Divorcing couples in Virginia frequently clash over dividing marital assets and debts. If the couple cannot agree on the matter between themselves, a Virginia court judge will decide it for them.
The division of assets and debts during divorce is costly and time-consuming. For these reasons, many couples sort out their issues through agreement. Most couples, however, fail to recognize which assets or debts fall under marital property and are subject to division. In so doing, a spouse may lose their rights to high-value property which might have gone to them.
Classifying property in a Virginia divorce
When Virginia couples divorce, all their assets are identified, valuated, and equitably distributed between them. These can include their businesses, vehicles, real estate, bank accounts, and debts. To determine how property is divided, it must first be classified.
Three types of property are recognized in a Virginia divorce:
- Separate propertySeparate property is any property which was acquired before the marriage. It also includes all assets received as a gift or inheritance during the marriage from somebody other than the spouse. As an example, money given by a relative and kept in a separate bank account is considered separate propertyProving that a particular property is separate might be difficult. If you or your spouse have items that fall under separate property, make your attorney aware of them during the divorce proceeding as soon as possible.
- Marital propertyMarital property is any co-owned asset as well as any other property acquired from the date of the marriage until the separation is finalized. Gifts given by one spouse to the other will usually be regarded as marital property.Whether it is great or small, high-priced or inexpensive, any asset that was acquired during the marriage by one or both parties – no matter whose name appears as the owner – is considered to be marital property.
- Hybrid property
A property that is part marital and part separate is classified as a hybrid property in a Virginia divorce. One example is a vacation home purchased during the marriage using a portion of one or both spouses’ pre-marital savings for a down payment. Another is a retirement plan with contributions made both before and after the marriage. Generally, a spouse who seeks to classify a property as a hybrid has to provide proof to back up the claim.
How assets are divided in a Virginia divorce
How the property of divorcing couples in Virginia is divided is based on the system of equitable distribution. This doesn’t mean, however, that assets are always divided precisely down the middle. Equitable distribution means assets are frequently but not always equally divided.
In order to divide assets, the court must classify any disputed property as separate, marital, or hybrid, and determine the property’s value usually with information furnished by the couple. An appraisal of an item’s value is vital in the process of property division. Finding out the right value of the contested property in a divorce provides opportunity for a very equitable distribution of assets.
When all the assets have been valuated, the court will divide it according to a number of factors. These factors include:
- both parties’ financial and non-financial contributions to the family’s welfare and to the acquisition of property
- financial contributions which include property (besides separate property)
- any increase in price or value of a property
- income
- the use of separate funds for the well-being of the marriage
The court considers other factors including:
- when and how the marital property were acquired
- the duration of the couple’s marriage
- each spouse’s age, health, as well as physical and mental condition
- tax consequences
- debts and other financial obligations of each spouse and which property can serve as security
- the most liquid (cash) and least liquid (stock and real estate) items of property
- the circumstances and factors that contributed to the divorce
The court also considers bad behavior. Any bad behavior, whether it was an extramarital affair, domestic violence, or involvement in a crime, will be counted against the erring spouse as the court determines how the property should be divided.
The court may raise a spouse’s share if the other spouse is found to have done something to lower a marital property’s value. For example, if a spouse did a lot of heavy spending or intentionally damaged the family car, they may have to pay for it afterward.
Draft a Property Settlement Agreement
You and your spouse can sign a document called a Property Settlement Agreement which details how you will divide your assets during a divorce. It is, in a way, a divorce plan, but one that will need a court’s final approval.
Most Virginia couples resolve their divorce by executing a Property Settlement Agreement. This settlement is quicker and less expensive than normal divorce proceedings.
It is important to ensure that the Property Settlement Agreement is drafted correctly. Do not sign a PSA, or any other agreement with your spouse, regardless of how short or irrelevant you think it may be, without having your attorney review it first.
Consult an experienced Virginia divorce attorney for property settlement
Property settlement in a Virginia divorce presents many complexities. The lawyers at Holcomb Law, P.C. have the knowledge and resources to represent your interests and protect your financial future when it comes to divorce and asset division.
We have access to appraisers, accountants, and other financial experts to help you provide a fair and precise description of the value of your property to the court. We can schedule a meeting where you get answers to all your questions so you will know your legal options.
Contact Holcomb Law, P.C. today at (757) 656-1000 or through our email to schedule a consultation to learn more about how we can defend your financial rights.