When divorcing in the state of Washington, community property division is subject to the state’s “equitable and just distribution” concept. This idea, contained in section 26.09.080 of the Revised Code of Washington, allows a court to divide marital property in a manner that it considers fair, and this may not mean that each person is entitled to half of the marital property.
Washington Community Property Laws
Washington is a community property state. This means that all assets and debts accrued during the marriage are considered owned equally by both spouses. Any property and debts acquired prior to the date of marriage or obtained after the date of separation are not marital assets. An inheritance received during the marriage that is kept separate from marital assets is also not included in the community property calculation. Under state law, marital property is to be divided equally between the parties, regardless of misconduct. Usually, each ex-spouse receives one-half of the marital assets and is responsible for one-half of the marital debts.
However, Washington’s laws also have some flexibility when dividing marital property. The court is required to consider the nature and extent of the community property, the length of the marriage and each spouse’s respective financial position when making a ruling on dividing it. If the court finds that an equal division of property would leave one spouse in an inferior position, it has the authority to award an unequal distribution.
Washington spouses can agree to a property division and submit it the court for approval. Once established, property division orders cannot be modified or cancelled unless the court finds legal grounds to open the original divorce case, such as fraud.
Assets Considered Community Property
All tangible and intangible real and personal property is community property. Tangible real property includes the marital home and other residential property, regardless of whether the premises have been rented to a third party. Tangible personal property includes furnishings, jewelry and automobiles. Intangible property includes savings, retirement and investment accounts. Inheritances and gifts are not community property unless the recipient spouse incorporates them with and treats them as marital assets.
Washington, however, also has a category for “quasi-community property.” This is property which has been obtained by a non-Washington resident and is located outside of the state, but which according to the foreign state’s laws, is to be governed by Washington law. This type of property is most common after one spouse receives an inheritance from a relative living out of state. This property may be divided according to community property laws, if the court feels that doing so is fair.
Division of Community Property in Washington
A value must be given to all property divided in a divorce. This is done according to an actuary’s findings or by the spouses' agreement. The following rules regarding the division of specific assets are general and may change depending on the facts of the case.
Because a home cannot be divided, the court must award one spouse an interest in the home’s value. Often, the court gives the non-residential spouse, meaning the spouse who does not live in the home, a deed or lien on the home for his share. When the other spouse sells the property, the deed-holding spouse receives a share of the proceeds. Of course, the spouses can always agree to sell the property and divide the proceeds immediately.
Retirement accounts, such as IRA and 401(k), are divided one of two ways: according to their cash value at the time of the filing for divorce or when disbursed. In the former situation, the spouses each receive one-half of the actuarial value of the account. In the latter, the spouses each receive one-half of any payments made from the retirement account.
An actuary calculates the cost of sick leave, vacation time and paid and unpaid leave of absences from work as of the date of separation. Since the employer is not a party to the divorce proceeding, the court cannot order the company or individual to pay the other spouse for the value of these benefits. Therefore, the spouse entitled to payment for unused work benefits usually receives other community property as compensation for her interest.
Actual cash, regardless of where it's located, is divided equally between the parties. Often, one spouse writes a check to the other for his share.
Stocks purchased during the marriage with marital funds are divided equally between the parties. However, the largest problem with dividing stocks is their future projected value. To handle this issue, the court usually orders the stocks be sold and the proceeds divided equally. If, however, a stock is expected to have significant future gains, the court may allow its continued ownership, but require the equitable division of its future value when dividends are paid or it is eventually sold.
The amount paid for insurance or the cash value accrued by a policy during the marriage will be split evenly between the parties. One spouse will likely remove her name as the beneficiary and receive cash or other community property for the relevant portion of its value.
Automobiles are valued by an actuary and the cash value is divided equally. Since a car cannot be split in half, one spouse may receive cash or other property for the amount of his share.
Dividing Your Community Property
If you want to know how your community property will be divided in a divorce, seek legal advice or consult the Washington state statutes. Remember that the court will award property according to what it believes to be a just distribution, and it's possible for one spouse to receive a much larger share than the other if the divorce goes to a hearing.