Property Division in WA Divorces

Property Division in WA Divorces: The Basics

–by Sam Darling, Genesis Divorce Lawyer

This article explains the basics of how Washington courts typically divide property (assets) and liabilities (debts) in a divorce. For readers wanting more in-depth information, we encourage you visit the ‘resources’ section of our law firm’s website. There you will find numerous free articles and videos on topics this article only briefly touches upon. If you are unfamiliar with the rules of property division, we recommend reviewing this article and its accompanying video first. Then review our other articles and videos on other property-related subjects if you need to. And if you get bored reading about these laws, watch our video(s)!

 

How Does the Court Usually Divide Property?

A court in Washington State will usually a) award each party his or her own separate property and b) divide the net value of the parties’ community property 50/50. This means the husband keeps what he brought to the marriage, the wife keeps what she brought, and the rest gets split between them equally.

However, the property division can be drastically different from this norm. Washington’s divorce laws often grant judge’s a great deal of latitude, and property division is no exception. All separate and community property and liabilities are before the court for distribution to either party. You can read the actual language of the relevant statute at RCW 26.09.080, but that is not necessary. Put simply, a court can award one spouse the separate property of the other, and can award one party more than half the community property. This may be one reason parties notoriously engage in ‘character assassination’ during divorce proceedings. A party might get a more property by making the other side look underhanded.

How Does the Court Divide Community Property Items Equally?

Often would-be-divorcees mistakenly believe the court awards each party half of each item of community property. For instance, they think the court will force the parties to sell their house and other belongs so each can have half the proceeds.

Though courts occasionally force the sale of a home, that outcome is rare. In fact, judges usually accomplish a 50/50 division of community property without selling anything. Instead, courts tend to award whole items to each party, and then divide cash and stock accounts in whatever percentage is necessary to equalize.

For illustrative purposes it helps to look at a simple hypothetical example. Assume the parties’ community property consists of the following:

  • A house worth $100,000
  • A mortgage of $60,000
  • The husband’s car worth $5,000
  • A $5,000 loan on the husband’s car
  • The wife’s car worth $10,000
  • A $10,000 loan on the wife’s car
  • A 401k retirement account with a balance of $60,000

In total, the divorcing couple has $175,000 in assets (the house, cars, and 401k) minus $75,000 of debt (the mortgage and car loans), for a net community value of $100,000 ($175,000 – $75,000 = $100,000). Normally the judge would want each party to receive half this net value, namely $50,000 net each.

The court could distribute the property in any way that leaves each party with $50,000 net. So the court might award the husband the house (worth $100,000), the mortgage (a debt of $60,000), his car (worth $5,000), his car loan (a debt of $5,000), and $10,000 from the 401k—which would leave the husband with a net of $50,000 in community assets and liabilities. The wife would in turn receive $50,000 from the 401k, her car (worth $10,000), and her car loan (a debt of $10,000)–which would leave the wife with a net of $50,000 as well. The parties’ positions would be equal in the court’s eyes, with each having half the net value of the community property.

Notably, judges usually keep at least four rules in mind when deciding how to apportion a 50/50 division of community assets and debts:

  1. Apportion debts in ways the parties can afford. This means a judge will usually order the higher-earning spouse to pay the majority of the community debts. In our example, this means the higher-earning spouse–traditionally the husband–is required to pay the mortgage.
  2. Keep liens with the assets they encumber. Our example was in concert with this rule as well. The largest lien (the mortgage) and the asset it encumbered (the house) both went to the same person (the husband). Similarly the wife’s car and car loan both went to the wife. By keeping liens with their encumbered assets, it decreases the likelihood of default on the debts. The husband will pay on the mortgage for fear of losing the roof over his head, and the wife will pay on the car loan for fear of losing her transportation.
  3. If there are minor children, try to keep them in the former family home. In other words, award the former family home to the custodial parent (called the ‘primary care parent’ in Washington State) if she can afford the mortgage. There are no children in our example, so this rule does not apply.
  4. Award items to the spouse who wants them, primarily uses them, or in whose name they are in, in that order of priority. In our example, each spouse received the car he or she customarily drove.

What Is Separate Property vs Community Property?

Separate property is what a spouse either acquired prior to the marriage or after the parties’ separation. Community property is what the either party acquired during the marriage. The key factor is the date of acquisition.

Essentially the same definition applies to liabilities (debts). Liabilities are separate if acquired prior to marriage, community if acquired during marriage, and separate if acquired after the parties’ separation.

These definitions are generalities, however, and Washington law contains many exceptions to them.The following are some of the exceptions:

  • Inheritances are the separate property of whoever received them, unless left to both parties.
  • Gifts are the separate property of whoever received them, unless given to both parties.
  • Items acquired prior to marriage may be treated as community property if, at the time, the parties shared their finances and otherwise acted as a marital community.
  • Items take on the character of the property from which they derived. If community property earnings are used to purchase an item after separation, that item is community property as well, and visa versa. This is called the ‘tracing rule’.
  • If community property and separate property are commingled to the extent the court cannot trace them, they become community property. This is called ‘commingling’.

Bear in mind, even these exceptions contain exceptions. Characterization of separate and community property can be a highly nuanced debate in court. Our firm has published a more detailed article on how court’s define community property in Washington divorces.

Will a Court Sometimes Award More Than Half the Community Property?

Yes, courts will sometimes divide community property in ways other than 50/50. And as mentioned above, a court may also award one party’s separate property to the other party. When this happens, it is called a ‘disproportionate award’. Disproportionate awards are rare, especially with respect to short marriages. They are somewhat more common with long marriages, but still an exception.

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