Community Property Laws Explained

Posted on April 15, 2022 01:03pm
Community Property Laws Explained

Community property covers all of the possessions and ownership interests that a couple acquired during the course of their marriage. Marital property can also include all of the shared debts the spouses incurred during marriage, with a few exceptions. Essentially, both partners have a 50% ownership claim under community property law.

The state of Washington uses the concept of "community property" to determine which spouse should be awarded property ownership after a marriage. Under community property laws, almost all property acquired during the spouses’ marriage is considered jointly owned property and therefore subject to equal division if they divorce. However, individual spouses can have separate property that does not count as community property even after they enter into the marriage.

All property or assets that belong to a specific spouse are called “separate property,” which is anything that was theirs before the marriage. Separate property belongs to the respective spouse if the couple divorces.

Examples of separate property include:

  • Money deposited in bank accounts before marriage
  • Property you owned before marriage
  • Vehicles you owned before marriage
  • Assets you inherited before marriage

Washington’s Community Property Laws

Washington is one of eight of the few remaining community property states in the United States. Under Washington law, community property is the property acquired while the spouses were married.

In general, community property includes:

  • The earnings of either spouse during the marriage.
  • Any property obtained with a spouse’s earnings during the course of the marriage
  • Any property purchased with community funds
  • Inherited assets placed in a joint bank account

Commingled Assets

Separate property can become community property if an asset is commingled with a couple’s marital assets. This commonly occurs with inheritances and real estate funds. If one spouse inherits a substantial amount of money in their name, but puts the money into a joint bank account, then the assets are commingled and partially become community property. The same goes for if one spouse purchased the marital home but the other spouse’s property repairs contributed to an increased value.

When assets are commingled, it can be difficult for the spouses to prove that an asset should be counted as separate property. Commingled property is examined and distributed among the spouses on an asset-by-asset basis. If an asset is mixed with marital property and can’t be traced back to when it was separate, then it will be counted as community property and will be subject to division.

Community Property Agreements

A community property agreement is a legally binding agreement that spouses can use to switch all of the property they own into community property, this includes the spouses’ separate property and any assets acquired in the marriage. Spouses can decide if they want the community property agreement to take effect immediately or when a spouse passes away.

You are probably wondering why a married couple would want to use this strategy. Well, in the state of Washington, community property automatically transfers to the surviving spouse without going through probate. This will ensure the surviving spouse avoids the stress of dealing with the complicated probate process.

However, if the couple divorces, then the spouses risk losing their share of specific assets they wish to keep when the property is divided. Additionally, community property agreements can only be revoked with the consent of both parties, which means spouses will have to negotiate for the specific asset or property that they want.

Experienced Property Division Attorneys

Our compassionate legal team understands that dividing assets and debts can be a difficult issue in divorce, which is why we do our best to help clients reach fair agreements outside of court. If an agreement can’t be reached, however, our lawyers are prepared to protect our client's best interests through skillful litigation. If you have more questions about dividing property after filing for divorce, please reach out to us.

To request a consultation with a member of our team, please call 206-397-0399 or contact us online.

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