In re the Marriage of Short,
890 P.2d 12



Procedure:Petitioner husband appealed the decision of the Court of Appeals (Washington), which reversed a portion of the trial court's divorce decree of petitioner and respondent wife, and the appellate court held that certain stock options were entirely community property and that a maintenance award was not to have been made non-modifiable

Facts: Robert Short (P) received stock options from his employer during his marriage to Patricia Short (D). The stock options vested over time. The parties separated on January 18, 1989. P filed for divorce in February 1990. The trial court characterized some of the stock options as community property because they were acquired during the marriage and the majority as separate property because they were acquired after they separated. D appealed. The court of appeals reversed, holding all the stock options were community property. P appeals.


Issue: May unvested employee stock options, granted during the marriage but vested when the parties are "living separate and apart," be characterized as part separate property and part community property, depending upon if they are granted to compensate for past, present, or future services?

Holding: Yes. Judgment affirmed in part, reversed in part, and remanded.
Supreme Court held that: (1) substantial evidence supported determination that majority of options were granted to husband for future employment services; (2) “time rule” was applied only to first stock option to vest after spouses were living separate and apart to determine what portion of it was community property; and (3) nonmodifiable maintenance award provision could not be written into decree of dissolution in absence of separation contract.

Analysis: Community property is easy to divide as the property need only be characterized. Once that characterization is completed the property is divided according to law. Stock options and pension plans have been a bit of a problem as they involve the division of future interests. But for the most part most community states involved have figured out how to make the divisions so not too many appeals are involved. Most characterization issues in community states are affected by presumptions on how the property was acquired. Most all of these presumptions are rebuttable. This state had laws regarding characterization that involved married and living separate and apart.