Articles Posted in Divorce

A trial court in a Washington divorce generally has broad discretion in the disposition of property and debts.  Once the court enters the dissolution decree, though, it generally may not modify the property division unless there are conditions justifying the reopening of a judgment.  The court may, however, correct clerical errors pursuant to CR 60(a). The court may not correct judicial errors, which involve “errors of substance.”

In a recent case, a husband challenged a court order that he argued changed the distribution of debt after he had moved for clarification of the original decree.

In his divorce petition, the husband had requested the debts be split equally and paid from the proceeds of the real property the parties owned together.  The trial court awarded the husband the landscaping business along with its premises, equipment, and debt.  The court awarded the wife $38,000 in spousal maintenance. The “Petitioner’s Debt” section of the decree stated the husband pay the 16 listed debts.  Next to a mortgage debt and accounts in the husband’s name, the court wrote 100%.  The court did not write any percentage next to two items on the list.  The rest of the items had 50% written by them.

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Courts in Washington divorce cases must make an equitable and just distribution of the couple’s property and liabilities.  In some cases where one spouse owes the other, spousal maintenance or alimony may be used to achieve an equitable and just distribution.  In a recent case, a husband challenged the award of spousal maintenance to pay off his share of the community debt.

The evidence showed the wife had a home worth about $500,000 with a mortgage and about $400,000 in other assets at the time of the marriage.  A prenuptial agreement provided that the husband had no interest in the home. The husband had a checking account with a small balance and a vehicle.  He also had an interest in a limited liability company he established and shares of another company, with values listed as “unknown.” He owed $8,000 on the vehicle, $36,000 in back taxes, and $55,000 on a promissory note to the wife.  The wife’s assets were depleted during the marriage and the couple accrued significant community debt in the wife’s name.

In accordance with the prenuptial agreement, the trial court awarded the home to the wife.  It also ordered the husband to repay the promissory note.  The trial court found a BMW in the wife’s name was community property.  In her petition, the wife listed the vehicle and the debt on it as property to be awarded to the husband.  She ultimately changed that position, partly because the husband had not obtained separate financing.  The trial court awarded the vehicle to the wife, noting the husband had surrendered his driver’s license and therefore would not be allowed to drive for a significant while.

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In a Washington divorce case, a disability allowance is treated differently depending on whether it replaces future lost wages or a standard retirement pension.  This distinction will determine if the allowance is considered separate or community property. In a recent case, an ex-wife challenged the characterization of her ex-husband’s disability allowance.

The ex-husband began working for a fire department in 1963.  The couple married in 1991.  The ex-husband was injured on the job and determined to be physically unable to perform his job duties.  He began receiving a monthly allowance of about 60% of his salary.

The ex-husband brought most of the assets to the marriage, but the couple signed a community property agreement that purported to transfer all separate property to community property.

Even when the parties to a Washington divorce agree that one spouse should pay spousal maintenance to the other, they may not agree to the amount or duration of that maintenance.  In making determinations regarding maintenance, courts should consider certain factors and make specific findings.  A husband successfully challenged the amount and duration of maintenance he was ordered to pay his former wife because the court had filed to fully address the required factors and make findings regarding the parties’ income.

The couple married in 1987.  The wife stayed home and cared for the children.  The husband retired from the Marine Corps at the age of 43 in 2006 and began working as a truck driver.  The couple separated in 2012 and the husband filed for divorce in 2015.  He agreed he would pay maintenance to the wife.

On a monthly basis, the husband received wages, significant overtime earnings, military disability, and military retirement. In addition to his military retirement, the husband had a retirement account with his current employer and a 401k.  He claimed $3,995 in monthly expenses.  The wife declared she had no income and $3,566 in expenses each month.

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Once a Washington divorce decree is issued, a maintenance award can only be modified by the court when the party seeking the modification shows a substantial change in circumstances.  A fact unknown to the trial court or an unanticipated fact that arises after the decree is entered may constitute a substantial change in circumstances.  In a case involving spousal maintenance, commonly referred to as “alimony,” a substantial change may involve a significant increase or decrease in income.  In a recent case, the ex-wife sought to continue maintenance when her ex-husband decided not to retire at the time they had previously expected him to do so.

