Equitable Distribution in Virginia
Virginia is an equitable distribution state, meaning that the court has the authority in any divorce to classify the property of the parties as separate, marital or hybrid, to distribute any jointly owned marital property between the parties, and to grant a monetary award to either party to ensure an “equitable distribution” of marital property and debts.
Under Virginia Code § 20-107.3, the court in a Virginia divorce must consider all property of the parties whether real or personal, tangible or intangible, and determine which is separate property, which is marital property, and which is part separate and part marital property. The court then decides how to allocate the marital property between the parties, applying each of the factors listed in subsection (E) of § 20-107.3. Those factors include, among others: (a) the contributions, monetary and nonmonetary, of each party to the well-being of the family and (b) the contributions, monetary and nonmonetary, of each party in the acquisition and care and maintenance of the marital property of the parties. Applying each of the factors listed in § 20-107.3(E), the court arrives at its “equitable distribution award.” In the vast majority of cases, the court applies these factors and decides upon a 50/50 split of the parties’ marital property, although the court may also decide upon a different distribution (60/40, 55/45, etc.).
Whatever exact division it decides upon, the court may achieve that split by ordering the transfer of real or personal property between the parties, ordering the sale of marital property (with the proceeds distributed between the parties), and/or granting a monetary award from one party to the other.
Importantly, the only property that is subject to equitable distribution is property that is marital and any portion that is part marital. Each party keeps their own separate property and debts.
Generally speaking, the following kinds of property will be classified as separate in Virginia:
- Property acquired before the marriage;
- Property acquired after separation;
- Inherited property or property received as a gift from someone other than your spouse;
- Property purchased during the marriage using money from the sale of separate property;
- Property acquired during the marriage from the exchange of separate property;
- Income received from separate property; and
- Capital gains, or increases in the value of separate property.
There are exceptions to this list. For example, property obtained with marital funds is usually considered marital, even if it is acquired after separation. Therefore, for example, a spouse who opens up a new bank account post-separation, using marital funds, should not expect to keep that account free from equitable distribution.
Property purchased during the marriage from the sale or exchange of separate property will be classified as separate property, but only if it is kept separate. Such property can be “transmuted” to marital property if it is “commingled” with marital property. This effectively imposes a segregation requirement, meaning that to ensure your property will be kept separate upon divorce, you should be careful to not mix it with marital property during the marriage.
Once separate property is commingled, then you will have the burden of proof to show that some portion of the commingled property is directly traceable to the separate property. You must also show that the property was not intended to be given to your spouse as a gift. Even then, you are out of luck if the court cannot determine the exact portion of such commingled property that is separate.
Income received from, or any capital gains on, separate property may be classified as marital to the extent that the income or capital gains are due to the personal efforts of your spouse. In other words, if your spouse has worked to produce income from your separate property or to increase its value, he or she can claim a portion of the income or increase in value as marital property.
One final point to remember is that it is up to the judge in your case to classify your property as separate, marital or hybrid. These classifications are considered “findings of fact,” meaning that if you believe the judge made a mistake, your burden on appeal would be to show that the judge’s decision was plainly wrong or unsupported by the evidence.
The Marital Home
The marital home is often the most valuable property to address in a Virginia divorce. For a general discussion of how to deal with the residence in a divorce, see The Marital Home: The Sticky Wicket in Many Divorces.
One specific question that often arises regarding the marital home is, what happens to the money that you or your spouse used to make a down payment on the marital home, when you divorce? This question becomes particularly interesting when one spouse paid the down payment out of their own separate property. For answers on this important topic, see How Will That Down Payment Be Treated in Your Virginia Divorce?
Marital Waste or Dissipation of Assets
A spouse who misuses or deliberately disposes of marital property to purposefully deprive the other spouse of their share upon divorce has committed “marital waste” or “dissipation of assets.” The court has the authority to consider such behavior in making an equitable distribution award. For more information, see Marital Waste in Virginia Equitable Distribution Cases.
The Presumption Of Marital Debt
Virginia law treats debts much the same as property for purposes of equitable distribution. Marital debts are included in the overall “marital estate” to be divided, while each party will be responsible for their own separate debts. Under Virginia Code § 20-107.3, all debt incurred by either party after the date of marriage and before the date of separation is presumed to be marital—regardless of whether the debt is in the names of both parties, or only in the name of one party. However, if one party can prove that a debt was incurred, in whole or in part, for a “nonmarital purpose,” the court may designate that debt as the separate property of the party who incurred it.
Example: During the marriage and prior to the final separation of the parties, Husband runs up $10,000 on a Macy’s charge card in his name alone. Under Virginia law, that entire debt is presumed to be marital, meaning it will be included in the marital estate for purposes of equitable distribution. However, if Wife can prove that Husband charged the $10,000 not for the benefit of the home, but on gifts for his mistress, then the court will classify the entire debt as Husband’s separate property—meaning Wife will not have to contribute a penny toward its repayment.
Our Divorce Lawyers
The award-winning divorce attorneys at Livesay & Myers, P.C. are experienced with every type of equitable distribution case in Virginia, including complex and high value cases. From our five convenient office locations, we represent clients throughout Northern Virginia. If you are facing an equitable distribution hearing in Northern Virginia, we can help. Be sure to read our client reviews, then examine the profiles of each of our attorneys to find the one who is the best fit for you.