Picture of Community Property

Community Property in Washington State Divorces

Samuel K. Darling, Divorce & Business Lawyer at Genesis Law Firm's headquarters in Everett, WA

by Samuel K. Darling, Divorce Lawyer at Genesis Law Firm

Heated disagreements in Washington State divorces often boil down to whether an asset should be characterized as community property or separate property. This is because courts usually award each spouse ALL his or her separate property, but only HALF the community property and NONE of the other spouse’s separate property. For those hoping to better understand property characterization, you have come to the right place. This article provides a detailed description of the relevant laws – perhaps the most detailed free description available. In fact, if you read and understand this article, you will probably know more about property characterization than do many lawyers. The first several sections below explain the basic principles, followed by increasingly complex principles and examples. Our law firm has also published separate articles on Property Division in Washington Divorces and Disproportionate Awards of Property, which you can find by clicking the links in this sentence.

Picture of a Wedding Date
The Main Question Is Whether You Acquired It Before Or After the Wedding

1) Basic Definitions. As the names imply, community property is what spouses own together as a marital community, and separate property is what each spouse owns individually.

The date of acquisition usually determines whether something is community or separate in character. Assets and debts acquired during the marriage are usually community property, and assets and debts acquired before or after the marriage are usually separate property. For example, a husband’s wages earned during the marriage are community property, and his wages earned after the marriage are separate in character.

Courts presume property is community in character unless proven otherwise.

2) End of Marriage. For purposes of property characterization, a marriage ends when the spouses INFORMALLY separate. Informal separation occurs when the spouses stop living together with the intent of remaining a couple, or when one of them petitions for divorce or legal separation, whichever happens first. For instance, informal separation might occur when:

  • A spouse moves out of the family home with the intent of ending the parties’ relationship;
  • The parties continue living together but divide their assets and liabilities and agree their relationship has ended;
  • The parties are living separately and one of them says the relationship is over; or
  • One of the parties petitions for dissolution (divorce) or legal separation.

Of course, many married couples break up and reconcile multiple times. Courts typically ignore all but the final breakup.

3) Gifts. A gift can be an exception to the general rules of property characterization. An asset given to one spouse rather than to both spouses is the separate property of the recipient, regardless when it occurs. But the recipient bears the burden of proving the gift was to only one spouse rather than to both. Proof of the intended recipient can be assumed based on the circumstances. For example, the court might assume a family heirloom from the husband’s parents was intended as a gift to the husband. Rightly or wrongly, judges often assume gifts from one spouse’s side of the family are to that spouse.

Picture of a Separate Property Gift

4) Inheritances. Washington treats inheritances the same as gifts. An inheritance to one spouse is that spouse’s separate property, regardless when it occurs. Unlike gifts, there tends to be little argument whether the inheritance was to one spouse or both spouses. Documentation, such as a will or court papers, usually makes the intended recipient clear.

5) Quasi Community Property. Washington courts sometimes use the term “quasi community property” as a reference to non-community property that should be treated as community property. Quasi community property comes in two types:

  • Assets or debts from outside Washington that would be community property if located within Washington’s borders; and
  • Assets or debts acquired when the parties were living like a married couple but were not technically married.

The latter category warrants further explanation. Couples often live together outside wedlock – perhaps prior to marriage. For purposes of property characterization, courts say property acquired during this time is quasi community property if the parties were living like a married couple. In determining whether the parties were living like a married couple, the judge may want to know whether they were romantically involved, commingled their incomes, and sharing expenses. If so, the unmarried couple is said to have been in a “meretricious relationship”, “committed intimate relationship” (CIR), or “marital-like relationship”. All three terms mean the same.

Picture of people in committed intimate relationship acquiring quasi community property
People in Marital-Like Relationships Acquire Quasi Community Property

6) Tracing. Proceeds from the sale of an asset retain its original characterization. For example, assume a wife bought a car prior to marriage. The car would be her separate property. Then assume she sold the car DURING marriage. The proceeds would still be her separate property, even though she acquired them during the marriage. Then assume she bought a couch with the car sale’s proceeds. The couch would be her separate property as well. This is called “tracing”.

When a party claims an asset acquired during marriage traces back to separate property, he or she bears the burden of proving its traceability. Otherwise the presumption of community property governs.

