dissolution of marriage and community property. dissolution of marriage in washington, divorce is...

Dissolution of MarriageDissolution of Marriageand and

Community PropertyCommunity Property

Dissolution of MarriageDissolution of Marriage

In Washington, divorce is called In Washington, divorce is called “Dissolution of Marriage” and it is “Dissolution of Marriage” and it is governed by RCW 26.09governed by RCW 26.09

Washington is a “no-fault” divorce Washington is a “no-fault” divorce state. That means you do not have to state. That means you do not have to allege or prove any reason for the allege or prove any reason for the dissolution beyond “irreconcilable dissolution beyond “irreconcilable differences.” differences.”

Filing For DissolutionFiling For Dissolution Dissolution is relatively easy under Dissolution is relatively easy under

Washington law. Washington law. A person wishing to have her marriage A person wishing to have her marriage

dissolved must:dissolved must: File a petition with the courtFile a petition with the court

Joint petition, or Joint petition, or Petition gets served on other spousePetition gets served on other spouse

Wait 90 days Wait 90 days Receive final Dissolution Decree Receive final Dissolution Decree

Both parties agree to the decree and it is accepted by Both parties agree to the decree and it is accepted by the judge at a hearing, or the judge at a hearing, or

Dissolution is adjudicated before a judge and the Dissolution is adjudicated before a judge and the judge enters a decree, orjudge enters a decree, or

Default decree is enteredDefault decree is entered

Dissolution DecreeDissolution Decree

Ends the marriage Ends the marriage Addresses the following issuesAddresses the following issues

Community property and debt allocationCommunity property and debt allocation Parenting plan Parenting plan Custody rights Custody rights Child support Child support Spousal maintenance Spousal maintenance Restraining orders Restraining orders

What is Property?What is Property?

In the context of marriage, property In the context of marriage, property includes:includes: Real Property: Houses and LandReal Property: Houses and Land Personal Property: Furnishings, cars, Personal Property: Furnishings, cars,

clothesclothes Financial Assets: Cash, Investments Financial Assets: Cash, Investments Future Interests: Pension funds, life Future Interests: Pension funds, life

insuranceinsurance Contractual Rights Contractual Rights

Community PropertyCommunity Property

Washington is a community property Washington is a community property statestate

Each spouse is regarded as Each spouse is regarded as contributing to the well being of the contributing to the well being of the community and equally shares in the community and equally shares in the financial well being of the community financial well being of the community

Each spouse has a one-half interest Each spouse has a one-half interest in any property acquired by the in any property acquired by the marital communitymarital community

Marital Community

When Does Community When Does Community Property Matter?Property Matter?

Community property becomes an Community property becomes an issue when:issue when: The marriage is dissolved The marriage is dissolved One spouse dies One spouse dies One spouse wishes to dispose of some One spouse wishes to dispose of some

of the community property of the community property

Money Flowing Into the CommunityMoney Flowing Into the Community

Almost any money that a spouse Almost any money that a spouse earns during marriage is considered earns during marriage is considered community property community property

This includes:This includes: Salaries, wages, and other compensation Salaries, wages, and other compensation ““Windfalls” Windfalls” Sale of community property Sale of community property Interest and rents from community Interest and rents from community

propertyproperty

Money Flowing out of the CommunityMoney Flowing out of the Community

In general, property obtained by the In general, property obtained by the couple with community funds couple with community funds becomes community property becomes community property

Marital Community

Wife’s Salary

Husband’sLabor

Husband’sSalary

Wife’sLabor

COMMUNITY PROPERTY

Money Flowing into the Community Money Flowing into the Community from Community Propertyfrom Community Property

In general, any funds flowing from In general, any funds flowing from community property into the community property into the community become community community become community fundsfunds RentRent SaleSale Investment Proceeds Investment Proceeds InterestInterest Appreciation Appreciation

Marital Community

RENT DIVIDENDS SALE

INTEREST

Separate PropertySeparate Property

There is a strong presumption that There is a strong presumption that any property or funds obtained any property or funds obtained during a marriage are community during a marriage are community property property

However, some property is However, some property is considered the considered the separate propertyseparate property of of one spouse or the other one spouse or the other


