How to Manage Your Assets, Debts, and Property Division Decisions in Preparation for Your Divorce in Virginia

Divorce isn’t just the emotional and physical end of a marriage. It’s also the dissolution of two deeply intertwined financial lives. You have probably amassed a home, vehicles, a mortgage, credit card bills, retirement accounts, and investments during your marriage. And the law says that before you can settle your divorce, you and your spouse must “equitably” divide this marital property. But how do you do that? And what, exactly, is considered “equitable” division or equitable distribution?

Let’s look at what is involved in property distribution in a Virginia divorce and what you can do to ensure you are getting your “equitable” or fair share.

Equitable Distribution Under Virginia Law

Virginia is considered an “equitable distribution” state instead of a community property state. While many people associate the term “equitable” with “equal,” in the context of divorce, equitable means fair – but not necessarily equal.?

What Virginia courts consider fair will differ with each couple’s unique circumstances. While that may look like a 50-50 split for some couples, more often, it’s not. Some factors the court considers when making equitable distribution decisions include

• The monetary and nonmonetary contributions each spouse has made to the well-being of the family, including homemaking and child care,
• The monetary and nonmonetary contributions each spouse has made in the acquisition and care of marital property,
• The duration of the marriage,
• The income and economic circumstances of each spouse,
• The age, physical health, and mental health of both parties,
• The tax consequences to each party,
• The circumstances that led to the divorce (grounds),
• Any use of marital property by either of the parties in anticipation of a divorce or separation,
• Other provisions made by the court regarding personal property and alimony,
• Other factors the court may consider important.

Consequently, when the court makes property division decisions in Virginia, different couples will have different variables considered depending on their circumstances.?

How is Property Divided in a Virginia Divorce?

In Virginia, a married couple’s property and liabilities fall into two categories:

• Marital, or joint property
• Separate property

Only marital property will be divided in a divorce, which includes income, assets, debts, joint bank accounts, retirement accounts, and other investments you’ve acquired while you were married. Anything either of you owned before you got married or after your separation or acquired through separate gifts or inheritances during your marriage is generally considered separate property and not subject to property division in a divorce.?

But while the concept of yours, mine, and ours may seem relatively straightforward here, in matters of property division during a Virginia divorce, it isn’t always so black and white.?

Commingled Funds Can Complicate Property Division

When does separate property become marital property? When it is commingled during the marriage.

For instance, if you owned your home before you got married, but you and your spouse decided to keep it as investment rental property, what was once your separate property may have been commingled with your marital property.?

If you and your spouse have both invested time and marital funds fixing it up over the years, and the money you’ve earned as rental income has gone into a joint bank account, your spouse now has an interest in this home and it may now be classified as a marital asset in your divorce. In this case, you may have to prove that the property was not only yours before marriage but also that it was not commingled with marital funds while you were married. And this can be complicated.?

How Do You Manage Your Marital Assets and Debts in Preparation for a Divorce?

Even the friendliest divorces can become adversarial when it comes to property division. Fair division requires transparency, so if you suspect that assets or debts have been hidden by your spouse, or you and your spouse have significant net worth and complicated assets or business interests, you don’t want to rely solely on your spouse for this information.?

Organizing your financial documents and compiling a paper trail as early as possible will ensure you understand what will be subject to property division and your lawful share of the marital property.

Be prepared to share several years of financial information with your attorney and soon-to-be ex-spouse through the discovery process.?

Inventory All Your Assets and Debts

Create a comprehensive list of your assets and debts. Identify which debt is marital and which is separate.?

Marital property should include any earnings, real estate you own, personal property, joint bank accounts, mortgages, loans, credit card statements, vehicles, retirement accounts, investment accounts, and business interests. Separate property will generally be kept by the person who acquired or incurred it.

Asset Valuation

Accurate valuations ensure equitable division in a divorce, and you will want to understand the current market value of your assets. You may need to arrange for professional appraisals for this, especially in the case of real property, businesses, or particularly valuable personal property.?

Understanding the complete scope of your assets and debt ensures you don’t overlook or undervalue property that should be included in the division and also ensures that you aren’t unfairly burdened with more than your fair share of marital liabilities.?

Some Other Important Things to Consider in Property Division

Unfortunately, divorce doesn’t always bring out the best in spouses. There may be valuation disputes, hidden assets or debts, and emotional attachment to assets like the family home or a luxury vehicle. Spouses can focus on emotionally fueled short-term wins without considering the long-term implications on their financial stability. Failing to consider the tax consequences of dividing some assets can also result in unexpected liabilities. This is when having an experienced legal advocate can be crucial.

It is imperative that when determining the value of assets you do not start making agreements on the value of some assets and not others. This can lead to a very inequitable total valuation of all of the marital assets.?

Getting the Support and Guidance of a Virginia Family Law AttorneyWhile it’s always best to come to some agreements about your property division without the court making all the decisions, it’s not always possible or even advisable without the legal representation of a Virginia family law attorney to ensure your interests. A lawyer can play a crucial role in negotiating property division that meets the court’s “equitable distribution” framework; Your attorney’s role in helping you navigate the financial aspect of your divorce will include understanding Virginia’s equitable distribution laws and how they specifically apply to your case ensuring you receive a fair share of the marital assets Assisting you in taking an inventory of your marital assets and debts; Working with financial experts, forensic accountants, or appraisers to ensure there are no hidden assets or debt or to determine the value of your marital assets; Using legal tools available to them during the discovery process to obtain necessary information from your spouse, reviewing and analyzing collected financial documents to ensure that all assets and debts have been disclosed and appropriately valued. Develop strategies for negotiating a fair property settlement agreement based on your specific needs and priorities advising you on potential tax consequences so you can make informed decisions. The financial aspects of a divorce are often some of the most complex. Securing legal expertise and support ensures that you achieve a fair and equitable division of your marital property, your legal and financial interests are protected, and your long-term financial goals and well-being are considered. Don’t try to navigate the divorce process on your own. At Melone Hatley, P.C., our skilled Virginia family law attorneys are your dedicated partners in the divorce process. We have convenient locations in Virginia Beach, Fairfax, Chesapeake, Loudoun, Reston, and Richmond, as well as Charlotte, North Carolina, and Tampa, Florida. Call us at (877) 416-5071 or schedule a free consultation through our website contact form.