Equitable Distribution of Property
Equitable distribution, under the laws of the State of Virginia, is the division of all assets and liabilities when divorcing. Virginia Code § 20-107.3 dictates that the court must consider all property of the marriage, including personal and real property.
The court has the authority to classify property as:
Under equitable distribution, the court will have the discretion to distribute any property that is marital and the marital portion of any hybrid property and also award monetary awards to either party. The court will ensure the distribution of assets is fair based on the statutory factors.
Understanding Equitable Distribution
The courts must decide how to divide assets in a divorce by first determining what class the property is in. In Virginia, there’s no presumption of equal division of assets. It’s up to the court to consider multiple factors relating to the marriage to determine how assets should be divided. A few factors that are taken into account are:
- Contribution of each party to the family’s well-being
- Contribution in the acquisition, care, and maintenance of marital property
- Marriage duration
- Age and condition of all parties
- Circumstances surrounding the dissolution of marriage
- When and how assets were acquired
- Liabilities and debts of each spouse
- Additional factors
The court must consider all of the statutory factors but judges have discretion as to how much weight they give to each factor. It’s rare that awards are overturned, so it’s important to have a divorce lawyer assist you from the start of the divorce.
What Is the Difference Between Marital and Separate Property?
Only marital property is subject to equitable distribution, so it’s important to know the difference between separate and marital property in a divorce.
Separate property belongs to one spouse and is not part of the items tied to the marriage. For example, the following would be separate property:
- Assets acquired before marriage
- Assets acquired after separation
- Inherited property or items gifted to only one spouse
Separate property that is sold, traded, or receives income will remain separate. For example, if one spouse sold a home purchased prior to the marriage to purchase a vacation home during the marriage, the vacation home would remain separate property. An exception is made when marital funds are used for the upkeep of the home, or the other spouse is added to the deed.
The property’s increase, as well as capital gains on any separate property, remains separate.
Of course, there are exceptions to the rule, which the court will apply. Property, when acquired through marital funds during separation, will still be considered marital property. Even the capital gains earned from the property may be marital if the other spouse’s personal efforts led to an increase in value.
A home that is being remodeled, personally by the spouse, would fall into this category because their efforts led to the property’s value rising.
The judge will, at their own discretion, work to classify the property properly. You do have a right to appeal these findings, but you take on the burden of proof to prove that the classification was done erroneously.
Any assets and debts that do not qualify as separate, will generally be considered marital. The marital property classification includes any jointly titled property and all assets and debts accrued during the marriage. , starting from the time of marriage to the date of separation.
Few exemptions do exist in this case, such as debt accrued as a direct result of a nonmarital purpose. In this case, the debt will be considered separate debt.
Since spouses have access to all property, there are times when “marital waste” occurs. What this means is that during the divorce process, one spouse may try to deprive the other spouse of certain assets, so they will misuse or dispose of the property. The court can consider this waste when dividing assets and debts.
What Assets and Debts Are Taken into Account for Equitable Distribution?
Virtually all assets and debts that have accrued during the marriage will be considered, including:
- Checking and savings accounts
- Stocks, bonds, investment accounts, cash, etc.
- Real property (homes, land, buildings)
- Mortgages, credit cards, loans, etc.
- Property owned through a business (exemptions exist)
- Retirement accounts
- Automobiles, boats, etc.
- Insurance policies
- Artwork, collections, and antiques
- Furnishings and household goods
There are some circumstances where separate property will be considered as part of the marital assets or debts when there was commingling.
Your lawyer and the court will ask for all records of accounts, statements, and lists of assets. It’s important to be as thorough as possible and never attempt to hide assets.
The court will determine the split of the property. In most cases, a 50/50 split of assets occurs. In some cases, the court may decide to apply a 60/40 or other type of split. Each party is able to retain separate property and debt unless otherwise specified in court.
How Can a Divorce Lawyer Help Me With Equitable Distribution?
A Fairfax divorce lawyer can provide knowledge and experience with the law in order to ensure that your rights are protected through the entire divorce process, including the equitable distribution of property. It is important to have an experienced lawyer on your side to fight for your best interests, otherwise, you may not receive the portion of your property that you truly deserve.
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Frequently Asked Questions
How do you calculate equitable distribution?
It is important to remember that equitable distribution does not always mean equal distribution when it comes to splitting assets and other property in a divorce. Oftentimes the court will determine that a 50/50 split is appropriate, but this is not always the case. They are trying to determine what is the fairest way to split everything, based on many factors, and so the split can sometimes look more like a 60/40 or 75/25, or really any split the court deems most equitable.
What is the difference between equitable distribution and community property?
In a community property state, all assets and debts are split 50/50 no matter the circumstances. In an equitable distribution state, such as Virginia, the goal is to make the split of property fair to both parties and will take into account the statutory factors before determining how to split the parties’ assets and debt.
How does a judge decide who gets what in a divorce?
When a judge is deciding how to split property in a divorce, they are purely looking at the statutory factors. They will take into consideration the separate and marital property, as well as the circumstances of the divorce in order to make sure the distribution of property is as fair as possible after considering all the factors.