Separate Property IncludesSeparate Property Includes Property held by a spouse Property held by a spouse priorprior to to

marriage marriage Property received as a gift or inheritance Property received as a gift or inheritance

by one spouse by one spouse Rents, interests, or profits from any Rents, interests, or profits from any

separate property separate property


New property purchased with the New property purchased with the proceeds of separate property is proceeds of separate property is considered separate property considered separate property

This concept is called This concept is called tracing tracing If the $$$ used to obtain property came If the $$$ used to obtain property came

from the community, the new property is from the community, the new property is community propertycommunity property

If the $$$ used to obtain property came If the $$$ used to obtain property came from one spouse’s separate property, the from one spouse’s separate property, the new property is that spouses separate new property is that spouses separate propertyproperty

=WIFE’S

SEPARATEPROPERTY

Wife receives inheritance from father

Wife uses inheritance to buy new car

The car is the wife’s separate property

Case Study 1Case Study 1CommunityCommunity

PropertyPropertyWife’s Wife’s

Separate Separate PropertyProperty

Husband’s Husband’s Separate Separate Property Property

Pension Pension

House House

FurnishingsFurnishings

Savings Savings AccountAccount

InvestmentsInvestments

House House

WagonWagon

BugBug

RingRing

CommunityCommunity




Pension Pension √√House House √√FurnishingsFurnishings √√Savings Savings AccountAccount

√√

InvestmentsInvestments √√House House √√WagonWagon √√BugBug √√RingRing √√

Case Study 1Case Study 1

Gifts & Intimate Personal PropertyGifts & Intimate Personal Property

One spouse may give a gift to the One spouse may give a gift to the other and that gift will be separate other and that gift will be separate property. The intent to give the property. The intent to give the property as a gift must be obvious. property as a gift must be obvious.

Some property is considered so Some property is considered so intimate as to always be considered intimate as to always be considered separate property:separate property: Clothes Clothes Jewelry Jewelry

Mixed PropertyMixed Property

It is not uncommon for a couple to use a It is not uncommon for a couple to use a mixture of community and separate funds to mixture of community and separate funds to make large purchases such as housesmake large purchases such as houses

It is also not uncommon for one spouse to It is also not uncommon for one spouse to own a house prior to marriage and to make own a house prior to marriage and to make payments on the house from community payments on the house from community property following marriage or to use his or property following marriage or to use his or her labor to improve the house during her labor to improve the house during marriage marriage

Both of these situations create some of the Both of these situations create some of the most confusing issues in community most confusing issues in community property property

Purchases of Mixed PropertyPurchases of Mixed Property

When property is purchased using When property is purchased using both community and separate both community and separate property, the property is property, the property is proportioned proportioned

Marital Community$100,000 $100,000

$100,000

Couple buys a $300,000 house and uses $100,000 from the wife’s separate property, $100,000 from the husband’s separate property and $100,000 from community property. The house is 1/3 wife’s, 1/3 husband’s and 1/3 Community property

Marital Community

$200,000 $200,000$200,000

If the house appreciates to $600,000, the wife has $200,000 in separateproperty, the husband has $200,000 in separate property and the communityhas $200,000 in property.

Community Expenditures on Community Expenditures on Separate PropertySeparate Property

Two common situations arise when Two common situations arise when one spouse owns separate property one spouse owns separate property such as a house prior to marriagesuch as a house prior to marriage The community uses its labor to improve The community uses its labor to improve

the house the house The community pays the mortgage on The community pays the mortgage on

the house the house

Community LaborCommunity Labor

When the community exerts its labor When the community exerts its labor on separate property, it creates a on separate property, it creates a community interest for that value in community interest for that value in the propertythe property For example, if a wife owns a house and For example, if a wife owns a house and

the husband builds a new deck that the husband builds a new deck that causes the value of the house to causes the value of the house to increase by $50,000, the increase by $50,000, the communitycommunity now has a $50,000 interest in the housenow has a $50,000 interest in the house

Community Pays MortgageCommunity Pays Mortgage

When the community pays mortgage When the community pays mortgage on separate property owned by one on separate property owned by one spouse, that spouse owes the spouse, that spouse owes the community for that expenditurecommunity for that expenditure For example, if the mortgage on the For example, if the mortgage on the

wife’s house is paid with her salary while wife’s house is paid with her salary while the couple is married, she owes the the couple is married, she owes the communitycommunity the value of all of those the value of all of those mortgage payments mortgage payments


