[WSBAPT] Separate or Community Property or both?

[Eric Nelsen]

I think still unsure because not enough facts.


  1.  House is presumed to be separate property of decedent because decedent entered title before marriage. General rule is that it remains separate property in the absence of a deed executed with intent to change character to community.
  2.  That said, if there is a purchase money mortgage on the property, payments made using community funds arguably create a "community right of equitable reimbursement, secured by an equitable lien on the separate property real estate." If the mortgage is just a HELOC or other non-purchase loan and isn't related to the purchase, payments on it may or may not be reimbursable to the community.
  3.  Refinancing can make the question of "purchase money mortgage or not?" tricky. In general I look at the balances of each refinance to see if they were taking out cash or just refinancing to get a better interest rate. I do my best to trace the purchase-related balance through refinances.
  4.  Other direct contributions of community funds to real estate expenses, like paying property taxes and insurance and performing repairs, maintenance, and renovations, can also cause a right to reimbursement of the community.
  5.  HOWEVER, if the marital couple lived in the house, all those community contributions of funds must be offset by the value received by the community for living there. That value could partly or completely offset the equitable right of reimbursement. Generally the measure is something akin to a "rental value" as if the community were renting the property from the decedent's separate property estate.

All of this is very fuzzy and arguable-it's a question of equity, to be sure-and might require a decision by a judge if the parties can't reach an agreement on what is a fair amount of reimbursable community interest in the property.

Sincerely,

Eric

Eric C. Nelsen
Sayre Law Offices, PLLC
1417 31st Ave South
Seattle WA 98144-3909
206-625-0092
eric at sayrelawoffices.com<mailto:eric at sayrelawoffices.com>

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Jon Fritzler
Sent: Wednesday, February 26, 2025 3:55 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Separate or Community Property or both?

Decedent and Surviving Spouse (SS) were married for 22 years.  Decedent owned a house prior to marriage but mortgage payments were made throughout the marriage.  (There is still a balance owed on a mortgage.) Is the entire house separate property because decedent purchased it prior to the marriage or is it community property to the extent that mortgage payments were made during the marriage?

It matters because the decedent died intestate and never had any children but his siblings are entitled to 25% of his separate property pursuant to RCW 11.04.015.

Jon M. Fritzler
Attorney at Law

11015 NE Fourth Plain Blvd., Suite D
Vancouver, WA 98662
Tel. 360.818.4431
Eml fritzlerlaw at outlook.com<mailto:fritzlerlaw at outlook.com>

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