The Percentage Division
Retirement and Pension Plans
The Family Home
The Percentage Division:
Naturally, a divorce entails dividing up the assets. The question is who gets what and why. Washington State is a community property state. This means that when we look at married couples we see what they own together, i.e. community property and what they own by themselves, i.e. their separate property. Generally speaking, everything acquired before marriage is separate property and everything acquired during marriage is community property. Generally, anything acquired after separation of the spouses is considered the separate property of the acquiring spouse. There are some exceptions to these general rules, the most notable being gifts to one spouse, not both spouses, which, if given even during marriage are considered separate property of the recipient. As a very general rule, at the end of the divorce separate property remains with the party whose separate property it is, and community property is shared between the spouses. Where the circumstances of the two spouses are roughly equivalent a split of the community property is often 50/50. However, there are many situations where the split is not 50/50. In some cases, the court may even take some of one person's separate property and give it to the other due to the unequal financial circumstances of the spouses. In the end, it comes down to a question of what is fair.
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Retirement and Pension Plans:
People who come into my office often do not know that employment benefits such as pension plans, 401ks, 403(b)s, acquired during marriage ARE community property and ARE subject to possible division between spouses. See Financial Planning, Taxes and Divorce for examples of tax traps and financial planning issues.
The Family Home:
It is an unfortunate reality for many spouses who divorce that once alone cannot afford to keep the family home either because the mortgage is too high or the equity needs to be split between the parties or be used for something else. In this case, you will need to find out how much the house is worth. Hiring an Appraiser is a good idea. This is the acceptable method attorneys' use when going to trial. You can agree to use the same appraiser if you like. In that case, both parties should make it clear to the appraiser that he/she represents both parties. Select a Real Estate Agent you both feel comfortable with to list your house. Selling your home can be emotionally distressing so choose an agent who exhibits sensitivity to your situation. See Financial Planning, Taxes and Divorce for issues of valuing the home and potential capital gains.
The Asset and Liability Checklist will help you to think about what debts and assets you have. For assets, consider everything of value. Naturally, this checklist cannot cover everything. Only you know what you have, so please list it for yourself.
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