In the Matter of the Marriage of: Kelley L. Olson & Ronald J. Olson, 37500-5

Background

Ronald and Kelley Olson separated after ~32-year marriage; marital estate ≈ $2 million, including nine rental properties.
Kelley received $164,378.11 in inheritances (2011–2014) and deposited them into a joint Spokane Firefighters Credit Union (SFCU) savings account that also received community funds and was used for purchases.
Trial court ordered forensic accountant Scott Martin to analyze whether Kelley’s inherited funds could be traced into down payments for four rental properties; Martin concluded 50% of the inheritance ($82,189.05) was traceable.
The trial court found by clear and convincing evidence that Kelley had a separate property interest of $82,189.05 and ordered Ronald to pay an equalization totaling $264,562.45 (combining $82,189.05 reimbursement and $182,373.40 marital equalization).
Ronald appealed, challenging the tracing/forensic methodology and the calculations; the Court of Appeals affirmed the tracing finding but held the separate-property reimbursement doubled Ronald’s liability and remanded to reduce the reimbursement by half (to about $41,900) and to correct the net-asset finding, adjusting the total equalization to $223,467.93.
The court noted the parties failed to include accountant Exhibit 75 in the appellate record and held that uncertainty against Ronald in reviewing the tracing conclusion.

Issues

Issue	Plaintiff's Argument (Kelley)	Defendant's Argument (Ronald)	Held
Whether Kelley’s inherited funds deposited in the joint SFCU account were traceable into down payments for rental properties	Funds were deposited in an infrequently used joint account to be traceable; accountant showed "but for" the inheritance the down payments could not have been made	Commingling and "other deposits" (community funds and recycled proceeds) made tracing impossible; accountant merely allocated rather than traced	Affirmed: clear-and-convincing evidence supports a traceable separate-property interest of $82,189.05 for four rentals based on accountant’s tracing analysis and account activity evidence
Whether the accountant’s method was adequate (tracing vs. mere allocation)	Accountant performed tracing and conservatively allocated when precise apportionment was impossible	Accountant’s 50% figure was an improper allocation, not tracing	Held that Martin relied primarily on tracing (showing account balances insufficient absent inheritance) and then conservatively defaulted to 50%; method adequate under the record
Whether the trial court miscalculated the marital estate equalization payment	Trial court’s equalization figure is correct; any arithmetic errors do not change the payment	Trial court misstated Ronald’s net estate and thus miscalculated equalization	Court found the trial misstated Ronald’s net estate but the marital equalization computation itself was correct; directed correction of the net-asset finding (no substantive change to equalization besides rounding)
Whether awarding $82,189.05 reimbursement in addition to equalization double-counted Kelley’s separate interest	Reimbursement justified based on traceable separate investment and equities	Reimbursement doubled Ronald’s obligation because half of the separate property was already allocated through the 50/50 division; thus only half the reimbursement is due	Court agreed with Ronald: because community division already gave Kelley half of the traceable separate funds, the reimbursement should be reduced by half (to ~ $41,900); remanded to correct net-value finding and reduce total equalization to $223,467.93

Key Cases Cited

In re Marriage of Chumbley, 150 Wn.2d 1 (Wash. 2003) (separate property remains separate if traceable; characterization at acquisition controls)
In re Marriage of Schwarz, 192 Wn. App. 180 (Wash. Ct. App. 2016) (clear-and-convincing standard for separate-property tracing explained)
In re Marriage of Pearson-Maines, 70 Wn. App. 860 (Wash. Ct. App. 1993) (character of property determined at acquisition)
In re Marriage of White, 105 Wn. App. 545 (Wash. Ct. App. 2001) (assets acquired with traceable proceeds of separate property are separate)
Blood v. Blood, 69 Wn.2d 680 (Wash. 1966) (court must consider correct character of property before dividing)
Pollock v. Pollock, 7 Wn. App. 394 (Wash. Ct. App. 1972) (separate funds used during marriage should be traced with particularity)
Berol v. Berol, 37 Wn.2d 380 (Wash. 1950) (tracing requirement for separate funds invested in marital assets)
Fahndrich v. Williams, 147 Wn. App. 302 (Wash. Ct. App. 2008) (appellant bears burden to provide an adequate record on appeal)