large purchases during divorce

How Major Purchases Can Hurt Your Divorce

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Divorce can be intricate and tricky. Especially in regard to the division of property. Different states handle this part of the process in different manners.

Can You Make Large Purchases During A Divorce?

When it comes to breaking up assets, Washington, for example, is a community property state. Resources, or debts, are split equitably between both parties.

As this is the situation, you may want to hold off making any big purchases until your divorce is finalized. They can have a substantial impact on your case.

Community Property, Major Purchases, And Divorce

Community property is a fairly straightforward concept. In this mode, all assets acquired during a marriage, even things that may be held in one individual’s name, are considered the property of both spouses.

In the case of divorce, this means that it can all be divided in an equitable fashion between both of you.

This doesn’t mean an even split. Instead, the division will be handled so each party comes out on relatively even footing.

Spouses can work with each other, with mediators, or with the court, to come to an agreement on how to divvy up the shared assets in a way that is fair and balanced.

Related Reading: Dividing Debt In Washington State

If You Make A Purchase During Divorce

Divorce comes with a number of expenses. This includes attorney’s fees, court costs, changes in tax status, and more. There are, however, other expenditures that may play a part.

If you make a big purchase while your divorce is pending, in some circumstances, under community property statutes, this may be included when it comes to the division of property.

There are factors that will come into play in this ruling, like financing, where the funds to make the purchase originated, and what you actually bought.

Depending on what you buy, it may even look bad for you in the eyes of the court. For instance, if you’re fighting about things like child support or spousal support, claiming you can’t afford to make payments, buying expensive items raises questions.

Can You Buy A Car During Divorce?

Maybe you need a new car to shuttle the kids around or maybe your commute is longer and need a vehicle with better gas miliage. It’s one thing if you upgrade to a safer, more reliable car in which to transport your children, but If you run out and drop a bunch of money on an unnecessary car, however, you’ll have some explaining to do.

Related Reading: No-Fault Divorce: What It Means For You

If Your Spouse Makes A Purchase During Divorce

Just as any big purchases you make may impact your divorce proceedings, so, too, can those made by your spouse. If your soon-to-be ex-wife claims that she needs spousal support, but buys an unnecessary or impractical new car, or something of that ilk, it may reflect poorly.

If you’re worried about your spouse spending communal money on big-ticket items, it may be possible to prevent this. In some cases, you can convince the court to implement a temporary financial restraining order.

While this measure still allows for the purchase of normal, regular necessities, when it comes to more substantial expenditures made from shared funds, it requires the approval of both parties.

Related Reading: Rebuilding Finances After Divorce

The Impact Of Purchases Made During Divorce

The fact that Washington is a community property state may impact how the court views purchases made during the divorce. Where the money spent came from may also color how they look at and classify purchases.

If you or your spouse use shared funds to pay for an item, it will likely be looked at as a community asset and may be taken into account when the court rules on the distribution of property.

What this usually means is that, if your spouse spends a significant sum on material goods, you will likely be given a larger portion of the remaining assets in order to offset the new acquisition.

The opposite may be true if you are the one spending money in this fashion.

While this is the case if a purchase is made with joint funds, if separate assets are used, the item may be approached in a different manner. For example, if your spouse used premarital reserves, it will most likely be looked at as independent property.

Along the same lines, each spouse’s income may be considered an individual resource. Any purchases made with that money will likely also be looked at as autonomous.

In Washington, however, the court does have the power and authority to use such separate property and may divide it between spouses to achieve a more equitable end result.

Financing Purchases During Divorce

Most major purchases are financed. While it may look like your spouse is spending recklessly during your divorce, that may not be the case. Whether or not any such purchases may be included in the division of property can vary a great deal on a case by case basis.

If a down payment came from joint funds, the court may consider this when it comes to splitting up assets. It may be viewed as pre-divorce property and treated as such.

On the other hand, if that same down payment came from an individual source, the court may very well opt to ignore this and award the item in question, and any future payments, to the purchaser.

It’s also worth noting that divorce does not change any loans or contracts you and your spouse entered into while married.

If you bought a car or house, have regular payments, and both of your names are on the financial documents, the terms still apply equally to both of you. Just because you split up doesn’t automatically alter any preexisting deals.

In the division of property, one party may be ordered to take care of a particular payment. Your name, however, will remain on the record. If any payments are missed, it can negatively impact you and your credit score.

In situations like this, if your spouse is awarded a house, car, or another high-value item you’re still paying off, your best bet is to have your ex refinance and remove your name.

This can even be written into the final divorce agreement, that your spouse needs to rework a particular loan by a specific date. It is definitely worth being aware of as this is an issue that can have a sizeable impact on your finances.

Related Reading: Who Pays for College After Divorce?

Understand the Impact

While it will likely be necessary to make some significant purchases during your divorce, understanding how they may influence the process is important.

Remember, if you buy something during your divorce, in Washington, there is the possibility of losing it in the distribution of property.

There are ways to ensure that such purchases cause as little havoc as possible. It’s simple, really. Stay away from impulse buys, think spending through in a calm, logical manner, and stick to necessities. If you absolutely must buy a big-ticket item with community funds while your divorce is pending, talk to your attorney or work out a deal with your spouse.

Related Reading: Rebuild Finances and Protecting Your Credit Score During Divorce

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