Gifts & Community Property Laws in WA

Divorce is a complex process, and the division of assets can be particularly worrisome, especially when it comes to sentimental items like gifts. In Washington, a community property state, understanding the rules surrounding gift ownership during divorce is important.

Imagine receiving a cherished gift only to face the possibility of losing it due to marital dissolution. This blog aims to provide clear and straightforward information about how gifts are treated in Washington divorces. We'll break down the legalities, explain the key factors involved, and offer guidance on protecting your personal belongings.

What Is Community Property?

Think of community property as a pool of the combined assets and debts of both spouses. Under this system, most assets acquired during the marriage – regardless of who earned them – belong equally to both spouses.

This includes the following:

• Income: salaries, bonuses, investment gains, and retirement assets accrued throughout the marriage
• Business assets: family-owned businesses and professional practices
• Possessions: houses, vehicles, boats, and other valuables purchased with community funds or within the marriage timeframe
• Liabilities: joint credit card debt, personal loans, and mortgages undertaken during the marriage

Not everything falls into the community pool. Separate property remains distinct and belongs solely to the individual spouse who owned it before marriage or received it as a gift or inheritance after marriage.

Can You Keep Gifts If You Get a Divorce in WA?

Usually, but not always. Under RCW 26.16.020, property obtained after marriage as a “gift, bequest, devise, descent, or inheritance, with the rents, issues and profits thereof,” is the separate property of the recipient. It is important to note that you will need to prove that the gift was intended solely for you.

In some situations, however, separate property can be subject to property division to reach an equitable outcome. Washington law requires that when the court divides your property, it must do so in a way that is "just and equitable" (RCW 26.09.080). "Equitable" doesn't necessarily mean splitting things 50-50 and could result in a disproportionate division based on the economic circumstances of each spouse.

Gifts Can Become Community (Or Marital Property)

Commingling happens when separate property – assets owned by one spouse before marriage or received as gifts or inheritance during the marriage – becomes mixed with community property. Once separate property is commingled, it can be extremely challenging, if not impossible, to distinguish it from community property.

For instance, let's say you deposited your inheritance (separate property) into a joint account (community property), and then both of you contribute to and withdraw from that account regularly. Or, in another case, you turn a vacation home gifted to you by your parents into a rental property and have your spouse help with the property’s upkeep and maintenance.

Over time, tracking the original separate property – in this case, your inheritance – becomes nearly impossible. This is how inheritance or gifts can unwittingly become community property.

The most straightforward way to prevent commingling is to keep separate assets in a separate account under your name only. This includes inheritances, gifts, and anything you owned prior to the marriage.

You can also take the following steps to protect your gifts from division:

• Establish a pre- or postnuptial agreement.
• Keep detailed records that outline how assets are received and how you maintain and manage the assets.

Experienced Property Division Attorneys

The attorneys at McKinley Irvin have extensive experience in property division in divorce, including complex marital assets like high net-worth property, real estate, business interests, and investments. Contact us for more information.