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Property Division – The Family Home

What happens to the family home in a divorce or legal separation? For property awards in Washington State, the court must make three primary decisions: 1) the value of the property, 2) the characterization of the property as either community property, separate property, or a combination of the two, and 3) the award or division of the property. In every case where parties own real estate, the court will usually be tasked with: 1) awarding the home to one party, or 2) ordering that the home be sold, with the proceeds divided between the parties. If the home is sold, the market will set the value for the property, and the net proceeds (after costs of sale) will be divided or awarded between the parties. If awarded to one party, the property value will either need to be agreed or appraised by an expert and will not include the costs of sale.

Under Washington law, all property in a divorce action is presumed community, until proven separate. When it comes characterizing a home, characterization will depend upon the community or separate character of the resources used to acquire title to the property. If owned before marriage or purchased during the marriage with separate funds, it will typically be separate property. If purchased during the marriage with community funds and earnings it will typically be community property. However, there are instances where it could have a mixed character. For example, a spouse may have owned a home prior to marriage. That home may then be sold, with the net proceeds used as a downpayment on a new property. For the same property the purchase may require both parties to sign on the mortgage. In that instance, and under the “mortgage rule,” the separate interest is represented by home sale proceeds used for the purchase, and the community interest would be based upon the amount of lending credit pledged by the parties for the mortgage. Of course, this is just an example of the many types of transactions that could significantly affect the final property awards in your divorce.

Finally, when it comes to the award of the home, parties should also be aware that if they have children, Washington law looks at “the desirability of awarding the family home or the right to live therein for reasonable periods to a spouse … with whom the children reside the majority of the time.” The court may award the family home to the parent with whom the children spend most of their time. Given the plethora of potential factors, having an attorney that understands characterization as well as the interplay of parenting when it comes to real property awards in a divorce is vital to the success of your case.