Filing for divorce can sometimes be complicated.
If you and your spouse own property together, you will likely go through the process of splitting your property, assets, and debts with your spouse in an “equitable” manner.
Specifically, equitable distribution refers to the legal process in which you and your spouse will carefully classify, value, and divide your property during a Virginia divorce.
However, it’s important to note that an “equitable” distribution is not necessarily an “equal” distribution.
Unlike some other states, Virginia’s divorce laws emphasize a just and fair division of assets over a strictly equal division.
While the basic assumption is that property will be split 50-50, the division of property could look much different and still be equitable under Virginia law.
In this article, we’ll cover the basics of the equitable distribution process in Virginia.
However, due to the complexity of the subject matter, it’s impossible to cover every aspect of this practice area.
Always speak to an attorney if you have any specific questions regarding your case or the nuances of divorce law in Virginia.
The 3 Steps to an Equitable Distribution
There are three broad steps to an equitable distribution of property during a Virginia divorce:
- Categorize your property as separate, marital, or mixed
- Value any relevant contested marital property
- Divide your property equitably
Since every divorce case is different, you may experience these topics in a different order, or possibly even skip a few topics entirely.
This organizational structure instead highlights the why behind many of the steps in the Virginia divorce process.
Hopefully, by the end you will have a better understanding of the Virginia divorce process as a whole, as well as a greater appreciation for what you can expect from the lawyers and officials you’ll interact with in your particular case.
Step 1: Categorize Your Property as Separate, Marital, or Mixed
The first step in dividing your property may seem obvious, but can be more complicated than it seems.
Namely, you have to identify the property that you’ll have to divide during your divorce.
Generally speaking, a court will only divide property that’s owned by both you and your spouse (often referred to as “marital” property).
We’ll go into more detail about exactly what this means below. But how do you start the process of identifying and classifying your property?
First, it helps to make a list of all property that could become an element of your divorce.
This is something your attorney will probably help you do at one of your first meetings.
Some items might be obvious, such as the family home or any cars that are titled in both your names.
But what about your retirement accounts from before the marriage? What about that family heirloom that your grandmother gave you?
And what about the kinds of personal items you accumulate as a married couple, like dining room furniture, that great couch you both love, or the ugly vase you got as a wedding gift?
There are some items that you and your spouse might agree on how how divide.
For example, each person might agree they should keep their own vehicle, or you might agree that one person should have the big screen t.v.
For items that are disputed, however, you may need to get the judge involved.
Property Classification in Virginia: The Basics
As I noted above, equitable distribution refers to the process of classifying, valuing, and dividing any relevant property during a divorce.
In this way, it’s often wise to make a list of any important property that may come up during your divorce.
Then, you (and your lawyer if you have one) can categorize the property on this list using the guidelines provided in the Virginia Code.
As a quick summary, there are three general classifications of property in Virginia:
- Separate Property — This classification includes property acquired by either spouse before the marriage, inheritances, heirlooms, personal injury settlements, and other distinctly separate forms of property.
- Marital Property — The Virginia Code defines marital property as all jointly-owned property, and all other property other than separate property, that you acquired from the date of the marriage to the date of separation. Basically, if you can add “family” before the item (“family car,” “family oven,” “family couch”) it’s probably marital property. Even if you can’t, is probably still marital property unless it specifically falls under one of the definitions noted in the separate property section of the Virginia Code.
- Hybrid (“Mixed”) Property — Hybrid property is exactly what it sounds like: property that is part separate and part marital. This is a very complex area of law, but basically covers the marital share of any otherwise separate property.
Additionally, note that debt most forms of debt also fall under these three classifications.
For example, debt accrued before the marriage (such as a personal loan) will generally be separate, while debt accrued during the marriage (such as a mortgage) will generally be divided between the spouses.
How to Categorize Your Property
The best way to categorize your property is to think about it in terms of “what matters.”
Generally, this means making a list of things that are expensive or sentimental (or both).
As a quick rundown of things that attorneys generally look for, you should generally write down any information about the following:
- Real estate, such as the family home, vacation homes, vacant lots, hunting cabins, etc.
- Vehicles, including other high-value items such as ATVs and motorcycles.
- Bank accounts, such as checking, savings, and money market accounts.
- Investment accounts, including all stocks, bonds, mutual funds, brokerage accounts, etc.