7) Commingling. “Commingling” is the opposite of tracing. Commingling occurs when spouses mix their community property and separate property in ways that render the separate property impossible to trace. When this happens, the entire mixture becomes community property.

Picture of Commingling Money
Commingled Funds Become Entirely Community Property

The classic example occurs when newlyweds pool their money in one bank account. Assume the parties each put $5,000 of their premarital earnings into an account, for a total balance of $10,000. At first the $10,000 of pooled funds are separate property, earned prior to marriage. But then the spouses deposit their earnings from during the marriage (community property) into the same account. Now the account contains separate and community funds. Notably, the separate funds would still be traceable at this juncture, because the court could ascertain that $10,000 of the current account balance came from separate property. But what if the parties begin spending from the account on everyday expenses? That is when traceability usually becomes impossible. Generally the court has no way of knowing whether the expenditures were from the separate funds or community funds. Consequently the court would be unable to determine how much in the account is separate in character. Though unfair in some eyes, the entire account would become community property.

Thankfully courts tend to soften this rule by erring on the side of traceability, especially when dealing with large separate property values. For instance, if a wife deposits $300,000 in separate funds into the parties’ joint account for a month and they spend money from the account in the interim, the court would still probably consider the $300,000 traceable.

8) Improvements. When a spouse (or both spouses) improves the value of an asset, the increased value reflects the character of whatever brought about the improvement. This rule is difficult to understand as a general principle, but makes intuitive sense in context. Consider the following example:

  • A husband builds a second wing on the family home during the marriage. The materials cost $10,000, which the wife pays from her premarital earnings (separate property). The second wing improves the homes’ value by $100,000. Ten-thousand dollars of the improved value would be the wifes’ separate property, because it traces back to her premarital earnings. The other $90,000 of the improved value would be community property, because it derived from the husband’s work during the marriage.
Picture of Home Improvements
Home Improvements Done During the Marriage Create Community Property

9) De Minimis Exception. The court tends to disregard small improvements when characterizing property. This is called the “de minimis” exception. De minimis is a Latin term meaning “the impact is small enough to ignore”.

10) Repairs & Routine Maintenance. The court also tends to disregard repairs and routine maintenance when characterizing property. For example, the court would probably overlook whether the spouses fixed a toilet in the family home. One might think of this in the same way as the de minimis exception. The lower the value and cost of the work, the more likely the court is to disregard it.

11) Split Characterization. Property can be partly community and partly separate in character. Consider the following example, which fits a common fact pattern:

  • Newlyweds purchase a $300,000 home. The $30,000 down payment comes from the wife’s premarital earnings (her separate property). The parties take out a mortgage for the remainder of the purchase price. Because of the wife’s down payment, ten-percent of the home is her separate property ($30,000 / $300,000 = .10). The other 90% of the home is community in character, as is the mortgage obligation.
Picture of House with Split Characterization
A House Is Partly Separate Property and Party Community If Purchased During the Marriage with a Down Payment Earned Before the Marriage

12) Appreciation. When an asset appreciates, the increased value retains the asset’s proportionate character. Consider the following extension of the previous example:

  • As you know, the wife has a 10% separate property interest in the family home. The other 90% is community property, as is the mortgage. The house appreciates overnight by $100,000 (perhaps because the parties found gold on their land). After the appreciation, the house is still 10% separate property and 90% community property.

13) In Whose Name. For characterization purposes, it makes little difference whether an asset or debt is in one spouse’s name, the other spouse’s name, or both names. For example, the court will usually disregard whose name is on a car’s title. Similarly, courts pay little attention to the name(s) on a deed, bank account, or mortgage. This is because spouses often put assets and debts in whoever’s name makes practical sense at the time rather than as an indication of who should receive the property in a divorce. They might quitclaim the house to the wife to get a better interest rate on a mortgage refinance. Or the husband might put the family cars in his name for simplicity. The court usually looks past the names and applies the other rules stated in this article.

14) Refinancing. Refinancing a mortgage or loan typically does not impact characterization. The loan generally takes on the same character as its predecessor loan, and the encumbered asset’s character remains the same as well.

15) Mortgage Payments on Family Home. For purposes of characterization, judges usually disregard who pays the mortgage on the family home. Like several other rules listed above, this principle makes more sense in context.

