Few financial transactions expose your assets to as much risk as divorce, and none are performed during such an emotional upheaval. Clients suffering guilt for wanting out of the marriage, or attempting to save the marriage at all cost, are inclined to surrender far too much asset value to their spouse. Angry spouses will over reach to financially punish their soon to be former spouse. Financially weaker or dependent spouses see the divorce as their last chance to grab a solid financial future.
Washington Property and Debt Division in DivorceOne of the primary duties of a good divorce lawyer is to protect their client’s assets during the divorce process. The attorney must know, and use, all of the proper legal tools available. The attorney must be able to evaluate and analyze the assets to design a balanced property division.
Many high value asset divorces will need to have a financial team created to assist in the process. Your attorney will need a good working relationship with a business appraiser, real estate appraiser, CPA, and financial adviser to create the team necessary for each case.
Asset protection will incorporate a proper calculation and negotiation of child support, special needs children expenses, spousal support, and personal debt division. Though technically these are not part of the high value asset division, they are financial issues that will become intertwined. The overall goal is to agree to reasonable support combined with fair asset and debt division.
The client and their attorney must stay level headed during the divorce process. Unreasonable or reactionary attitudes will only undermine a good financial plan.
We realize that this is YOUR marriage and YOUR divorce, but the best asset protection comes from treating the financial aspect as a business transaction.
Property & Debt Division
It is a common belief among men that their spouses will take everything in a divorce. This doesn’t have to happen. Washington is a Community Property state. That means that, at the time of divorce, all of the family’s property and debts are before the court to be equitably divided between the couple.
An Equitable Split
If there is no divorce settlement agreement in place, it is the court’s job to “equitably” divide all the family assets. Equitably does not always mean “equally”. The court will often award a greater share of the property and fewer debts to the lower wage earning spouse. Even property you owned separately before the marriage can potentially be divided by the court.
Does this mean the wife gets to stay in the house and drive the cars while the husband pays the mortgage and the car insurance? Not at all. All property including assets and debts are divided during a divorce. The court strives to give each spouse an equitable share of both debts and property.
Community vs. Separate Property
Divorce law in Washington generally regards assets and debts acquired during the marriage as Community Property, but everything the spouses acquired and owned before the marriage is Separate Property. Generally each party is awarded their own separate property, and a portion of the community property. When dividing property, the court considers several factors including the length of the marriage and the financial differences between the spouses. When a marriage has lasted a long time, or one spouse is severely challenged financially, the court may even award a portion of your separate property to your wife.
The division of property often hits men hard. As husbands usually work more than wives, a man can suddenly see everything he has long worked for being divided up, given away, and not necessarily equally. Men who have worked hard to build a small business face the possibility of losing part of it in divorce, or being forced to sell.
It is vital for you and your attorney to be thorough in your valuation of the assets. You may need the assistance of real estate agents and/or accountants to provide accurate appraisals of property or business holdings. Once the divorce is final, the property and debt division included in the Decree is final and cannot be changed. You only have one opportunity to win a fair division of the property and it must happen before the divorce is finalized. Characterizing property as “community” or “separate” is often one of the most difficult tasks during divorce. Many legal issues can effect that determination.
What About My Retirement?
Many men are surprised to discover that pensions and retirement plans are community property and are divided in a divorce. Depending on the type of benefit plan, there are different rules governing division. Speak with one of our attorneys to learn more about how your retirement plan will be affected.