- Retirement accounts, such as pensions and 401(k)s.
- Life insurance policies (also include information about which party is the policy holder and who the designated beneficiaries are).
- Debts, including all loans, mortgages, credit card debts, student loans, etc.
- All other property with a value of more than a few hundred dollars.
- Any sentimental property that has a high emotional value (such as pictures, scrapbooks, or the family pet).
You don’t have to list all of your property, just the things that you think will probably come up in your divorce.
Classifying the Property on Your List
After you finish making your list, think over the entries and roughly categorize each as either “separate,” “marital,” or “I can’t tell.”
For example, do you have a collection of baseball cards from your childhood that you’d like to keep?
Did your spouse never even look at these cards or put any “personal effort” into the collection?
If so, then you can (probably) mark it as separate property and assume that it won’t come up in your divorce.
As another example, did you and your spouse purchase a super fancy couch for your shared living room?
If so, then it’s probably marital property and, if contested, may come up in the divorce.
After you’ve written down the basics, you can go over your list with your attorney to correct and finalize the entries for your actual divorce documents.
Step 2: Value Any Relevant Contested Marital or Mixed Property
Unlike the “categorize” and “divide” steps in this process, the Virginia Code doesn’t have any guidelines for how you can properly “value” your property for an equitable distribution.
For this reason, spouses who disagree over the actual value of a piece of property will instead have to argue their case in front of a judge, who will ultimately make the final decision in the case.
Put another way, valuing your property usually means either:
- Agreeing with your spouse about the listed value of a piece of property, asset, or debt in preparation for an equitable divorce; OR
- Convincing a judge, arbiter, or your spouse (in the case of mediation), that the property is worth the amount of money you claim.
In this way, you’ll want to get a rough idea of the total value of your property before progressing with your divorce, and a definite value of any contested property before appearing in court or in front of a mediator.
Four Common Types of Property to Value
There are several different types of property that you’ll probably have to value at some point in your divorce.
As a few of the most common:
- Homes and Real Estate — If you and your spouse own a home or another form of real estate, you may have to hire an appraiser to value your property. You could also use the information from the last time you payed taxes on the lot.
- Vehicles — You can usually value your vehicles by finding the fair market value for your particular make and model. The easiest way to do this is to find out what other, comparable cars are selling for in your area.
- Financial Assets — Valuing financial assets can be either incredibly simple or prohibitively complicated depending on your financial situation. While a bank statement should suffice for most divorces, you may need to hire an accountant or a financial analyst in more complicated situations.
- “Everything Else” — Anything owned by both you and your spouse may be divided during your divorce, even if it doesn’t necessarily have monetary value. Collections of sports memorabilia, season tickets, and even the family pet are all pieces of property that often end up contested.
Remember, the judge’s role in your divorce is to ensure that your split equitable.
If your separation agreement skews too far in one way or another, the judge may intervene to ensure that your divorce remains just and fair.
Especially when dividing big-ticket items such as houses or businesses, it’s important to accurately assess the total value of these pieces of property.
Step 3: Divide Your Property Equitably
After you’ve properly classified and accurately valued all of your property, you’ll have to fairly divide this property between yourself and your spouse.
Virginia courts will generally consider eleven factors when determining if a distribution is equitable:
- The contributions, monetary and nonmonetary, of each party to the well-being of the family;
- The contributions, monetary and nonmonetary, of each party to the acquisition, care, and maintenance of such marital property of the parties;
- The duration of the marriage;
- The ages, physical condition, and mental condition of the parties;
- The circumstances and factors which contributed to the dissolution of the marriage (specifically in regards to adultery, felony conviction, cruelty, desertion, or abandonment);
- How and when specific items of such marital property were acquired;
- 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;
- The liquid or nonliquid character of all marital property (i.e. can the property be easily converted into cash, or divided in a way similar to cash);
- The tax consequences to each party;
- 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 (i.e. did one spouse unfairly spend or use the marital property after the date of separation as a way to spite the other spouse); AND
- Such other factors as the court deems necessary or appropriate to consider in order to arrive at a fair and equitable monetary award.
Equitable Distribution in Practice
In practice, these factors provide statutory guidance for determining whether or not the division of property is equitable.
In most cases (both contested and uncontested) the court will apply these factors to the facts of the case to determine an equitable distribution of any and all marital property.
