Couples facing divorce may find property division a confusing and anxiety provoking part of their divorce case. Also referred to as equitable distribution, property division is the legal division of property rights and liabilities between spouses during divorce.
Virginia is an equitable distribution state. The goal of the state’s property division system is to divide a divorcing couple’s marital assets equitably (fairly) and give proper consideration to both spouse’s contributions to the marriage and the acquisition of their property.
Virginia’s marital property division is founded on the principle of equitable distribution. This means the court will determine a spouse’s fair share of the property and debts accrued during the marriage. Marital property is to be equitably divided.
In resolving how to divide property, the judge will consider:
- the duration of the marriage
- the financial and nonfinancial contributions of each spouse to the marriage
- the income or earning capacity of each spouse
- the value of all property from a professional practice to an art collection
Running close behind spousal support and child custody, marital property division is one of the most challenging aspects of a divorce. Since divorce indicates the dissolution of a marriage that had been recognized by the state, legal issues may arise as both spouses go through the divorce process.
How spouses can divide their property equitably
Spouses may enter into an agreement regarding the division of their property through a written document called a “property settlement,” which is generally drafted by attorneys.
Although you can try to draft a separation agreement yourself, it is not normally encouraged, particularly if your case involves complicated financial issues. An experienced divorce lawyer knows how to draft this agreement, what particular provisions to include, and can make sure that your rights are preserved in court.
If you and your spouse can’t reach an agreement or have some disputes regarding certain items of property, then you will have to take the matter to court where a judge will decide for you.
What is considered marital property?
Any property acquired or earned by either spouse after their marriage date and before their separation are presumed marital property by the court. All property accumulated during the marriage using marital funds is also classified as marital, no matter which spouse earned the income or in what name the property is titled or deeded.
These include for example:
- real estate
- vacation homes
- art collections
- investment property
- stocks and bonds
- retirement funds
- mutual fund shares
- overseas investments
In a divorce, the division of property involves which property belongs to the marriage (marital property) and which belong to each spouse (separate property). As a rule, marital property are those assets acquired or received during the marriage. Separate assets that have been shared with the spouse or used for the benefit of the marriage may also be regarded as marital property.
What is separate property?
In Virginia, any property earned or acquired individually before the marriage is called a separate property. If the property was owned by that spouse before the marriage, received as an inheritance or gift during the marriage, or purchased with the earnings derived from other separate property, then it is likely considered separate property and will not be taken into account during property division.
Business ownership may or may not be separate property, even if the business was created prior to the marriage. If most of its value was owed to its concept, then the business is more likely to be separate property. On the other hand, if the business’s value is owed to the time and personal effort put by a spouse into the business after marriage, then the income derived out of that work is less likely to be regarded as separate and is more likely marital property.
Pensions as marital property
Pensions can be considered marital property if they were earned during the marriage and prior to separation. It can be very difficult to value pensions in a divorce. Many divorcing couples will have to consult a pension evaluator or a CPA along with a family law attorney for help.
Can debts be considered marital property as well?
Debts incurred during marriage are also considered marital property and are divided in divorce. A Virginia court must comply with state divorce laws in dividing the couple’s outstanding debt.
Dividing the property
The most common types of property divided during the divorce process include:
- real estate which includes the marital residence, rental properties, as well as other property consisting of houses and land
- valuable assets like cars, electronics, jewelry, and art collectibles
- intangible property like income, savings, investment profits, and even debts if there are any
- business interests
- retirement assets and pension benefits
If the division of a particular property is not possible, the court may order one spouse to pay the other a monetary award, instead of the property. The monetary award must have the same value as the property in question.
Courts will also take into account any waste of marital assets. A spouse who destroys, transfers, or hides marital property can be penalized for dissipation or waste of assets. In this case, the court may grant the non-guilty spouse a bigger share of the marital property to make up for the loss of assets.
Consult a Virginia family law and divorce lawyer
Do you need help regarding the division of marital property in a Virginia divorce? We at Holcomb Law, are experienced in dealing with complex legal issues that involve the equitable distribution process.
We can schedule a “No Hassle Legal Strategy Meeting” (No Sales Pitch) where we will answer all your legal questions and let you know your options.
Contact us today at (757) 656-1000 or through email us at firstname.lastname@example.org for a free consultation to learn more about how we can defend your financial rights.