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Va. Code § 20-107.3 describes how property is to be divided in Virginia incident to a divorce. The process of dividing property goes through several stages. Whether you resolve your marital differences by negotiation, mediation, litigation, or some other means, these stages must be addressed in some form.|
The first stage of dividing property is identification. All property of any nature must be identified. Your attorney at Cole Miller PLLC will work with you to accurately identify the property you and your spouse have.
Properly can be real property, i.e., land, and things attached to land, i.e., houses.
Property can be personal property, i.e., anything that is not land.
Personal property can be tangible, such as a car. It can be intangible such as a stock certificate.
At this point, the question always arises as to how we know what the other spouse has. The formal process to identify the property of the other spouse is called discovery. Discovery is a process of disclosure of information governed by the Rules of the Supreme Court of Virginia and enforced by the local courts.
Ownership and Legal Title of Property
Ownership and legal title of property must also be determined. There is no fixed time that these processes occur. Sometimes in the course of identifying property, the title and ownership will be disclosed. On other occasions, where ownership or title is in dispute, it may be the act of classifying property, described below, that establishes ownership or title.
Valuation of property can also occur at varying stages. Property with minimal value may be removed from further consideration when it is identified. The value of other property may not be complete until it is appraised by an expert. Real estate appraisers are frequently retained to value the parties’ residence.
Some properties are easily valued. For instance, a bank statement will provide the value of the account on the date of the statement. In other instances, valuation may remain in contention with two equally qualified experts unable to resolve the value of a family business. When that occurs, each expert will explain to a judge what his or her opinion of value is and how he or she derived that value. It will then be the judge’s responsibility to establish the value based upon the evidence presented during trial.
Once all the property is identified, it must be classified. There are three possible classifications of property. There is separate property. There is marital property. There is hybrid property.
Separate property is that property that a spouse brought into the marriage, acquired during the marriage by gift or inheritance from a third party, or acquired after the date of marital separation. Separate property may be acquired from the exchange of other separate property.
Marital property is all property acquired during the marriage that is not separate. It includes all property that is jointly titled.
Hybrid property is property that has a mix of separate and marital property. One form of hybrid property that frequently arises occurs when a spouse has premarital savings that are used for the down payment on what will become the marital residence. Then, during the marriage, income during the marriage pays the mortgage. In that instance, there may be equity in the house derived from the separate down payment, and equity derived from the reduced mortgage balance with the mortgage payments being made from marital earnings.
The separate property and the separation portion of hybrid property are removed from consideration.
Virginia is an equitable distribution state. Some states are community property states. Some states begin with a presumption of an equal division and proceed from that starting point to a division that favors one spouse of the other. Virginia courts consider the eleven factors of Va. Code § 20-107.3 (E) to accomplish an equitable division of property. The factors cover objective measures such as monetary contributions. The factors consider subjective contributions such as non-monetary contributions.
The factors go from matters particular to the parties, such as their ages, to matters beyond the parties such as tax consequences.
Property division is a complex process. Entire books have been written on particular subparts such as valuation. The case law that interprets the application of Va. Code § 20-107.3 continues to evolve. Cole Miller PLLC has the experience and the expertise to economically divide modest marital estates as well as the financial acumen and knowledge to equitable distribute the most complex financial circumstances.
Teresa S. Cole
Michael C. Miller
Virginia C. Haizlip
Amanda Stone Swart
Camille J. DiIlio
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