Consider the following scenario: the spouses live in a home the husband acquired prior to marriage (his separate property). He then makes the monthly mortgage payments with his earnings from the marriage (community property funds). Here, the community would not acquire a community property interest in the home, even though community earnings paid down the mortgage balance. The reason is that the marital community lives in the home, which has a rental value. The rental value of a home roughly offsets the mortgage payment.

16) Mortgage Payments on Second Homes. To the extent the payor used the second home for vacations, the rental value should offset the mortgage payments. The court would disregard who made the mortgage payments. Similarly, spouses often rent out the second home to others. If the home’s rental income pays its mortgage, then the court again ignores the payment in its characterization.

But what if the parties neither use the home themselves nor rent it out? The outcome becomes unpredictable and largely dependent on each party’s ability to argue the equities of his or her case. Courts sometimes hold that the mortgage payments are a gift from the payor. Other times the court characterizes a portion of the home’s equity as belonging to the payor.

17) Rental Income & Dividends. Passive income from assets, such as rental income and dividends, usually take the character of the assets from which they derived. For example, a rental home’s rental income typically takes the character of the home.

18) Characterization of Small Business. Characterization of a small business’s income and value follow the same general standards listed above, but it presents a unique challenge. Courts characterize small business income and appreciation using the following specialized rules:

  1. Characterization of Passive Small Business Income. If the business generates income passively (meaning it produces income without either spouse having to do much), the income takes the character of the business. For example, a wife owns a coffee stand prior to marriage (her separate property). She does not work there; employees run it for her. The income from the business would be the wife’s separate property, even if acquired during the marriage.
  2. Characterization of Active Small Business Income. If the business generates income from the spouse’s activity, that portion of the income is treated as the spouse’s earnings (i.e., community property if earned during the marriage). Take the example above, but this time assume the wife actively manages the coffee stand during the marriage. Her business’s income during the marriage would probably be community property.
  3. Characterization of Passive Small Business Appreciation. If the business appreciates in value without either spouse’s work, the appreciation takes on the character of the business. In this example, assume the wife owned the coffee stand prior to the marriage (her separate property), her employees run it for her (passive business activity), and the business increases in value by $100,000 during the marriage. The appreciated value would be the wife’s separate property.
  4. Characterization of Appreciation from Spouse?s Activity. This is where the biggest twist comes into play. Appreciation from a small business that a spouse actively ran is treated as the spouse’s earnings (i.e., community property if earned during the marriage as in example 2) ONLY TO THE EXTENT the business underpaid the spouse. If, on the other hand, the business compensated the spouse a fair wage, the appreciation takes the same character as the business. For this final example, assume the wife actively managed her premarital coffee stand, but she paid herself a manager’s salary during the marriage. The business’s appreciation during the marriage would remain the wife’s separate property.

That’s it! We hope this was helpful. Our firm believes in making quality legal information available for free online. For more, click our website’s ‘resources’ tab in the upper right corner. Or call us toll-free to speak with one of our knowledgeable divorce and family law attorneys. From everyone here at Genesis, we wish you the best with your family law matter!

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11 thoughts on “Community Property in Washington State Divorces”

  1. Hi,
    I just read your article Community Property in Washington State Divorces and I was wondering where I can find the sources for sections 2 End of Marriage and 13 In Whose Name.
    I have a friend that has been informally separated from her spouse since December 2020, but they purchased a home with a VA loan in March 2021. Both their names are on the home, but he has never resided or visited the home, and there is no attempt to reconcile. I was storing some firearms under my friends bed at the home, and her soon to be ex recently entered the home while she was not there (with a locksmith), and took my guns (and other items belonging to my friend). I tried to file a stolen property report, but the police told me that since his name is on the home (despite never residing there), they do not consider the firearms as stolen property. Since the home was purchased during the informal separation, is it community property or separate property?

    1. OH Ben!

      Wait are you sure you’re in Washington State? They are pretty heavily into shall be infringed upon up in here state…


      If the same thing happens and it’s a car, , is it less stolen because he stole it from ” his house”
      No wonder she left him….
      Obviously they are all from the liberal, democratic, give um all free stuff , let um burn our city & s*it in the streets side of pond ”

      Grab up your police report number, your concealed carry license, call up a couple of radio stations, a couple of TV stations share your story on Facebook and watch the constitutional lawyer’s fight over who gets to represent you while the rest of us law abiding not gonna be infringed upon patriots cheer you on.

