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How much does “sweat equity” matter in a divorce?

On Behalf of | Jun 13, 2024 | Divorce, Marital Property Division

When people think about their contributions to their household during marriage, they probably think first about the funds they brought in. However, their contributions often go farther than that. The work they put into the household can be just as important as their income.

Unfortunately, couples may lose track of these important contributions during the divorce process, and that could leave one spouse with less than their fair share of the couple’s property. What should you know about these non-financial contributions?

What is “sweat equity”?

“Sweat equity” refers to the non-financial contributions one spouse makes that increases the value of marital assets. This concept often comes up in the context of home improvements or businesses that one spouse may have contributed to without direct financial investment. This can include physical labor, intellectual input or emotional support.

How does one spouse’s unpaid work factor into property division?

In Washington, spouses jointly-own the property that a couple acquires during their marriage. While it may seem that this would exclude a business or home that one spouse owned before the marriage, that is not necessarily the case. If one spouse’s efforts have led to an increase in the value of assets like their home or business, the court could divide that increase in value in divorce.

For example, even if one spouse did not put their own money into the other’s business, they may still have contributed to its success. In those situations, they would have a claim on some of its value in divorce.

The concept of “sweat equity” also extends to committed intimate relationships (CIRs) in Washington state. Washington courts recognize that partners in a CIR may acquire property together, and they have similar rights to married couples when the relationship ends.

How do the courts consider these indirect contributions?

When determining the impact of “sweat equity” on asset division, Washington courts may consider several factors, including:

  • The duration of the marriage or committed intimate relationship
  • The nature and extent of the contributions made by each partner
  • The direct and indirect contributions to the career or earning potential of the other spouse
  • The increase in value of the marital or jointly-owned assets due to these contributions

When thinking about getting a divorce, it is important for people to keep track of what they have added to the relationship, even if it is not about money. Keeping records of things like time spent taking care of the home or helping the other person’s career can be important. This helps make sure that they receive their fair share. It is also a good idea for anyone considering divorce to talk to a lawyer. A family law attorney can explain how the work you have put into the relationship, often called “sweat equity,” can affect what happens in your divorce.

Understanding the role of sweat equity is not just about recognizing your efforts. Identifying these non-monetary contributions ensures can protect your interests and ensure a fair outcome during property division.