Dividing assets and financial responsibilities is a key element of any divorce in Washington. Some couples already have arrangements outlined in marital contracts, such as prenuptial agreements. Others may have to settle matters during divorce negotiations or prepare for litigation in family court.
Assets that represent a substantial investment and that play a role in financial stability can become key considerations in any divorce. The vehicle that one spouse uses to get to and from work or to take their children to school every morning can be a very important asset during divorce proceedings. Frequently, people finance their vehicle purchases. They do not owe them outright but rather have a loan attached that they must pay off before they hold title independently.
What typically happens with financed vehicles during Washington divorces?
Financed vehicles represent assets and debts
Many marital resources are assets worth a set amount of money. Spouses determine their value and then factor that into the broader property division discussion. Financed vehicles are a bit more complex. The vehicle may have a specific resale value. However, it is also a source of substantial debt. Spouses have to consider the equity accrued and the financial obligation via the loan attached to the vehicle when deciding how to handle it.
In many cases, the best solution involves one spouse retaining the vehicle. They may refinance it to remove the other spouse from the loan or title paperwork. Typically, it is possible to balance out one spouse’s retention of a vehicle without actually withdrawing equity using the vehicle as collateral. Other resources, including a different vehicle or household furnishings, could help offset the equity accrued in the vehicle during the divorce.
The information on the title paperwork and the financial instrument attached to the vehicle influence exactly what steps spouses must take when addressing the vehicle in a divorce. Frequently, the simplest solution involves allowing the spouse currently using the vehicle to continue doing so. The situation could become much more complex if spouses share a vehicle, as doing so after the divorce is likely not a viable option.
Determining how much equity accrued during a marriage can be a good starting point for addressing a high-value asset like a financed vehicle in an upcoming Washington divorce. High-value assets require careful consideration, especially if spouses hope to settle their property division matters amicably rather than relying on a judge to divide their resources.