The divorce decree required the husband to pay spousal maintenance in the amount of $1100 per month for 48 months.  The wife sought to extend the maintenance four years later.  She alleged there was a substantial change in circumstances because the husband had not retired from the military as she had expected.  If he had retired, she would have started receiving part of his retirement benefits when the maintenance payments stopped.  She provided an email from the husband in which he stated he would pay the maintenance “until [he] got out.” The husband told her he was not ready to retire in December 2016, and suggested he would not do so until 2019.  The wife requested the maintenance continue until the husband’s retirement. She also requested attorney fees in her reply declaration.

The commissioner denied the wife’s motion, finding no substantial change in circumstances.  The commissioner also granted the husband’s motion to strike the wife’s request for attorney’s fees and denied the request.

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Following a Washington final divorce decree, a maintenance award, also known as spousal support, may only be modified if there has been a substantial change in circumstances since the decree.  The change has to be something that was not within the contemplation of the parties at the time of the divorce.  There may be a change in circumstances if the spouse receiving maintenance was expected to become self-supporting, but is unable to do so through no substantial fault of his or her own.  A trial court may choose a disproportionate property division instead of ordering maintenance.

A former wife recently sought modification of an order of maintenance shortly before the maintenance obligation was to expire.  The couple had been married 30 years before they separated.  The husband was a cardiologist, and the wife had worked as a registered nurse, but stopped working in 1989.  She had been treated for mental health issues since 1996.

The husband was ordered to pay maintenance of $4,600 a month for five years, starting in August 2010, and child support of $1,400 a month until the youngest child graduated high school.   The monthly maintenance payment was to increase to $5,750 per month when the oldest child graduated.

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In a Washington divorce, the court must characterize the assets as separate or community property.  While categorizing some types of property are fairly straightforward, others can be more complicated.  Employee stock options, for example, are characterized based on when they were acquired.  The court must look not only at when the stock options were granted, but also when they vest and what they were intended to compensate.

If the stock options are vested, they are acquired when granted.  However, the court must apply the “time rule” to unvested stock options.  The time rule is a formula that allocates the stock options according to the services performed before and after separation.  The court must first determine if the employee received the stock options as compensation for past, present, or future services.  Unvested stock options granted for present services during the marriage while the spouses are living together are acquired when they are granted.  If the unvested stock options compensate for future services, they are acquired as they vest.  Once it makes this determination, the court then must apply the time rule to the first stock option to vest after the separation date.

Property acquired during a marriage is presumed to be community property, but Washington property division attorneys know there are exceptions to that rule.  Property that one spouse inherits or receives as a gift is presumed to be that spouse’s separate property.  A Washington appeals court recently considered whether inherited property in another country became community property when the husband claimed to have paid taxes and bought out other heirs with community funds.

The couple married in 1985 and separated in 2014.  The wife had inherited property in Peru that had been in her name since the 1990s. The husband argued he had built it up and bought out the other heirs.  He said he had worked for one of the heirs to buy the property.  He also argued that he paid $200 per year in property taxes.

The trial court found the property in Peru was the wife’s separate property by inheritance.  The husband appealed, arguing the trial court had mischaracterized the property in Peru and therefore divided the property inequitably.

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The court must distribute the assets in a divorce if the couple does not reach an agreement as to distribution.  Certain property may be considered separate property.  In Washington, an asset is separate property if it is either acquired before the marriage, acquired during the marriage by gift or inheritance, or acquired during the marriage with the traceable proceeds of separate property.  If property is acquired during the marriage, it is presumed to be community property.  Washington divorce attorneys know, however, that separate property may become community property in certain circumstances.

A Washington appeals court considered whether certain assets were separate or community property in a recent divorce case.  The husband appealed the distribution of property.

Both parties had worked and begun funding retirement prior to their marriage.  The husband had worked for the same employer for 20 years prior to the marriage, and he contributed to a 401(k) during that time.  He continued to work for the company and contribute to the 401(k) for two years after the marriage.  The company subsequently merged with another organization, and the husband lost his job.

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No one wants to think about divorce before they are even married, but a prenuptial agreement can protect both parties if the marriage doesn’t work out.  While most people think in terms of either being married or divorced, Washington divorce attorneys understand there may be significant periods of separation.  If a prenuptial agreement does not specifically address what occurs during the separation, the parties will likely be considered married until the dissolution.  This could result in separate property converting to community property during the separation, as occurred in a recent case.

The husband had become wealthy from the stock options he received as a Google employee.  The couple signed a prenuptial agreement and married in September 2005.  They separated in 2014 when the husband filed for divorce.

They reached an agreement on a parenting plan for their child, but they had to go to trial to resolve their financial issues.  The husband appealed the trial court’s distribution of property, challenging the interpretation of the prenuptial agreement.

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