When spouses, domestic partners or committed intimate partners divorce or separate they must decide what to do with all of their property and debt. When they can’t agree, a judge must decide. The law is similar, but different, for those who are married or registered as domestic partners compared with those who simply have a long-term marriage-like relationship. There are several steps to take in determining how to “divvy-up” your property.
Itemization: First, list all the important assets and debts. Important means both financially important (like a house or retirement benefit) and emotionally important (like pets, heirlooms or family photos). It is somewhat helpful to categorize the items as follows: 1) realty; 2) retirements; 3) bank, investment and credit card accounts; 4) major personal property (like cars and boats); 5) minor personal property (like household furnishings and goods); and finally, 6) all your debts (like the mortgage loan, car loan, student loans, etc.).
Characterization: Second, all the items on the list must be characterized, meaning categorized as either “community property” or “separate property” of one of the spouses. This step usually requires the assistance of an attorney. Some items may be “mixed” character- both “community” and “separate” (like a house owned by one spouse before marriage that was improved during the marriage).
Valuation: Third, the items must be valued. Valuation can be accomplished by appraisal, comparative market analysis (CMA), using “blue book” values for vehicles (see www.KBB.com) and by researching on EBay or Craigslist for miscellaneous items.
Distribution: Fourth, the items must be distributed to one spouse/partner or the other. When the values of all the items on each person’s list are added together (debts have negative values) the total “equity” rarely is equal. This leads to the final step.
Equalization: Finally, equalization is accomplished by either moving items from one list to the other or by calculating an equity equalization payment or “buyout” figure that results in each spouse/partner having approximately an equal total value of equity. We can provide you with a spreadsheet that helps in accomplishing the above tasks in a clear and systematic way.
For divorcing spouses and domestic partners the court must abide by RCW 26.09.080. This statute requires the court to “characterize” the property as either “community property” or the “separate property” of either spouse. However, the court may distribute all property of either partner, not just community property, in the final decree to reach an “equitable distribution”. In contrast, couples in a “committed intimate relationship” (CIR) will have their property and debts characterized by the court by analogy to the community property laws, even though none of the property is technically “community property”. Only the “quasi-community property”, i.e. property that would have been “community” if the partners had been married, is before the court for distribution. Any separate property of an individual in a CIR is not distributable by the court and must remain that individual’s separate property in any final ruling by the court. See In re Long and Fregeau, 158 Wash.App. 919, 244 P.3d 2010.