Divorce is not just a separation of two lives but also the division of their shared assets, including property and debts accumulated during the marriage. In Virginia, this division is governed by a principle known as “equitable distribution.” Unlike the term might suggest, “equitable” does not mean “equal” but rather what the court deems fair based on several factors enumerated in Virginia Code § 20-107.3. This blog will guide you through the nuances of equitable distribution in Virginia, helping you navigate the complexities of dividing assets and liabilities in a divorce.

What Is Equitable Distribution?

Equitable distribution is a method used by Virginia courts to divide marital property and debts during a divorce. It involves a three-step process: classification, valuation, and distribution.

1. Classification: Assets and debts are categorized as marital, separate, or hybrid. Generally speaking, marital property includes most of what was acquired by either spouse during the marriage, while separate property refers to what each spouse brought into the marriage, acquired after separation, or received by gift or inheritance (as well some additional exceptions in the Code). Hybrid property has elements of both.
2. Valuation: The court determines the value of the marital property as of the date of the negotiation, separation, or trial, depending on the case’s circumstances.
3. Distribution: The court divides the marital property between the spouses in a way that it considers fair, considering the factors outlined in Virginia law and referenced above.

Factors Influencing Equitable Distribution

The court considers many factors when deciding on the equitable distribution of marital property, including but not limited to:

• The duration of the marriage.
• The age and physical and emotional condition of each spouse.
• The contributions both monetary and nonmonetary of each spouse to the well-being of the family.
• The contributions both monetary and nonmonetary of each party in the acquisition and care and maintenance of such marital property.
• The circumstances and factors that contributed to the dissolution of the marriage.
• The liquidity (or nonliquidity) of marital property.
• The tax consequences of the proposed distribution.

Division of Specific Types of Assets

1. Real Estate: The marital home and other real estate holdings are often the most significant assets divided in a divorce. The court may order the property to be sold and the proceeds divided, or one spouse may “buy out” the other’s interest. Few judges will order a spousal buyout over one party’s objection, although there is authority for this process in the Code.
2. Retirement Accounts: Dividing retirement accounts and pensions requires understanding the type of account and possibly obtaining a Qualified Domestic Relations Order (QDRO) to distribute the funds in a tax-deferred manner and without penalty. The court will divide defined contribution plans (TSP accounts, 401(k) accounts, IRAs) immediately, and will divide defined benefit plans (federal government pensions, private pensions) if, as, and when the benefit is paid at some point in the future (assuming the pension holder is not in pay status).
3. Personal Property: Cars, furniture, and other personal property will also be divided. The court aims to achieve a fair distribution based on the marriage’s overall financial picture.
4. Debts: Just as assets are divided, so too are liabilities. The court will consider which spouse incurred the debt and why, along with each spouse’s ability to pay. While marital debts are often divided equally, as with assets the court can divide debts in a manner which is equitable but not necessarily equal.

Protecting Your Interests

1. Documentation: Prepare thorough documentation of all assets and debts, including dates of acquisition and values. Establishing that an asset predates the marriage, in whole or in part, comes down to organization and diligence in working with third party institutions to obtain this information/documentation.
2. Legal Representation: Consider working with a knowledgeable attorney who can advocate for your interests and guide you through the legal complexities.
3. Negotiation and Mediation: Before turning to the court, you may reach an equitable agreement through attorney-directed negotiation or mediation, which can be more amicable and less costly.

Conclusion

Equitable distribution in Virginia seeks to ensure a fair division of marital property and debts, taking into account the contributions and needs of both spouses. Understanding this process is crucial for anyone navigating a divorce, ensuring that you are prepared to protect your interests and achieve a fair outcome. A great first step when starting this process is to google the code section referenced above and consider how the equitable distribution statute will apply to your personal circumstances.

If you have questions or need any assistance concerning guidance around divorce proceedings or equitable distribution, please contact Christian Lapham at (703) 525-4000 or clapham@beankinney.com.

This article is for informational purposes only and does not contain or convey legal advice. Consult a lawyer. Any views or opinions expressed herein are those of the authors and are not necessarily the views of any client.