      Ben are you absolutely certain they were police officers??? GO TAKE YOUR GUNS BACK!!

  2. Jeff Blasko. 253-880-8240

    Hi. I’m Jeffrey Blasko. I have some questions. Going through divorce. Trying to be fair and split things up evenly. But 1. I had an inheritance. 2. Married 30y. 3. I’m working construction she is an RN. I make an average $100, 000. A year, she makes $ 70,000. 4. Currently the house I’m living in ( family house 25y) is payed off from inheritance, is $600,000. She took all the rest of my inheritance money and bought herself a new house in November for $600,000.
    She wants to split everything evenly, family house, my inheritance, and also wants $80,000 in spousal support.

  3. I have been separated 6 months, husband has been our of the house for those 6 months but refuses to get his property belonging to him. Tool box that goes on a truck and clothes, I filed for divorce but also refuse to be served or sign any papers. Am I able to remove his things off my property? Do they belong to me after a certain time he does not remove them?

    1. A friends husband is trying to keep HER dog!! She has adoption papers from the pound and it has her name , not his even tho they were married at the tim of adoption ca she legally get her dog and how should she do that because he will not give up the dog.

  4. The husband owns the house before marriage. If monies are commingled for the entire 8 year marriage, is the wife entitled to half of the equity in the home since the date of marriage? The wife worked full time and opened a successful Airbnb on the homesite which contributed a substantial income every month.

  5. my husband and I were married in 2016, but we bought our home I’m 2014. When we bought our home my husband put his parents on the deed with himself and not me. At the time I was a newly SAHM pregnant with our second child. Fast forward to 2021 I found out that his parents were not just on thr loan but on the deed. In spring of 2022 we used all of our money to pay our house off. The payments always came out of his account and his name. His parents never paid a dollar and they were just trying to help us get the house at the time of our purchase. Well after we paid the house of my husband asked his parents to take their name off of the deed so it could be my husband and I. They refused. Well I really never cared about any of this but now I am in a situation where I would like out of this marriage. I believe my husband has done everything legally with his parents to protect assets that we have required with our money over the years. Is there nothing I can do even if his parents have never paid anything and the mortgage has always came from us to the mortgage company. I feel like I’m in a bad spot financially now since I am a stay at home mother of three children now

    1. I just went thru the same thing. Unfortunately with my case the judge was unable to say who owned the house and ruled that I only owned 25% of it. So he got his 25% plus his parents gave him their 50% so he got 75% of the home that I paid for. BS. The divorce judge doesnt have anything to do with deciding who owns the home and will only allow you the 25%. I can all but guarantee it
      Its crap. And mine was the same situation. They were doing it to help us. Not for equity. But he lied to the judge and said it was for equity even tho they never paid a penny towards the house
      I wish you luck

  6. Can on party request no alimony and just child support? How do federal student loans work especially if the loans are in one parties name, were started before the marriage, but continued during the marriage?

  7. I am engaged to someone who I recently found out has never filed taxes. He hasn’t worked alot of his life, but when he has, he’s never filed. If I were to marry him, would my taxes become affected? I would never get anything in returns! Is this a reason NOT to get married? I’m sure the IRS will eventually catch up to him and I don’t want to be any part of that mess. How have they not yet? Hes 61 now!!. I need to know if I need to reconsider this engagement. Please advise….

  8. Been married 1 1/2 but lived as basically a
    Married couple for 7 years I bought groceries took his some to school to practices bought his kid clothes my now husband clothes sometimes paid the water bill the HAO’s for awhile., put gas in the car for trips to his kids games. Our money wasn’t in the same account however I was a signer on one of his cards and I was a beneficiary with his work stuff I don’t know much about like life, insurance, 401(k), etc. I don’t know how that all works. Does this count in wa state? I was running as a full capacity as a wife. I would communicate with his sons mom to get practice schedules and game schedules etc. please help. We are separated now hoping he’ll get help with his alcoholism but if not I will have to go forward in a divorce and I’ve invested a lot of time and effort into this relationship

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