A Washington couple with seven children placed a $500,000 house in a trust before divorcing; the wife received a $735,000 Sequim home, and an October 27 court upheld the decision not to require refinancing

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A divorce involving a Washington couple with seven children has highlighted how courts can divide family property and mortgage obligations without requiring a spouse to refinance a home. The Washington Court of Appeals, Division Two, ruled on October 27, 2026, that a lower court acted within its discretion when it awarded the family’s Sequim home to Megan Mae Coelho and assigned the remaining mortgage debt to her without requiring her to refinance the loan or sell the property within a specified period. According to the unpublished opinion available on Justia, her former husband, Benjamin A Mavy, challenged the arrangement, arguing that he remained financially exposed to a mortgage on a home he no longer owned.

Couple transferred property into a trust before divorce

Mavy and Coelho married in 2002 and had seven children during their marriage. Before moving to Washington, the family lived in Wyoming, where the couple received $1,518,103 in September 2021 for their interest in a business in which Mavy had been involved. In November 2021, the couple established an irrevocable trust under Wyoming law for asset protection and estate planning. They transferred personal property valued at $125,000 and an additional $250,000 into the trust. Their Wyoming home, valued at approximately $500,000, was also held in the trust, with their children named as beneficiaries.Mavy served as the trust adviser and retained substantial control over the trust’s assets, including the ability to determine whether the property could be used by either spouse. The couple subsequently moved to Washington and purchased a home in Sequim. Mavy filed for divorce in November 2022. The division of property became one of several disputed issues during the proceedings.

Divorce court awarded the Sequim home to the wife

Following a trial in August 2024, the lower court issued findings on the couple’s property, debts and parenting arrangements. It awarded the Sequim home to Coelho and assigned the debt secured by the property to her. The final divorce order, entered on December 12, 2024, recorded approximately $300,000 in equity in the Sequim property and an outstanding mortgage balance of $428,572. The court did not require Coelho to refinance the loan or sell the home within a specified period.The order also gave Mavy access to the mortgage account for as long as his name remained on the loan, allowing him to monitor whether payments were being made on time. In addition, it required Coelho to hold him harmless if her failure to pay an assigned debt resulted in a creditor pursuing him for payment. The court ordered Coelho to pay Mavy a further $50,000. It also divided the couple’s community interests in four businesses equally, with each receiving half of the shares or units classified as community property. The lower court concluded that the overall division of property and debts was just and equitable. It separately determined that it lacked jurisdiction to divide the Wyoming real estate held by the trust.

Husband challenged the mortgage arrangement

Mavy appealed the property division, arguing that awarding Coelho the Sequim home without requiring her to refinance left him exposed to a debt from which he no longer benefited. He disputed the lower court’s assessment that the arrangement presented “little to no risk” to him. His argument focused on the possibility that he could remain liable to the mortgage lender even though Coelho had received the property and was responsible for its payments under the divorce order.The lower court had based its assessment on the equity in the Sequim home, Mavy’s ability to monitor timely mortgage payments and the provision requiring Coelho to protect him against collection arising from debts assigned to her. Mavy also challenged other aspects of the divorce proceedings, including the property division’s finality and the denial of his request to hold Coelho in contempt. His challenges to the original parenting plan and relocation order were rendered moot after the trial court entered a new parenting plan in May 2026 and a new relocation order in July 2026.

Appeals court upheld the lower court’s decision

The Court of Appeals concluded that Mavy had not demonstrated that the evidence failed to support the lower court’s findings. It upheld the property division and the denial of his contempt motion, while ruling that his challenges to the earlier parenting plan and relocation order were moot. The appeals court emphasised the broad discretion trial courts have when distributing property during a divorce. Washington law requires a just and equitable division, but that does not necessarily mean an equal division or require a particular method of handling mortgage debt.The court therefore affirmed the challenged decisions, including the award of the Sequim home to Coelho without a refinancing deadline. The ruling did not remove Mavy from the mortgage; rather, it upheld the divorce court’s decision not to make refinancing a condition of Coelho receiving the property. The October 27 opinion illustrates the distinction between assigning responsibility for a mortgage between divorcing spouses and requiring a lender to release a borrower from the loan. The court upheld the specific arrangement in this case, based on the evidence and protections included in the divorce order.