On September 16, 2014 the Washington State Court of Appeals, Division II issued a new opinion, In re Marriage of Byerley, that addressed the ways courts should determine whether homes lived in by unmarried couples should be treated as quasi-community property.
By way of background, Washington State has for many years had case law that allowed courts to treat property acquired by unmarried couples who were living in "intimate and committed" relationship as "quasi community property" and divide that property between them when that would be the most equitable outcome. These laws have applied to both same sex and opposite sex couples, but one of the public policy issues such cases seemed to be aimed at addressing was ways to allow same sex couple, unable to legally marry, to have their property divided at breakup or death in the same way married couples were allowed to do so. It has been unclear how strong the courts commitment to this case law would be with the legalization of same sex marriage and this case is one of the first in recent years to appear to take a less generous stance on quasi community property.
In Byerley, the couple were married and seeking a divorce. One of the disputed assets was a property purchased by the husband, before the marriage but around the time that the couple began living together in an intimate and committed relationship. The husband signed a purchase and sale agreement in July of 1996, took title in September of 1996, and began living in the house with his then girlfriend, soon to be wife, at that same time. The house was titled in his name alone and refinanced several times in his name alone. The couple used joint resources to pay the mortgage and other household expenses. The trial court found that the property had been acquired during the relationship and was to be treated as quasi-community property. The appellate court disagreed. It held that the property was "acquired" for purposes of determining its characterization on the date the purchase and sale agreement was signed, not the date the deed transferred. Therefore, it was acquired before the couple began living together and was assumed to be separate property absent evidence that the party who owned it as separate property intended to transfer it to the community.
It is not uncommon now for unmarried couples to live together in homes one of them purchased prior to the relationship. As joint assets are used to maintain the property and improve it, the nature of the property can become less clear and this can lead to serious problems when the couple splits or one dies. Couples wishing to avoid such disputes are often best served by setting out how that property should be treated in a co-habitation agreement that states what property will remain separate and what will be treated as community property. While this most recent case seems to be a bit of a reversal of the trend to find greater and greater rights to quasi-community property, it also shows how contentious and expensive such disputes can become.
If you are interested in finding out more about how to create a co-habitation agreement with your partner, contact us to schedule a free half hour consultation at (206) 459-1908 or [email protected].
By way of background, Washington State has for many years had case law that allowed courts to treat property acquired by unmarried couples who were living in "intimate and committed" relationship as "quasi community property" and divide that property between them when that would be the most equitable outcome. These laws have applied to both same sex and opposite sex couples, but one of the public policy issues such cases seemed to be aimed at addressing was ways to allow same sex couple, unable to legally marry, to have their property divided at breakup or death in the same way married couples were allowed to do so. It has been unclear how strong the courts commitment to this case law would be with the legalization of same sex marriage and this case is one of the first in recent years to appear to take a less generous stance on quasi community property.
In Byerley, the couple were married and seeking a divorce. One of the disputed assets was a property purchased by the husband, before the marriage but around the time that the couple began living together in an intimate and committed relationship. The husband signed a purchase and sale agreement in July of 1996, took title in September of 1996, and began living in the house with his then girlfriend, soon to be wife, at that same time. The house was titled in his name alone and refinanced several times in his name alone. The couple used joint resources to pay the mortgage and other household expenses. The trial court found that the property had been acquired during the relationship and was to be treated as quasi-community property. The appellate court disagreed. It held that the property was "acquired" for purposes of determining its characterization on the date the purchase and sale agreement was signed, not the date the deed transferred. Therefore, it was acquired before the couple began living together and was assumed to be separate property absent evidence that the party who owned it as separate property intended to transfer it to the community.
It is not uncommon now for unmarried couples to live together in homes one of them purchased prior to the relationship. As joint assets are used to maintain the property and improve it, the nature of the property can become less clear and this can lead to serious problems when the couple splits or one dies. Couples wishing to avoid such disputes are often best served by setting out how that property should be treated in a co-habitation agreement that states what property will remain separate and what will be treated as community property. While this most recent case seems to be a bit of a reversal of the trend to find greater and greater rights to quasi-community property, it also shows how contentious and expensive such disputes can become.
If you are interested in finding out more about how to create a co-habitation agreement with your partner, contact us to schedule a free half hour consultation at (206) 459-1908 or [email protected].
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