Community Property in Washington State

Financial considerations are a common reason people put off proceeding with divorce in Washington State. Many couples are concerned about splitting marital debt, and some are unsure how they would survive without a partner’s income. Parties are keen to hold onto assets that they feel are theirs alone—such as cash, trust assets, or property given to them by a loved one. The key is to understand how community property laws apply to you and your case.

Washington is a community property state, meaning that any money earned or property acquired by either spouse during a marriage is the rightful property of both spouses, according to RCW 26.16.030. Community property is divided between parties in divorce. The same is true for any debts during the marriage– both partners are responsible to repay them. For example, a vehicle that is purchased during the marriage is considered to be property legally owned by both parties (a community asset).

Separate property— property that belongs to just one spouse, such as property acquired before marriage— are all part of a divorce agreement in Washington State. Separate property includes property that either spouse had prior to the marriage, as well as gifts or inheritance received by either spouse. Separate property typically remains the property of the spouse who acquired it, although separate property can be included in the asset and property division.

Following Washington State law, mediation divides community property as equitably as possible.

Division of Property and Assets in Divorce

When considering division of assets in a divorce, the following are considered:

• Length of the marriage
• Economic situation of either spouse
• Types of property
• Amount of property and value of property

Also considered are each party’s contributions and sacrifices made during the marriage. For example, if you chose to help your spouse with his or her career instead of focusing on your own, you may receive a greater amount of the community property assets in divorce.

Another way that property could be considered as jointly owned is when a property is improved or accrues value during the marriage. For example, if you owned a house prior to marriage but your spouse has invested community funds, time, and/or effort(s) into improving the property, the house may become marital property.

How Gifts Are Treated in Divorce

In Washington State, a couple’s marital assets are divided under the doctrine of community property, meaning assets are dealt with equitably instead of equally. However, some assets—including gifts—qualify as separate property, meaning they might remain the sole property of the recipient spouse.

Gifts may qualify as separate property if:

• They were received prior to the date of marriage. In general, gifts given to one spouse from that spouse’s relatives or friends before marriage that were not commingled with marital property will not be subject to distribution in divorce.
• They were received during the marriage, but made to only one spouse. If you received a gift from your parents, friends, or family members at any time, and the funds were not commingled with marital property, the gift may qualify as separate property (especially if was made clear that the gift was intended for you).
• An inheritance was given to one spouse only. If a family member passed away during the marriage and bequeathed money and/or property to one spouse (that was not commingled with marital property), that spouse retains ownership over the property in divorce.
• They were given from one spouse to the other. Gifts exchanged during the marriage—such as jewelry, electronics, sports equipment, or a vehicle are considered your property and may not be recoverable in divorce.

A gift from a parent or grandparent can have both sentimental value and provide financial security for the recipient. In mediation, the majority of recipients keep the full amount of personal gifts as a part of their asset division.

When Could Gifts Become Community Property?

In some situations, gifts may be considered communal marital property. The first is when gifted assets have become commingled with marital assets. For example, if a cash gift is deposited into a joint bank account, the gifted assets could be considered owned by both spouses.

If separate property has been commingled into community assets, there are ways to ensure that it stays in your possession in divorce. Documentation such as bank statements, deeds, and correspondence are vital to establishing a gift as your separate property. The more evidence showing when the gift was given, how it was given, the terms of the gift, and how the monies were used, the more likely the gift is to be considered separate property in divorce.

Mediation is a negotiation. If you have assets that are important to you, it’s likely that your spouse also wants to keep certain property. Our team approaches these negotiations with experience and skill, allowing you to keep gift(s), while maintaining an equitable distribution of property that benefits both parties. Mediation provides a fair and equitable way to divide assets / property, preserve civility, and protect both parties’ legal rights.

Your Trusted Partner

Whether you’re contemplating a divorce, have already started the process, or are far into the proceedings, do you wish you had someone to share with you the inside scoop on how to save money, time, and emotional energy on your divorce?

Our team is available for Support On-Demand to discuss the many scenarios, options, and implications of separation or divorce, via telephone or videoconference during this time. Feel free to get in touch with us; we are here for you!