Dividing Property & Debt During Divorce
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Dividing Property & Debt During Divorce

| Oct 27, 2020 | Divorce |

One of the most complicated and contentious aspects of any divorce revolves around the question of who gets what following a divorce. When it comes to determining the distribution of property and debt during the divorce process, the most important questions to ask are: (1) Is the property classified as separate or marital? and (2) If the property is determined to be marital, what is the process for determining distribution between the spouses?

(1)  Is the Property Classified as Separate or Marital?

Before the task of dividing property can be accomplished, we must first look to whether the specific property is marital, and therefore subject to division, or separate, which remains with the rightful owner and outside the scope of division. So, what exactly is separate and marital property?

  1. Separate Property: Separate property pertains to property and assets individually owned and titled in the name of one spouse. The assets and debt deemed to be separate generally remains solely with the owning spouse, and is therefore not subject to division. This typically includes situations whereby property and/or debt is:
  • Owned prior to the marriage;
  • Acquired after the date of the separation;
  • Inherited by one spouse only;
  • Received through gift;
  • Otherwise acquired by one spouse through their own separate (non-marital) funds.
  1. Marital Property: Marital property is considered any other property and debt that is not separate. Marital property is presumed to be jointly owned, and therefore is subject to division and distribution between the spouses. This typically includes situations such as:
  • Real estate, vehicles, and other property titled in the name of both spouses;
  • Property and debt acquired during the marriage with joint funds;
  • Contributions to bank accounts, pensions, retirement plans, and similar accounts, contributed with earned income during the course of the marriage.

(2)  What is the Process for Determining Distribution?

All assets and debts deemed to be marital in nature, are then divided between the spouses based on the theory of Equitable Distribution. Equitable distribution does not necessarily mean an “equal” division, but instead a “fair” division of those marital assets and debt. As in life, equitable distribution holds that some factors make the ownership of property inherently unequal. In determining what is a fair, and therefore equitable, distribution among the parties, Virginia judges consider the following factors under the statuary code, (Va. Code § 20-107.3):

  1. The contributions, monetary and nonmonetary, of each party to the well-being of the family;
  2. The contributions, monetary and nonmonetary, of each party in the acquisition and care and maintenance of such marital property of the parties;
  3. The duration of the marriage;
  4. The ages and physical and mental condition of the parties;
  5. The circumstances and factors which contributed to the dissolution of the marriage,
  6. How and when specific items of such marital property were acquired;
  7. 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;
  8. The liquid or nonliquid character of all marital property;
  9. The tax consequences to each party;
  10. The use or expenditure of marital property by either of the parties for a nonmarital 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
  11. Such other factors as the court deems necessary or appropriate to consider in order to arrive at a fair and equitable monetary award.

As you can see from the above factors, there are many aspects of a marriage that are considered that may result in property being divided in a manner that is not exactly an even 50/50 split. Based on these considerations, a judge may choose to award one spouse more or less of a marital portion depending on the circumstances surrounding the marriage. For example, some situations that may influence a court in awarding an unequal split could include:

  • The dissolution of the marriage may have been the result of an abusive relationship or where one spouse was unfaithful;
  • One spouse brought much more property, or debt, into the marriage;
  • One spouse contributed much more property, time, or effort to the marriage;
  • One spouse may have sacrificed training, education, or career opportunities in order to contribute to the well-being of the marriage and/or the family;
  • One spouse may have certain health or cognitive disabilities;
  • A marriage short in duration may result in a disparate division of property, as compared to a much longer and established marriage that would likely result in a more equal distribution.

Obviously, this is not an exhaustive list of the types of scenarios that could result in an unequal split between the spouses, but it does provide some common examples of the types of things that the judge looks at when making an equitable distribution determination. The factors will vary on a case-by-case basis in each different marriage, and therefore, no exact mathematical equation can be employed across the board in determining how marital property and debt will be allocated at the conclusion of a marriage.

(3)  What Next?

Although this is in no way inclusive of all the legal implications that may arise, you now have a basic overview of the process of classifying and distributing property during a divorce case in Virginia. To ensure that all of your interests, and property rights, are being protected, you should seek the assistance of a skilled family law attorney. As you can see from the above overview, the classification, tracing, and ultimate distribution of marital assets and debt can be extremely complex and complicated, especially in highly contentious separations.

With that being said, it is imperative that you have an attorney that has the extensive knowledge and expertise necessary to navigate through these complicated issues. Call the experienced attorneys at Strentz, Greene & Coleman, PLC, and let us help in guiding you through this process.