Understanding the Equitable Allocation of Assets & Debts in Divorce; AKA Who gets the house and the 401k?

Usually, one of the major concerns when beginning the divorce process is the division of marital assets and debts. Unless you situated a very thorough pre-nuptial agreement, there will usually be disagreements. If you and your spouse cannot ultimately agree on a settlement, Washington Law requires that courts divide the marital estate in a way that is “just and equitable.” Do not be mistaken though, in this case, equitable does not mean equal, it typically means “what is fair under the circumstances.”

What is Community Property?

Washington is a community property state, which means that all property and debt accumulated while you are married are presumed to belong to both you and your spouse. In terms of property, this may include:

  • The marital home and other real estate holdings
  • Personal belongings
  • Motor vehicles
  • Cash
  • Retirement benefits and pensions
  • Investments and stock options
  • Business holdings

Property you acquired while single, as well as gifts, inheritance and some personal injury awards made specifically to you, are generally regarded as your own separate property and are not subject to division, although there are circumstances under which separate property can become a marital asset. One example is a bank account that you had prior to the wedding and later used to hold marital funds.

How Is Everything Allocated?

After characterizing which assets and debts are community or separate, the court will look at the value of each asset. There are different ways to determine value, but the primary ones are expert appraisal, general agreement on a value, or selling the item and utilizing the sale price. Once a reasonably accurate calculation is made, the property is then divided.

When deciding how to accomplish a fair and equitable division, the court may consider circumstances like the following:

  • How many years you were married
  • The type and extent of community property
  • The type and extent of separate property
  • Whether or not there was a purposeful co-mingling of separate and community assets
  • The economic circumstances of each spouse once the property is divided

Washington courts are especially concerned with the latter outcome. If one spouse was a stay-at-home parent who sacrificed their own career to support their husband or wife and take care of the family, they may be awarded a greater percentage of the marital estate to compensate for reduced earning ability.

Courts do not typically consider marital fault when dividing property, unless misconduct diminished the marital estate or increased the community debt load. For example, if a husband spends huge amounts of marital funds on a new romantic partner or spitefully maxes out a shared line of credit in an attempt to saddle his wife with more debt, the wife may be awarded more property to reduce the financial impact of such actions.

The allocation of assets and debts can have a lasting effect that remains in place long after the divorce decree is issued. This is why advice and support from an experienced Washington divorce attorney can make a major difference in your independent future. To schedule a consultation and review of your circumstances, contact Bliss Law Group online at www.blisslaw-group.com or via telephone at (253) 844-4412.

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Written by Bliss Law Group