Divorces can be very complicated when a valuable business is part of the community property. The party who keeps the business may be unable to pay their spouse’s share immediately, resulting in long-term property distribution payments and interest.
A Washington appeals court recently addressed these issues in the unpublished case of In Re: Marriage of Cheng. The wife had graduated from Harvard Business School in 2002 but had not really been employed since. The husband had a consulting and distance learning company that the court valued at $3.6 million. The trial court awarded the wife $640,000 in maintenance to be paid over 44 months and a judgment of $1.455 million with 6% interest over 15 years as property distribution. The court also awarded child support greater than the standard calculation. The husband appealed.
The husband argued that the wife was receiving an improper double recovery. Trial courts are to consider “all relevant factors including but not limited to” those listed in RCW 26.09.090(1) when considering how much maintenance should be awarded. The maintenance award must be just, but the trial court otherwise has broad discretion. One of the listed factors is the division of community property. If the maintenance and property award are paid from the same asset in a way that unfairly burdens the spouse that is paying, the maintenance may duplicate the property division.