Equitable Distribution in Virginia Divorces

The consequences of divorce can have an affect on your financial position. Equitable Distribution in Virginia is intended to make the division of property fair for both parties in a divorce.

What is Equitable Distribution in Virginia?

Equitable distribution in Virginia involves a fair division of property and debt between divorcing couples. Under Virginia law, marriage is considered an economic partnership. When that partnership ends, the financial consequences can be severe.

One of the most difficult and time consuming portions of any divorce is property division. Property division is the process where you and your spouse divide up all property, assets, and debt before the completion of divorce.

Parties enter marriage with property and debts, and often accrue more property and debts as the marriage progresses. Courts strongly prefer that property and debt be divided equitably.

Equitable distribution in Virginia divorce involves a process where marital property is divided fairly through careful classification and valuation.

Because courts prefer that there be an equitable distribution in Virginia divorces, the Virginia state legislature has become one of forty states to adopt equitable distribution laws. Ultimately, equitable distribution in Virginia allows the financial consequences of divorce to become less severe by ensuring a fair division of property and debt.

What are Property and Debts for an Equitable Distribution in Virginia?

Property is an interest in real or personal property, including income and earnings. [1] Property includes all financial assets, income, and real tangible property. [2] Common examples of property include your marital home, cars, stocks and bonds, retirement plans, and life insurance polices.

Mortgages and other loans obtained during your marriage are taken into consideration in order to create an equitable distribution in Virginia. Debts incurred before you enter into marriage are also taken into consideration.

Common examples of debts incurred before marriage include any student loans or credit card debt you may have incurred.

A Note on Equitable Distribution

It is important to note that “equitable distribution” does not mean “equal distribution”. Equal distribution means to divide everything exactly down the middle. Equitable distribution means to divide everything according to what is just and fair.

Under equitable distribution, judges decide fairness based on each spouses ability to support themselves after divorce, who may have been at fault in the failed marriage, and whether one spouse sacrificed or contributed more than the other during the marriage.

Thus, a 75 / 25% division of marital property, while unequal, could be considered equitable and fair under Virginia law.

How is Property Valued?

In order to fairly divide marital property to create an equitable distribution in Virginia, all property and debt must be accurately valued. While valuing all of you and your spouse’s property can be expensive and time consuming, knowing the accurate values of all property is absolutely crucial to creating an equitable distribution in Virginia.

There are several ways that courts will value your different types of property:

Home and Real Estate

If you and your spouse own a home or real estate then you will likely need to hire an appraiser to value your property.

Income

Income can usually be derived from viewing both you and your spouse’s income tax returns.

Vehicles

Vehicles can be valued by determining their current market value. This can be easily obtained by looking on the internet to determine what the current make and model of your vehicle is selling for.

Financial Assets

Financial assets include stocks, bonds, mutual funds, etc. Because of there volatility, financial assets can be more difficult to value. Accurately valuing financial assets may require you to hire an accountant or financial analyst.

How is Property classified for an Equitable Distribution in Virginia?

In order to create a fair and equitable distribution in Virginia divorces, property and debts must be accurately classified. Classifying property to create an equitable distribution can be complicated.

When creating an equitable distribution in Virginia, there are generally three types of property classifications: separate property, marital property, and hybrid marital property.

Separate Property

Separate property is all property, real and personal, acquired by either party before the marriage. [3] Separate property can also be acquired by a party during marriage. [4]

Any property given to you as a gift by someone other than your spouse is classified as separate property. [5] Inherited property from someone other than your spouse is also classified as separate property. [6]

Finally, separate property includes income that you obtain from the increase in value of your separate property. [7] This can include increases in the value of any real estate you separately own.

This also includes any capital gains you accrue from financial assets such as stocks, bonds, or mutual funds, so long as the property is separate.

Marital Property

When creating an equitable distribution in Virginia divorces, all property jointly owned by both spouses is considered marital property. Marital property is all property titled in the names of both parties.[8] Even though property may be titled to only one spouse, it could still be marital property if it was obtained using marital property or income.

Because marital property is jointly owned, it is equitably distributed between the divorcing parties. Common examples of marital property include the family home, the family car, and any jointly owned retirement accounts.

It is important to remember that marital property includes all jointly owned tangible items, regardless of the titled owner. [9]

So any gifts that were given to both you and your spouse, such as wedding gifts, are classified as marital property. [10] All gifts given from one spouse to the other spouse are also considered marital property. [11]

In some instances, separate property can become marital property. If you and your spouse take separate property and re-title it so it is now jointly owned, then the court will consider this marital property. [12] For example if you owned a car before your marriage and had your spouse’s name later placed on the title, then the car would become marital property.

Hybrid Marital Property

For the purposes of an equitable distribution in Virginia, the final classification is hybrid marital property. This classification is where the property is part marital property and part separate property. [13] Hybrid marital property is very complex and often is determined by the discretion of the court.

