- Property acquires character at the time of acquisition, which refers to the time at which the right to obtain title occurs, not the time when legal title is conveyed.
- The court must account for over- and underpayments of temporary child support in the final decree.
This opinion involves three discrete issues: (1) the character of an investment property purchased shortly before marriage; (2) reimbursement for a post-service tax garnishment; and (3) credit for an overpayment of temporary child support.
(1) Investment Property: Prior to marriage, Father entered into a contract to purchase a residential investment property (“Falcon Ridge”) and paid earnest money of $50,000. The property was purchased in the name of Father’s LLC, which was created prior to marriage. Although Father signed the purchase contract prior to marriage, he did not acquire legal title until shortly after the marriage. Because Father acquired legal title during the marriage and comingled separate and community funds in the LLC bank account, the trial court found that Falcon Ridge was transmuted to community property.
(2) Tax Garnishment: At trial, Father requested reimbursement for a tax garnishment that he paid after the date of service with his separate funds. The court denied the request for reimbursement, finding that Father’s conduct of filing a separate return without Mother’s approval resulted in additional tax liability, and that he should be responsible for the garnishment.
(3) Child Support: The trial court entered final child support orders that modified temporary child support, thereby creating over- and underpayments for different periods. The court entered a past support judgment against Father for the underpayment but determined that it could not offset the overpayment pursuant to A.R.S. § 25-527 until Father’s support obligation terminates.
(1) Investment Property: Although Father only acquired legal title after the marriage, he acquired equitable title prior to marriage when he signed the purchase contract and paid the earnest money. Property acquires its character at the time of acquisition. “Time of acquisition” refers to the time at which the right to obtain title occurs, not the time when legal title is conveyed. “[T]he status of title, as community or separate, is determined by the status of the initial interest that matures into the full title.” Therefore, Falcon Ridge is Father’s separate property subject to a community lien.
(2) Tax Garnishment: All debts incurred during the marriage are presumed to be community. The court may determine that an unequal division is appropriate, or find that there are excessive or abnormal expenditures, destruction, concealment or fraudulent disposition of community property. Absent those findings, the court must equitably divide all community debt. Here, the trial court did not make the requisite findings and improperly considered marital misconduct in assigning the garnishment entirely to Father.
(3) Child Support: A.R.S. § 25-527 prohibits the court from offsetting an overpayment above a final child support order because it could result in an obligor building up a credit and then not paying support for weeks or months. It does not bar the court from offsetting an overpayment of temporary child support in the final decree, even if the children have not reached the age of majority. The decree must account for over- and underpayments from temporary orders, including offsets.
Brucklier v. Brucklier, 516 P.3d 526 (Ariz. App. 2022).