Last updated on March 19th, 2019
Virginia is one of the many states that encourages divorcing couples to make use of a property settlement agreement. Any time that two people separate or divorce, they will face several practical and pressing issues that they will need to address.
These include dividing up their property, determining who will have custody of their children and be responsible for their support, and determining what, if any, spousal support will be paid.
A Virginia property settlement agreement gives the divorcing parties the opportunity to assess and decide these important questions for themselves.
A Virginia property settlement agreement is a legal contract into which the divorcing parties enter, which resolves and disposes of the many legal issues that will accompany their divorce.
In the absence of a property settlement agreement, the resolution of these important questions will be solely in the hands of the judge. This is not necessarily a terrible thing, but most couples (and their attorneys) prefer the flexibility, autonomy, and certainty that a property settlement can provide.
Requirements for a Valid Property Settlement Agreement
Virginia statutory law recognizes marriage agreements and property settlement agreements as legally binding contracts.
A property settlement agreement will be invalid if the parties were not provided disclosure of each other’s assets and liabilities. There needs to be a provision in the body of the property settlement agreement calling for full disclosure, not just in the recitals at the beginning of the agreement.
There needs to also be a provision that addresses after discovered property (or, property whose existence doesn’t come to light until after the property settlement agreement is executed), calling for action against the party that failed to disclose the property’s existence.
This after-discovered property may be split 60-40 against the non-disclosing spouse, for instance.
In order for a property settlement agreement to be valid the parties should each have had their own attorney. Most courts want each party to be represented by independent legal counsel. Though this is not always required, it is strongly recommended at all levels.
In a property settlement agreement, the spouses may put in more child support than the support guidelines call for, though not less.
There is a fiduciary duty on the part of each party to the other, and parties must not engage in fraud or overreaching.
Authority of Court to Modify a Property Settlement Agreement
Courts cannot modify a Virginia property settlement agreement, if it has been “incorporated but not merged” into the final decree of divorce.
This means that this “incorporated but not merged” language should be used in the document, as it will give the parties the most flexibility, with minimal interference by the supervising court.
Additionally, if the property settlement agreement is incorporated into the final divorce decree, it gives the court contempt power to enforce the property settlement agreement.
Thus, if a spouse violates a term of the agreement, the other spouse may make use of the court’s enforcement powers to coerce compliance with the agreement—something that can be quite advantageous.
Benefits of Using a Property Settlement Agreement
As a general matter, using a property settlement agreement will mean that there is less need for scrutiny by the court of the ins and outs of your final divorce or separation arrangement.
Courts enthusiastically embrace the use of property settlement agreements, as it means less work for them, and the agreements are generally favored by law.
This often means more autonomy and flexibility for the divorcing couple.
One of the most significant benefits of using a property settlement agreement has to do with expediting the divorce process. Having a property settlement agreement in place allows you to decrease the amount of time that you must wait before you can obtain a divorce based upon living separate and apart (a “no-fault” divorce).
Most states now have no-fault divorce statutes as an alternative or addition to traditional fault-based divorces.
Virginia allows for no fault divorces, which now account for almost 80 percent of all divorces. In Virginia, you can obtain a no fault divorce if you have lived “separate and apart” for one year.
However, this separateness requirement is reduced to six months if you and your spouse have entered into a property settlement agreement, and you have no minor children.
In Virginia, parents don’t have to pay for a child’s college once the child reaches the age of majority.
However, this rule can be modified if there’s something in a property settlement agreement binding the parents to do otherwise.
For this reason, a Virginia property settlement agreement can be used to obligate one or both of the spouses to pay, at least to some extent, the college and educational expenses of a child.
Often, a typical property settlement agreement will include a provision calling for binding arbitration as a remedy in the case of a conflict or alleged breach. If one or both of the parties does not comply with some of the provisions, they can be arbitrated.
If parties have contractually agreed to binding arbitration, the decision of the arbitrator will be final, and will not be overturned by a court, except in issues of child custody and support.
Property Settlement Agreements and Equitable Distribution
In Virginia, upon divorce, a couple’s property is divided by using the process of equitable distribution. Through this procedure, all of the couple’s property is classified as either separate or marital property, and the marital property is then apportioned between each spouse, based on notions of fairness and equity.
The factors that are normally used to determine a fair and proper division are laid out in Virginia’s equitable distribution statute.
In the absence of a property settlement agreement, what is a fair and equitable division of the property is decided by the judge. The judge has the discretion, based on the facts and equities of the particular case, to divide the property in whatever way he or she determines is most equitable and just.
However, having a property settlement agreement in place allows the spouses to avoid these issues, and divide up their property themselves. Having a property settlement agreement means that the parties can avoid going through the tedious process of equitable distribution, in which the judge will be making these important decisions for them.
By having a property settlement agreement, the spouses can retain their authority to divide up their property as they wish, and as they see fit.
This is generally beneficial, as the parties to the divorce are in a far better position to understand the intricacies of their own case, and to evaluate how their property should be handled. They are better situated than a judge, who may be only passingly acquainted with their case.
In Virginia, property settlement agreements are an extremely useful way to expedite and streamline a divorce. Divorces are by nature stressful and contentious.
But if the separating spouses can cooperate enough to enter into a property settlement agreement, the stress and conflict can often be considerably reduced, and a measure of predictability and stability given to the process.