Dividing a business in a Washington divorce is one of the most contentious issues a couple can face—especially when the business’s primary asset is uncollected accounts receivable. In In re Marriage of Ellison, No. 87236-2-I (Wash. Ct. App. March 9, 2026), the Washington Court of Appeals, Division One, upheld a King County trial court’s decision to value a solo law practice’s accounts receivable at their full gross amount of $472,000 after the business owner failed to provide credible evidence justifying a lower figure. The case offers critical lessons for anyone going through a divorce that involves a business, professional practice, or significant financial accounts.
If you are facing a divorce involving business assets, property division, or complex financial issues, the family law team at Blair & Kim can help. Contact us for a confidential case evaluation.
The Dispute: How Much Are Uncollected Fees Really Worth?
The parties—both practicing attorneys in Washington—married in 2014 and separated in September 2021. During the marriage, one spouse opened a solo bankruptcy law practice. The parties agreed that as of January 2022, the practice had $472,000 in gross accounts receivable. That was the main asset of the business, which had no significant equipment, real estate, or capital reserves.
At trial, the business owner argued the accounts receivable should be valued at a steep discount—as low as $75,278—because not all accounts would be collected, he would incur costs collecting them, and some debts were “bad.” He presented a “waterfall analysis” to support this position.
The trial court rejected the discount. It found the owner’s testimony “not coherent,” “sometimes contradictory,” and lacking supporting documentation. The court noted that record-keeping of client accounts is routine—if not ethically required—in law firms, and the owner was in the best position to produce those records but did not. The court valued the accounts receivable at the full $472,000 and compensated for any resulting inequity by awarding the owner a 55 percent share of the overall community assets.
Key Takeaways for Washington Divorce Cases
1. The Burden Is on You to Prove a Lower Valuation
Under Washington law, trial courts have broad discretion in valuing property. In Ellison, the Court of Appeals confirmed that when both parties agree on the gross value of an asset, the party seeking a reduced valuation bears the burden of proving that discount by a preponderance of the evidence. Self-serving testimony alone is not enough. The court expected documentation—time records, historical collection data, account-specific evidence—and none was provided.
For business owners going through a divorce in Washington, the lesson is clear: if you believe your business’s accounts receivable, client contracts, or other assets are worth less than their face value, you must come to trial with detailed, well-organized financial records that support your position. A back-of-the-napkin analysis will not suffice.
2. Tracing Post-Separation Spending Matters
The business owner also argued that the other spouse had “drained” a community bank account after separation. The trial court rejected this claim after finding the other spouse credibly traced post-separation expenditures to community expenses: school tuition, guardian ad litem fees, federal taxes, home repairs, and contributions to a child’s 529 education account.
This highlights the importance of tracing in Washington divorces. When one spouse controls a community account after separation, the other spouse may claim the funds were dissipated. But if the spending spouse can trace every dollar to legitimate community expenses—and can back it up with bank statements and testimony—the dissipation claim will fail.
Whether you need to trace community funds, value a professional practice, or protect your share of marital assets, Blair & Kim’s family law attorneys can guide you through the process. With offices in Seattle and Bellevue, the firm handles complex property division cases throughout King County and the greater Puget Sound region. Reach out to discuss your case.
3. The Court Chooses the Valuation Date—and Separation Date Is Common
The business owner argued that his spouse’s retirement accounts and stock options should be valued as of 2024 (when the property division became effective) rather than as of the September 2021 separation date. The Court of Appeals rejected this, reaffirming that Washington trial courts have discretion to choose the valuation date for each asset. The court cited In re Marriage of Hurd and Lucker v. Lucker for the well-established principle that no single valuation date is required. The court found no reason to allow one spouse to profit from the other’s post-separation investment gains.
4. All Assets Must Be Distributed—or the Court Risks Remand
Despite affirming the overall property division, the Court of Appeals remanded one issue: a restricted stock options account that appeared on the asset spreadsheet with no assigned value and no indication it had been distributed. The court cited In re Marriage of Soriano for the principle that a trial court must dispose of all assets brought before it. If property is left undisposed, remand is required.
This is an important procedural point. In complex divorces with many accounts and assets, items can fall through the cracks. Both parties—and their attorneys—should carefully review final orders to ensure every asset and liability has been addressed.
Navigating Property Division in a Washington Divorce
Washington is a community property state, and courts are required to divide assets and liabilities in a manner that is “just and equitable” under RCW 26.09.080. That does not necessarily mean a 50/50 split. As Ellison illustrates, courts consider factors like the nature and extent of each asset, each spouse’s economic circumstances, and any inequities that arise from the valuation of specific property. The court may adjust the overall percentage split to account for uncertainties in valuing particular assets.
The attorneys at Blair & Kim, PLLC understand the complexities of property division in Washington divorces, from valuing professional practices and retirement accounts to tracing community funds and negotiating equitable outcomes. With offices in Seattle and Bellevue, the firm serves clients throughout King, Pierce, and Snohomish Counties.
If you are going through a divorce involving a business, professional practice, or complex financial assets, contact Blair & Kim today at (206) 622-6562 or submit a confidential inquiry online.