When a couple divorces, one of the top concerns is the division of their large assets, like houses and bank accounts. In Washington, the petition for dissolution of marriage requires that couples present, for the court’s consideration, all real property, such as land or homes. Also, personal property that are possessions, assets, or business interests and debts, like mortgages, loans, credit cards, or other money owed.
Washington is a community property state; this means the courts generally regard everything a spouse owned individually before the marriage as separate property and the assets and debts acquired during the marriage as community property
Generally, each party is awarded their own separate property and a portion of the community property. To distribute the couple’s property in debt, each item will need to be categorized as community or separate. Both community and separate property can be divided and distributed to one spouse or the other. However, separate property can become community property if it’s co-mingled. For example, if one of the spouses owned a house before the marriage but the other spouse starts making payments on the mortgage, the house may eventually be considered community property.
Co-mingling is a complicated concept that’s best understood by speaking with an attorney. Many people are surprised to discover that pensions and retirement plans are also community property and are divided in a divorce. Depending on the type of benefit plan, there are different rules governing division. This is another complicated area where speaking with an attorney is the best way to get clarity on your particular situation.
Some couples reach an agreement on how to divide their assets and debts at the time of divorce if the parties were not able to reach an agreement prior. All the couple’s property and debts will be laid out before the court to be equitably divided. When dividing property, debts, and assets, the court considers several factors, including the length of the marriage and the financial differences between the spouses. When a marriage has lasted a long time or one spouse is severely disadvantaged financially, the court may even award a portion of separate property to the challenged spouse to make the property division more equitable. It’s important to recognize that equitable does not mean equal.
The court will often award a greater share of the property and fewer debts to the lower wage-earning spouse. Asset protection includes a proper calculation and negotiation of child support. Special needs, children’s expenses, spousal support, and personal debt division, though technically these are not part of the high-value asset division, are financial issues that will become intertwined. The overall goal is to agree to reasonable support combined with fair asset and debt division.