Options for Managing Marital Property in Washington State
Washington laws recognize "community property" rights in a divorce, meaning that nearly all property acquired during a marriage is considered jointly owned by both spouses. In general, the only property that isn't considered owned by both spouses are assets purchased prior to marriage, gifts to only one spouse, and inheritances—but even these can become joint property in certain circumstances.
While the best way to hold ownership of cash and property will depend on your family's particular situation, here are a few best practices for any engaged couple:
- Consider prenuptial agreements. If one partner owns or earns considerably more than the other, a prenuptial (or premarital) agreement can establish which property isn't subject to division in a divorce.
- Don't pay off one another's debts. If you use separate funds to pay off a partner's car, student loans, or any marital debt, those funds may be considered marital property during divorce.
- Don't commingle separate property. If you have an account that was opened in your own name and funded with gifts or an inheritance, it may be considered a non-marital account. However, if you deposit income earned during the marriage—or open a joint bank account with non-marital funds—the funds become "commingled," removing the status of separate property.
- Keep good records. It's a good idea to keep complete and accurate financial records of all accounts, but it's especially important to maintain records for separate property. Account statements and ledgers can be used to establish when the account was opened, how it was funded, and why it should be considered independent from the marital estate.
- Spend separate funds carefully. It's possible to spend non-marital funds on a purchase and keep the purchased property separate. For example, if you buy a car with money from a separate bank account, the car will be considered separate property. Of course, if your spouse pays for some of the purchase, is named on the title, or even performs maintenance on the vehicle, the car could lose its status as non-marital property.
- Create a separate account for injury damages. The law dictates that any money awarded in a personal injury case is separate property, even if it was acquired during the marriage. Your spouse may have some claim to the loss of income and lost services portion of the damages, but the majority of the settlement is yours alone.
- Be prepared to share some of your business. If you own business interests prior to marriage, it can be extremely difficult to keep the business as entirely separate property. Any increase in the business’ value may be considered joint property, but so will the value of your spouse's contributions to it.
An Experienced Divorce Attorney Can Help Divide Your Marital Assets
At the Law Offices of Molly B. Kenny, we know how stressful separation can be. We can perform forensic accounting to identify all assets, ensuring you have what you need to move on after divorce. Call the today to arrange a private consultation, or use our online contact form to have us get back to you.