When you get divorced, a key aspect of the process involves dividing your marital property. Washington is a “community property” state, and this means that divorcing spouses must generally divide their marital assets “equitably”. This is true regardless of their respective financial and non-financial contributions during their marriage.
However, in most cases, not all assets will be on the table. This is because Washington law recognizes a distinction between “community” and “separate” property. Simply put, community property is subject to equitable division in a divorce, and separate property is not. This makes identifying your community and separate assets critically important.
General Rule: The Date of Marriage Is the Dividing Line for Identifying Separate and Community Assets
When is an asset considered “separate” and not subject to division in a divorce in Washington? Generally speaking, an asset qualifies as separate property if either spouse owned the asset prior to the date of marriage. So, for example, if you owned a car, house, piece of jewelry, television, or any other asset before you got married, then that asset would generally be yours to keep after your divorce.
Conversely, an asset will generally be characterized as community property if it was acquired after the date of marriage. As stated in Section 26.16.030 of the Revised Code of Washington (RCW), “[p]roperty . . . acquired after marriage or after registration of a state registered domestic partnership by either domestic partner or either husband or wife or both, is community property.”
Specific Exceptions to Washington’s Community Property Law
While these are the general rules, there are a few major exceptions. Mostly, these exceptions have to do with situations in which assets acquired during the marriage are treated as separate, rather than community, property. For example:
- Gifts to One Spouse – Anything you received as a gift to you alone qualifies as your separate property. However, joint gifts, such as bathroom or kitchen renovation, will still qualify as community property.
- Personal Inheritances – If you personally received an inheritance during your marriage, then this, too, is yours to keep. Joint inheritances, on the other hand, are considered community property even if they are received from one spouse’s biological family member.
- Personal Injury Compensation for Pain and Suffering – If you received a personal injury settlement or court award during your marriage, then the portion of your award attributable to your pain and suffering is your separate property. All other portions (including compensation for medical expenses, lost earnings, and lost future earning capacity) are part of your community estate.
Are there circumstances in which assets owned prior to the marriage can become community property? Yes, absolutely. While there are numerous examples (some of which we discuss below), one of the most common scenarios in which this can occur involves the commingling of separate and community funds. If it is no longer possible to distinguish separate funds from community funds in a joint account, then the entire account will be treated as community property in your divorce.
Complicating Factors for Identifying Separate and Community Assets during a Divorce in Washington
In addition to these specific exceptions, there are various other factors that can complicate the identification of separate and community assets during the divorce process in Washington. As a result, when preparing for a divorce, it is important to work with an experienced Tacoma family law attorney to ensure that you accurately characterize all of your assets. Not only must you ensure that you protect everything that qualifies as your separate property, but you must also ensure that your spouse does not incorrectly claim exclusive rights to anything that should be included in your community estate.
Some examples of issues that can blur the line between separate and community property in Washington include:
- Pre-Marriage and Post-Marriage Contributions to Retirement Accounts – If you started a retirement account prior to your marriage and then continued to make contributions during your marriage, a portion of your retirement savings may be yours to keep and another portion may be on the table in your divorce.
- Appreciation in Value of Assets Owned Prior to the Marriage – If you owned an asset prior to your marriage and it appreciated in value during your marriage, the increased value might also be classified as a separate asset, but it can also be classified as a community asset in some cases.
- Use of Separate Assets to Acquire Community Assets – Let’s say that you had $50,000 in the bank when you got married; and, after you got married, you used this money as a down payment on a $500,000 house. In Washington, the general rule is that your $50,000 down payment would retain its character as separate property.
- Use of Community Assets to Pay Separate Debts – Now, let’s say that you already owned a house when you got married, and then after you got married, you paid the mortgage with community funds. In this scenario, the use of joint assets to pay down the mortgage could give your spouse a community interest in the house. The same would be true if you owned the house outright but used community funds for upgrades or to build an addition.
- A Legally-Enforceable Prenuptial Agreement – If you and your spouse signed a legally-enforceable prenuptial agreement, then the terms of your agreement could override Washington’s default community property rules. The Washington courts allow fiancés to agree in advance that certain separate assets will be treated as community property, that certain community property assets will be treated as separate property, and that post-marriage contributions to or from separate assets will not give rise to community property rights.
Speak with a Trusted Law Attorney in Confidence
If you have questions about which of your assets qualify as separate and community property, we encourage you to schedule a confidential initial consultation with one of our family law attorneys. To speak with an attorney in confidence, please call us directly or request an appointment online today.