The crucial element of this property classification is personal effort. Personal effort is any form of labor, effort, inventiveness, physical or intellectual skill, creativity, managerial, promotional, or marketing activity applied directly to the separate property of either party by the other spouse. [14]

Hybrid marital property often begins separate property, but through the personal efforts of the other spouse becomes hybrid marital property. [15] In other words, hybrid marital property occurs if one spouse puts personal effort into increasing the value of the other spouse’s separate property.

If this occurs, then the other spouse would have a claim to part or all of this property in the event of divorce. However, this is often difficult to prove in court. To prove this in court, the spouse must show that their spouse’s separate property increased in value because of their personal efforts. [16]

The other common way separate property becomes hybrid marital property is when the property is commingled with marital property. [17] This occurs by contributing one category of property to another, resulting in the loss of identity of the contributed property. [18]

In event that the hybrid marital property that was commingled cannot be separated or retraced to separate property to the court’s satisfaction the property will remain hybrid property giving both spouses a claim to it. [19]

Ultimately, classifying hybrid marital property can be very confusing. Having an experienced family law attorney is recommended in order to ensure an equitable distribution in Virginia.

Are the Classifications of Debt the Same as Property?

When creating an equitable distribution in Virginia, the classification of debt is very similar to the classification of property.

Separate Debt

Separate debt includes all debt incurred by either party before marriage. [20] Common examples of this include student loans and credit card debt. All debt incurred after the separation of both parties are also classified as separate debt.

In rare instances if a party can prove that the separate debt occurred before the marriage or after the separation was accrued for benefit of the marriage or family the court in its discretion can classify it as marital debt. [21]

Marital Debt

Marital Debt includes all debt incurred in the joint names of the parties during marriage. [22] Common examples include mortgage payments for a jointly owned home.

In some instances if a party can show that a debt was incurred during the marriage but for the benefit of only one of the parties and was not used for a marital purpose the court could classify this debt as separate debt.

What Factors does the Court Consider when Deciding if the Distribution is Equitable?

Once all property is properly classified and accurately valued, the property must be fairly divided. The court generally considers eleven factors when determining if a distribution is equitable:

  1. The contributions, monetary and non-monetary, of each party to the well-being of the family;
  1. The contributions, monetary and non-monetary, of each party in the acquisition and care and maintenance of such marital property of the parties;
  1. The duration of the marriage;
  1. The ages and physical and mental condition of the parties;
  1. The circumstances and factors which contributed to the dissolution of the marriage, specifically including any ground for divorce under the provisions of subdivision A (1), (3) or (6) of § 20-91 or § 20-95;
  1. How and when specific items of such marital property were acquired;
  1. The debts and liabilities of each spouse, the basis for such debts and liabilities, and the property which may serve as security for such debts and liabilities;
  1. The liquid or non-liquid character of all marital property;
  1. The tax consequences to each party;
  1. The use or expenditure of marital property by either of the parties for a non-marital separate purpose or the dissipation of such funds, when such was done in anticipation of divorce or separation or after the last separation of the parties; and
  1. Such other factors as the court deems necessary or appropriate to consider in order to arrive at a fair and equitable monetary award. [23]

These factors provide the court some statutory guidance to determine how marital property should be divided to create an equitable distribution in Virginia. Once the court has applied these factors, the court will divide the property and debts among both spouses.

Are there any ways to avoid an Equitable Distribution in Virginia?

Unfortunately, there are no ways to avoid an equitable distribution in Virginia. Courts in Virginia want to ensure that the division of property is equitable for both parties.

However, there are ways to make the distribution of property more efficient for the divorce process. If you and your spouse are able to create a property settlement agreement that fairly divides property between both parties then you can likely avoid some court intervention.

If you are engaged and are not yet married you can solve several property division issues by drafting a prenuptial agreement. A prenuptial agreement allows spouses to classify current and future property before getting married. This could save you and your future spouse thousands of dollars in court costs and legal fees in the event of divorce.

Conclusion

Because marriage is an economic partnership, the financial consequences of divorce can be severe. This makes dividing up spousal property and debt emotional and time consuming. Equitable distribution in Virginia has allowed the financial consequences of divorce to become less severe by ensuring a fair division of property.

To ensure an equitable distribution, accurate valuation and classification of your property during the divorce process is crucial. Hiring an experienced and competent attorney is recommended to ensure a fair and equitable distribution in Virginia divorce. Ultimately, having an experienced attorney by your side can best serve to protect the things most important to you.


[1] Va. Code § 20-148

[2] Id.

[3] Va. Code § 20-107.3

[4] Id.

[5] Id.

[6] Id.

[7] Id.

[8] Id.

[9] Id.

[10] Id.

[11] Id.

[12] Id.

[13] Id.

[14] Id.

[15] Id.

[16] Id.

[17] Id.

[18] Id.

[19] Id.

[20] Id.

[21]  Id.

[22] Id.

[23] Id.

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