How is Property and Debt Split During a Divorce?

Property and Debt Split during Divorce - Seattle Divorce Services

In Washington the courts are instructed to make a “just and equitable” division of all property and debt, both community and separate.

Some factors the court is to consider include the nature and extent of the property, the duration of the marriage, and the economic circumstances of each spouse.

You can see that this gives the court a HUGE amount of discretion in terms of deciding what is “just and equitable”. Because the law is so open on this, we lawyers tend to come up with our own rules of thumb, based on our experiences and the experiences of other lawyers we talk to.

Settlement discussions are usually based on our common understanding of what is LIKELY to happen at court, because we cannot KNOW what would happen at court in a given case.

The first rule of thumb is that the court will award each party their separate property and debt, and divide the community property and debt. However, there certainly are cases where a court may choose to give one spouse’s separate property to the other spouse where the court feels that to do otherwise would result in an unfair outcome (maybe one that was too heavily balanced towards one party).

A second rule of thumb is that the community will be divided relatively equally if the other economic circumstances are relatively equal, but will often award more of the community to a spouse who will be left with a significantly lower income or less separate property.

A third rule of thumb is that in short term marriages, the court is more concerned with putting the parties back where they were before coming into the marriage; whereas in long term marriages, the court has more concern for putting the parties in more equal positions going forward out of the marriage.

This might mean that in a longer term marriage the court is going to be more concerned with giving more assets (or spousal support) to a lower earning spouse than it would in a short term marriage.

Typically the court, or the parties by agreement, determines a percentage split that should be applied in a particular case, and then starts awarding items of property and debt to bring the split to the percentage. I like to say we make piles rather than divide each item of property.

So if the split is to be 60/40, we might put items A and B in the first spouse’s pile, items C and D in the second spouse’s pile, and then divide item E (maybe house equity or a retirement plan) in such a way that the overall result is 60/40.