with other ways to hold title, e.g. JOHN SMITH and JANE SMITH, husband and wife as community property with right of survivorship as to an undivided 50% interest. They would be “tenants in common” with whoever else were on title, but their 50% interest would be “community property with right of survivorship“.
TRUST (WITH A TRUSTEE)
Arizona allows for property to be held in the name of an individual or corporation acting as trustee of a trust, pursuant to a written trust agreement. The name of the trustee, trust and date of the trust agreement must all be declared as grantee. (Also, Arizona law requires that the names and addresses of the trust beneficiaries are disclosed when transferring property into or out of a trust.)
SOLE AND SEPARATE PROPERTY
Sole and separate property is real property owned by a spouse before marriage or any acquired after marriage by gift, devise, descent or specific intent to hold the title separate from the marital community. If a married person acquires title as sole and separate property, his or her spouse must execute a disclaimer deed.
Title may be taken in the name of a corporation provided the corporation is duly formed and in good standing in the State of its incorporation.
Title may be taken in the name of a general partnership duly formed under the laws of the State of the formation of the partnership. A partnership is defined as a voluntary association of two or more persons as co-owners in a business for profit.
A partnership formed by two or more persons under the laws of Arizona or another State and having one or more general partners. A certificate of limited partnership must be filed in the Office of the Secretary of State, a certified copy of which must be recorded.