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When you get divorced, you aren’t just ending your emotional and romantic partnership with another person. You are also untangling your financial lives. This means dividing up your assets and debts as part of your divorce.
In Virginia, marital property is divided between spouses based on the principle of equitable distribution. This does not necessarily mean that property will be divided equally, but that it will be divided fairly based on several factors outlined by Virginia law. Working with a Virginia Beach divorce lawyer can help you protect your financial interests and get the best possible outcome for your divorce.
At Poole, Brooke, Plumlee, we represent clients in a range of Virginia family law matters, including divorce and property division. We offer strategic legal representation, working hard to help our clients make informed decisions about when to negotiate and when to litigate. Reach out to our law firm today to schedule a consultation with a Virginia family law attorney.
Understanding Equitable Distribution Laws for a Virginia Divorce
When you get divorced in Virginia, one of the issues that must be decided is how your assets and debts will be divided. Unless you don’t own or owe anything together, this is a standard part of most divorce cases. You can either come to an agreement with your soon-to-be ex about property division or allow a court to decide based on specific factors outlined in Virginia law.
Your assets and debts are not automatically divided down the middle in a Virginia divorce. Instead, Virginia law uses the principle of equitable distribution. With equitable distribution, the focus is on a fair division of property, which does not always mean an equal split.
In a divorce, only marital property is subject to division. The first step in equitable distribution is determining how each asset and debt will be classified. Depending on the facts and circumstances, property can be considered marital, separate, or hybrid.
Once all assets and debts are categorized, marital property is assigned a value as of the date of the negotiation, separation, or trial (depending on the facts of the case). Sometimes, this process is relatively straightforward, such as having a real estate expert determine the fair market value for the family home. In other situations, such as a high-asset divorce, valuing more complex assets like business interests can be challenging.
After marital property has been identified and valued, it will be divided between the spouses in a way that is considered fair. The spouses can negotiate this property division themselves or through a neutral third-party mediator. If the parties can’t come to an agreement, then the case may go to trial where a judge will decide how the property can be divided fairly.
If you are contemplating divorce, it’s important to understand how this process works. This includes learning about separate versus marital property and what factors judges consider when deciding how to divide property. This can help you make a more informed decision when it comes to negotiating an agreement or deciding to go to trial.
What Is Separate Property?
In a Virginia divorce, separate property is owned by one spouse. It is not subject to equitable distribution in a divorce. Instead, it stays with the individual owner until it loses its separate status.
There are several different types of assets that are considered separate property in Virginia. This includes:
- Pre-marital Assets: Property, money, or debt acquired before a couple got married.
- Inheritances: Money or property inherited by one spouse by will or inheritance during the marriage.
- Third-Party Gifts: Gifts given specifically to one spouse by someone other than their partner during the marriage.
- Post-Separation Property: Assets acquired by either spouse after the final date of separation.
- Personal Injury Awards: Specifically, compensation for one spouse’s personal pain and suffering is separate property.
Importantly, separate property can sometimes become marital property. This can happen in a few different ways, such as:
- Commingling: Depositing separate funds into a joint bank account or mixing separate assets with joint assets in a manner where they cannot be traced can transform separate property into marital property.
- Titling in Both Names: Changing the title of a separate asset, such as a car or a house, to include both spouses may convert it to marital property.
- Contributions of Labor or Money: If marital funds or a spouse’s labor increase the value of separate property, the added value or part of the asset may become a “hybrid” property. This means that it is part separate property and part marital property.
For example, if one spouse inherits a property from a relative, it could become marital property if that spouse changes the title of the property so that the couple jointly owns it. If the spouses work together and both contribute money towards fixing up the inherited house to use as a rental property, then the increase in value of the home could be considered hybrid property. A Virginia divorce lawyer can help you understand which assets and debts may be considered separate property in your divorce.
What Is Marital Property?
By contrast, marital property generally includes jointly titled property and assets and debts acquired from the date of marriage until the date of separation (regardless of whose name is on the title), that are not classified as separate property. Only marital property is subject to equitable distribution during a divorce.
Marital property may include:
- Income and Earnings: Salaries, wages, and bonuses earned by either spouse during the marriage.
- Real Estate and Vehicles: The family home, additional properties, cars, boats, or other vehicles bought during the marriage, even if the asset is only titled under one spouse’s name.
- Financial Accounts: Joint or individual bank accounts, stocks, mutual funds, and investment portfolios funded during the marriage.
- Whole Life Insurance: The cash value of the policy accrued during the marriage.
- Retirement Benefits: Pensions, 401(k)s, and IRAs accrued during the marriage.
- Businesses – the value of business interests deemed marital.
- Marital Debt: Credit card balances, loans, or mortgages incurred by either spouse for the family or shared purposes during the marriage.
In other words, any property that isn’t specifically deemed separate will be considered marital property. It will then be subject to equitable distribution during a divorce.
What Factors Are Considered When Dividing Property
Once a court has determined the marital value of property, it will consider a range of factors when deciding on equitable distribution. This may include:
- The length of the marriage
- The age and physical and emotional condition of each spouse
- The monetary and nonmonetary contributions of each spouse to the well-being of the family
- The monetary and nonmonetary contributions of each party in the acquisition, care, and maintenance of the marital property
- The circumstances and factors that contributed to the dissolution of the marriage
- The liquidity (or nonliquidity) of the marital property
- The tax consequences of the proposed distribution
A fair result does not always mean a 50/50 split. For example, if one spouse intentionally reduces the value of marital property in anticipation of divorce to prevent the other spouse from receiving a fair share, the court may choose to award a greater share to the spouse negatively affected.
How to Protect Yourself Financially in a Virginia Divorce
Divorce can be expensive. In addition to establishing separate households, dividing up your assets can still take a financial toll. There are a few things that you can do to protect yourself if you are considering a divorce.
First, you should thoroughly document all of your assets and debts. If you own separate property, being able to document that it predates the marriage or that it was acquired through gift or inheritance can be incredibly important. This will take the property outside of equitable distribution, which can help to protect you financially.
Second, consider negotiation and mediation rather than going straight to court. It is often far less expensive to negotiate your own agreement compared to going to trial. It also allows you to craft agreements with your spouse that make sense for you and your unique situation, rather than allowing a judge to make decisions for you.
Third, hire an experienced Virginia divorce lawyer to represent you. Even if you plan to negotiate a settlement, it is a good idea to have legal representation so that you understand your rights and the ways that various laws impact your settlement. For example, there are tax consequences associated with property division, which you may not understand fully without advice from a tax attorney.
A lawyer can also give you advice on how the law applies to the facts of your case and the likely outcome if you choose to go to trial. This can help you make more strategic decisions about how to move forward. For example, your Virginia divorce attorney can advise you on whether settlement terms are reasonable and if you are likely to get a better or worse result going to trial based on their experience.
Reach Out to an Experienced Virginia Divorce Lawyer Today
Divorce is rarely easy for either spouse. When you are worried about your financial future, splitting up can be even more challenging. Understanding Virginia’s equitable distribution laws can help you feel more confident as you move forward with your case.
Poole, Brooke, Plumlee represents individuals in all types of Virginia family law matters, including divorce. We work with our clients to help them achieve the best possible outcome, whether that means going to trial or working out a settlement with their soon-to-be ex. To learn more or to schedule a consultation with a Virginia Beach family law attorney, give our law offices a call at 757-499-1841or fill out our online contact form.
