Washington courts are to consider several factors when determining property distribution in a divorce. Those factors include the nature and extent of community property and of separate property, the duration of the marriage, and the financial circumstances of the parties. Thus, although the court characterizes property as community or separate, it may award one party’s separate property to the other if necessary to reach a just and equitable distribution. A Washington appeals court recently considered whether the duration of the marriage outweighed the characterization of property as separate.
The couple was married approximately 45 years. They lived on the property the husband’s grandparents had homesteaded without paying rent or mortgage. The husband ultimately inherited the property. The husband had been a farmer, and the wife was employed by a department store. They each earned around $20,000 per year and lived paycheck to paycheck. The husband inherited several hundred thousand dollars, however.
The wife petitioned for dissolution in 2014, and they separated later that year. They were 72 years old at the time. The wife had a monthly income of about $1,100, including social security and a pension. The husband had a monthly income of about $1,900 from social security and federal crop reclamation project payments.
The wife argued that, under case law, the trial court had to put the parties in roughly equal financial positions for the rest of their lives.
Since the husband had inherited all of the real property and most of the investment accounts from his relatives, the trial court found they were his separate property. The trial court found the husband’s separate property was worth more than $1 million. The court then awarded the wife $225,000 and the husband more than $800,000 of that separate property.
Finding the community property was worth $151,143, the court awarded the wife $106,532.50 and the husband $44,610.50. The husband died several days after the court entered the decree of dissolution.
The wife filed for reconsideration, arguing the court should have made the parties roughly financially equal because of the duration of the marriage. The husband’s attorney also moved for reconsideration, arguing that a vehicle, boat, and certain accounts should have been classified as separate property because they had been funded by the husband’s separate property.
The wife moved to strike the husband’s motion, arguing that the attorney did not have authority for the motion after the husband’s death, and the estate had not been substituted as a party before the deadline for filing the motion for reconsideration. The wife, however, moved to substitute the estate as a party, and the personal representative also moved to substitute himself as a party.
The court stated it wanted to get to the merits of the motions. It instructed the husband’s attorney to file another motion for reconsideration after it substituted the estate as the party. Both motions were subsequently heard after the substitution.
The wife asked for an explanation of why the court distributed about 75% of the total property to the husband. The court stated that it relied on the presumption that separate property was to be awarded to its owner except to avoid serious inequity. The court also stated that the husband should keep the real property that had been in his family to pass on to his own family. Furthermore, the court had wanted to make the distribution more equitable without completely invading the husband’s separate property.
The court recharacterized the vehicle, boat, and bank accounts as the husband’s separate property. It awarded the vehicle to the wife. The court then awarded the wife about 90% of the community property and about 22% of the husband’s separate property. This gave the wife a total of $324,172 and the husband $806,658.
The wife appealed. She argued the court abused its discretion in distributing the assets unequally. She argued the duration of the marriage required the court to put the parties in roughly equal financial positions, no matter how the property was characterized.
The appeals court looked at RCW 26.09.080, which requires the trial court to make the property distribution “just and equitable” by considering certain factors. One of these factors is the duration of the marriage, but the court is also to consider the nature and extent of community property and of separate property, as well as the parties’ economic circumstances.
At one time, case law limited trial courts awarding separate property to the other spouse to “exceptional circumstances.” The Washington Supreme Court changed this rule in 1985, finding that no single factor is to be given greater weight than the others as a matter of law. The Supreme Court held the property’s character was a relevant factor but not a controlling one.
The appeals court also noted that determining what is just and equitable is within the broad discretion of the trial court. That determination is only reversed in the event of a manifest abuse of discretion. “Just and equitable” does not require that the division be equal or mathematically precise. The court is to reach a fair distribution by using its discretion, rather than by relying on inflexible rules.
The trial court’s explanation of its distribution showed that it had not used an inflexible rule but had instead considered the factors and circumstances of the marriage. The appeals court found no abuse of discretion.
The appeals court also rejected the wife’s argument that the trial court erred in hearing the husband’s motion to reconsider. The appeals court noted that the court has discretion regarding the time limits applicable to substitution, but it does not have more than the time to file for reconsideration. However, the motion was filed timely, albeit without proper authority. The issue regarding the lack of authority was resolved when the estate was substituted as a party and ratified the motion.
The appeals court affirmed the trial court.
This case illustrates that courts are to consider all of the factors in property distribution, rather than relying on inflexible rules. A court may award the separate property of one party to the other. Additionally, a long-term marriage does not mean that assets will be split down the middle. The Washington high-asset divorce attorneys at Blair & Kim, PLLC understand property distribution law. If you are considering divorce, contact us at (206) 622-6562 or contact us online to discuss your case.
More Blog Posts:
Waste, Separate Property, and Deviation from the Standard Calculation in Washington Divorce
Complexities of Washington Divorce Involving Division of a Business