For example, if you choose to draft a Property Settlement Agreement with your spouse in an uncontested divorce, the judge will use these factors to determine if your Agreement meets all relevant Virginia laws.
In a similar fashion, a judge will also apply these factors in a contested divorce to determine how to divide property when the spouses can’t decide amongst themselves.
As another example, if one spouse contributed an especially large amount of time, money, and effort into a particular piece of property (such as a business), the court will likely take those contributions into account when determining ownership of that piece of property (see Factor 2 in the list above).
Importantly, no matter exact distribution ratios (50/50, 60/40, 75/25, ect…), the court may also issue specific orders for exactly how the couple should meet this distribution amount.
For example, the court could order the transfer of a piece of property from one spouse to another.
Similarly, the court could order the sale of a non-liquid piece of property (such as a car), or even order that one spouse “buy out” the other spouse’s share of any contested property.
In any event, either you or the judge must divide all marital property “equitably” before the court will issue your final divorce decree.
A Quick Note on the Practical Side of Things
Finally, it’s important to note that the court will generally follow your lead on this issue if both you and your spouse agree on a particular division of property.
If you and your spouse agree on how you’ll divide everything except the family car, the court will (for the most part) only care about dividing the family car.
If you remember my “what matters” comment from Step 1, most contested divorces will center on arguments over how the spouses will divide the property, assets, and debts that matter the most.
For this reason, it’s often wise to try to divide your marital property fairly amongst yourselves first.
Then, if you disagree on particular items, see if you can work out the issue with the assistance of a lawyer or mediator.
Only then should you consider spending the additional time and money to appear in front of a judge.
Can I Avoid an Equitable Distribution?
If you and your spouse own any property together, there’s really no way to avoid an equitable distribution in Virginia. After all, you have to divide the property somehow.
Virginia courts generally want to ensure that the division of property is equitable for both parties, so divisions that skew significantly in one direction or the other are generally uncommon.
However, there are certainly several ways for you to make the process easier.
Draft a Property Settlement Agreement
A Property Settlement Agreement is a document, signed by both you and your spouse, that details how you will divide your property during a divorce.
Think of it like a divorce plan that you submit to the court for final approval.
Most uncontested divorces in Virginia actually end in Property Settlement Agreements.
This is because they are both cheaper and quicker than normal divorce proceedings.
Alternative Dispute Resolution: An Argument for Mediation
As noted above, the court will only become involved in your equitable distribution process to categorize, value, or divide certain pieces of contested property.
However, appearing in front of a judge is often a worst-case scenario due to the costs involved.
In most cases, the judge may even order that you appear in front of a mediator before scheduling further hearings for your case.
Prenuptial Agreements (“Prenups”) and the Equitable Distribution Process
To simplify a somewhat complicated area of law, prenups are basically documents that allow you to write your own divorce laws and guidelines.
For example, you could draft a prenup that adds additional restrictions or rules to your separation in the event of a divorce.
Similarly, you could write a prenup that ignores certain elements of Virginia’s divorce laws (provided the judge finds these provisions to be fair and just).
Importantly for this article, one of the most important (and common) uses of a prenup is to categorize and value certain pieces of property before the marriage even begins.
For example, you could add a section in your prenup that states “the house and land located at 123 Example Street shall be deemed as separate property under the ownership of [Wife] for the full extent of the marriage.”
Then, in the event of a divorce, the court would consider that piece of property as separate regardless of the rules outlined in the Virginia Code, provided that the judge finds such a determination to be fair and just.
One of the most important aspects of any Virginia divorce is the equitable distribution of all marital property.
However, it’s important to note that “equitable” does not necessarily mean “equal” in this context.
While most Virginia courts default to a 50/50 division of property, it’s not uncommon for other distribution ratios to appear as well.
Most equitable distributions can be understood as the precise classification, valuation, and division of any and all marital property, assets, and debts.
Whether you choose to divide your property on your own terms through a Property Settlement Agreement or at the direction of a judge doesn’t matter.
This division must be equitable under all relevant Virginia laws.
Since every divorce is different, you should always seek out the advice of a divorce attorney before filing for divorce in Virginia.
Even for simple uncontested divorces, it’s important that you understand (and follow) all of Virginia’s equitable distribution laws before submitting your final divorce paperwork.