CommunityCommunity




HouseHouse

Coffee Shop Coffee Shop InvestmentsInvestments

Lake CabinLake Cabin

Savings Savings AccountAccount

BoatBoat

Case Study 2Case Study 2CommunityCommunity




HouseHouse ?? ?? ??Coffee Shop Coffee Shop InvestmentsInvestments

√√

Lake CabinLake Cabin √√Savings Savings AccountAccount

√√

BoatBoat √√

The HouseThe House

The houses is the wife’s separate The houses is the wife’s separate property, however the property, however the community community has an interest in the house fromhas an interest in the house from The mortgage paid during the marriage The mortgage paid during the marriage The labor that the husband did on the The labor that the husband did on the

househouse

Personal Injury AwardsPersonal Injury Awards

Personal injury awards for medical Personal injury awards for medical expenses and for lost wages are expenses and for lost wages are community propertycommunity property

Personal injury awards for pain & Personal injury awards for pain & suffering are suffering are separate property separate property of of the spouse who was injuredthe spouse who was injured


CommunityCommunity




Amazon Amazon InvestmentInvestment

Medical Medical DegreeDegree

Casino Casino WinningsWinnings

MustangMustang

Mini-vanMini-van


CommunityCommunity




Amazon Amazon InvestmentInvestment

√√

Medical Medical DegreeDegree

√√

Casino Casino WinningsWinnings

√√

MustangMustang √√Mini-vanMini-van √√

SeparationSeparation

A married couple continues to accrue A married couple continues to accrue community property until they either community property until they either divorce or the marriage is defunctdivorce or the marriage is defunct

Defunct is a legal term that means Defunct is a legal term that means more than mere separationmore than mere separation

In general, the couple must have no In general, the couple must have no intention of getting back togetherintention of getting back together


CommunityCommunity




Watch, Tux & Watch, Tux & ClothingClothing

Certificate of Certificate of DepositDeposit

$2500$2500

Lottery Lottery WinningsWinnings

$200,000$200,000

2% From the 2% From the MovieMovie


CommunityCommunity




Watch, Tux & Watch, Tux & ClothingClothing

√√

Certificate of Certificate of DepositDeposit

√√

$2500$2500 √√Lottery Lottery WinningsWinnings

√√

$200,000$200,000 √√2% From the 2% From the MovieMovie

√√


Upon dissolution of marriage, each Upon dissolution of marriage, each spouse gets:spouse gets: His or her separate property His or her separate property One half of all of the community property One half of all of the community property

This does not mean that you split the This does not mean that you split the house in half – it means that the court house in half – it means that the court will balance the distribution of property will balance the distribution of property so that each gets ½ of the total value so that each gets ½ of the total value


In Washington, judges have a great deal In Washington, judges have a great deal of discretion to of discretion to equitablyequitably distribute the distribute the property and give one spouse more or property and give one spouse more or less than 50% of the community less than 50% of the community propertyproperty

For example, if the husband is a drug For example, if the husband is a drug addict who has never held a job, the addict who has never held a job, the court may not grant him ½ of the court may not grant him ½ of the community property accrued through community property accrued through the wife’s laborthe wife’s labor

DeathDeath

Community property laws limit a Community property laws limit a spouse’s ability to dispose of spouse’s ability to dispose of property through a will at his or her property through a will at his or her deathdeath

At death, a spouse may dispose of:At death, a spouse may dispose of: His or her separate property His or her separate property One half of the community propertyOne half of the community property

Community Property and Non-Community Property and Non-Married CouplesMarried Couples

Meretricious Relationships Meretricious Relationships Relationships must be stable and marital Relationships must be stable and marital

like like Duration of the relationship Duration of the relationship Cohabitation Cohabitation Pooling of resourcesPooling of resources Intent of the parties Intent of the parties Purpose of the relationship Purpose of the relationship

Parties must know that they are not Parties must know that they are not marriedmarried

EquityEquity

If a judge finds that a meretricious If a judge finds that a meretricious relationship exists, she will use her relationship exists, she will use her equitable powersequitable powers to fairly distribute to fairly distribute property based on community property based on community property principles property principles

dissolution of marriage and community property. dissolution of marriage in washington, divorce is...

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marriage property

community property washington

spouse property

community property matter

marital community slide

land real property

land personal property

clothes personal property