What is separate property in a divorce?
There are instances where separate property could become marital property. For instance, if one spouse has received a significant sum of money from a relative as an inheritance (or a gift). The spouse then transfers those funds into an account with both spouses’ names on it, thereby giving the other spouse access to that money. In a divorce, the other spouse might be able to successfully argue that the money is community property. Likewise, if a spouse marries and then adds the other spouse’s name to accounts that hold separate income, a judge could rule that the money has become community property in that it was used by both spouses.
To avoid any complications and conflicts, it is beneficial to speak with a Washington family law attorney prior to, or during, your marriage to determine the best way to protect the separate character of you property. At the end of a marriage, it becomes especially important to speak with a divorce attorney if you and your spouse have substantial or complex assets (such as a goodwill value of a business). Your Washington divorce attorney will likely suggest that you hire a business valuation expert or an accountant to determine the valuation and disposition of such property.
How does the court decide who gets what?
The State of Washington requires that the court’s division of your property be “just and equitable” (RCW 26.09.080). Equitable may not mean equal. Instead, it usually means fair under the circumstances. In other words this may mean a bigger property award for a spouse with less ability to earn in the future. The court even has the ability to award separate property of one spouse to the other spouse. This is not typical, and the court will usually try and make a “just and equitable” division without doing so. The court generally will not consider any marital “fault” when dividing your property.
When deciding how to create a just and equitable division, the court may consider the following:
- The nature and extent of the community property;
- The nature and extent of the separate property;
- The duration of the marriage; and
- The economic circumstances of each spouse at the time the division of property is to become effective.
The court is most concerned about the financial situation both parties will be left with when the marriage officially ends.
Will I keep my separate property?
Towards the end of the divorce settlements, clients are usually concerned with how assets are distributed between the two divorcees. One of the most common concerns clients have is if they will keep their separate property or not.
Since Washington is a community property state, there is no guarantee that one spouse will get to keep his or her separate property after the divorce. In some circumstances, Washington divorce courts can award separate property of one spouse to the other spouse, as part of their just and equitable division of property. Separate property may include vehicles, houses, real property, or bank or retirement accounts that are currently held as separate property of only one spouse. In most cases, however, the court will award each spouse his or her own separate property. The court will award one spouse’s separate property to the other only in unusual circumstances and only if doing so is found to be equitable under the circumstances.
If you brought separate property into the marriage, or if you acquired separate property during the marriage that meets one of the community property exceptions, it is likely worth your while to investigate how you can prove that property’s separate character. Your divorce attorney can help you determine whether you do have separate property, and how you can prove it to a court or other decision-maker should it become necessary.