Property Division – Equitable Distribution

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Virginia has adopted the “equitable distribution” model of dividing marital assets. This model is distinguished from the “title” method (if it is in your name, you get it, and your spouse can’t claim an interest in in), and from the “community property” model (it’s half mine, regardless). “Equitable” means fair, and a fair distribution of the marital assets is the goal of the process.

Determining Equitable Distribution In a Divorce

To determine who gets what marital property, the court will consider: the contributions, both monetary and non-monetary, that each party made toward promoting (or destroying) the family unit, contributions to the acquisition, care and maintenance (or dissipation) of the marital property, the length of the marriage; the ages, health, skills, and abilities of the parties; the relative ability of each party to acquire property in the future; tax consequences attendant to the award of a certain piece of properly; liens associated with a particular piece of property; and such other factors that the court considers appropriate to achieve a fair and equitable division of the marital property.

Seems simple enough, right? There’s more…

Holding Nothing Back

It is critical that you tell us all you know about your and your spouse’s assets. The more we know, the more we will be able to help you. Property includes assets as well as liabilities; real estate; and personal property; both tangible and intangible. Property can include houses, furniture, pensions, life insurance policies, annuities, retirement plans, businesses, coin collections — almost anything.

First, we must find and value the property. Next, we must determine whether the particular piece of property is separate property (and remains with the person who owns it) or marital property which the court can divide. Separate property is generally that property which a party acquired before the marriage or outside the marriage, such as by gift or inheritance, and kept a separate during the marriage (i.e., no commingling with marital property). Marital property is usually property and property interest that were acquired during the marriage. Property is presumed to be marital.

If you and your spouse can agree on how things will be divided and have reduced that agreement to writing (i.e., a written Property Settlement Agreement), it will be approved by the court in 99.99% of the time, and your case will essentially be over. If you cannot agree, the court will divide the property the property for you. Not fun, very expensive.

Do not hide assets. These assets are usually found and if they are found, you will look like a crook to the court. The judge will have trouble believing what you say about anything after that. The judge will not, however, have too much trouble assessing attorney’s fees against you (in favor of your spouse) for your behavior.

Debts

Debts are kind of like negative property. Marital debts are considered by the judge in making an equitable distribution award. So make sure that your attorney knows about these debts. If you want to assert that the debts fairly ought to be assessed mostly or totally against your spouse, you must prove the fairness of this. Therefore, keep credit card statements, receipts, etc. showing that the jewelry purchase was not a marital purchase, but was for the boy/girlfriend who broke up the marriage. Generally, only debts that existed on the date of separation will be considered by the judge for “division.”

A recent (2010) ruling by the Virginia Supreme Court has added a new wrinkle to the way debts are handled. If the debt is in your name alone, but you want the judge to assign it, in whole or in part, to your spouse, you carry the burden of proving the marital nature of the debt. (The ‘old’ rule was that if the debt arose during the marriage it was presumed ‘marital.’ No more — if the debt is in the name of a single party, it is presumed that party’s debt. How hard it will be to overcome that presumption is yet to be seen. All the more reason to heed the advice of the above paragraph.)

Despite an agreement (or court order) for one spouse to pay a debt that is in both parties’ names, if the party responsible for the debt does not pay the debt, the other party can (and usually will) be sued for the debt by the creditor. This is because the credit card company was not privy to the negotiations or litigation between you and you spouse. You cannot affect the rights of your creditors simply by filing a divorce. (For example, the husband agrees to pay the Master Card, and then refuses or is unable to do so because of death, bankruptcy, job loss or just plain meanness. In any case, Master Card can still sue both the husband or the wife–or either one of you–if the payments are not made–except if your ex-spouse files for bankruptcy, in which case only you can be sued.)

If your spouse files bankruptcy, it may still be possible to enforce the Separation Agreement or Court Order. See your attorney as soon as you receive bankruptcy paperwork from your spouse. Time is of the essence. If you spouse is not paying the debts that the court ordered him or her to pay, but has not filed for bankruptcy protection, you may be able to take your spouse into court on a contempt action. Again, see your attorney about how to go about doing this.