Magnuson Lowell Blog
Each week we post a blog about relevant legal issues. Glance through our various topics to learn more about a particular legal situation.
These articles are for limited informational purposes only and are not, nor are they intended to be, legal advice. You should not rely on this information for your case and should consult with an attorney for advice regarding your individual situation.
Divorce often involves untangling years of intertwined lives, emotions, and, notably, finances. In Washington, a community property state, one of the most critical tasks in a divorce is properly characterizing assets and debts as either community or separate property. This distinction significantly impacts the division of property and ensuring fairness in the settlement.
Community vs. Separate Property: A Brief Overview
In Washington, community property is presumed to include assets and debts acquired during the marriage. Both spouses have a fair and equitable interest in these assets and liabilities, regardless of whose name is on the title or account. On the other hand, separate property often consists of assets and debts that one spouse acquired before the marriage, after separation, or by inheritance or gift during the marriage. Additionally, certain assets that can be traced back to separate property sources remain separate, even if they have been commingled with community property.
The Importance of Proper Characterization
The Role of Financial Documentation and Experts
One key to accurate property characterization is gathering all relevant financial information. Detailed records and historical financial documents are crucial in tracing the origins and changes in ownership of various assets.
Example: 401(k) Accounts
Consider a 401(k) account that was started before the marriage. If the account is rolled into another 401(k) after the marriage, it becomes a quasi-community asset. Properly tracing the contributions, gains, and rollovers can determine how much of the 401(k) is separate property versus community property. This often requires the expertise of a forensic accountant who can analyze financial records and provide a clear breakdown.
Other Examples
Steps to Ensure Accurate Characterization
Working with a Divorce Attorney
Properly characterizing community versus separate property in a Washington divorce is crucial for ensuring a fair and equitable division of assets. Gathering all financial information and consulting with experts can make a significant difference in the accuracy of this process. By taking these steps, you can protect your financial interests and move forward with clarity and confidence. If you are facing a divorce and need assistance with property characterization, call the legal team at the law offices of Magnuson Lowell PS for a free telephone case evaluation - 425-800-0573