Melvin L. Hill Attorney at Law in Roanoke, VA, Discusses Asset Distribution
Many clients ask, “How are assets distributed in a divorce?” Divorce can bring so many changes to a couple and their extended family. Some of the most significant and worrisome challenges to face in a divorce are financial in nature. Debt burdens alone weigh heavily, so handling these matters is important.
In December, we mentioned that Virginia law looks at marriage as an economic partnership. This month, we will take a look at the equitable distribution laws in Virginia. These define how to separate both property, or assets, and debt that a couple may have. Specifically, we will mention the statutory factors of Section 20 of the Virginia Code.
Equitable Distribution for Dividing Marital Assets, Debts, and More
Let’s begin with a look at what equitable distribution means. In short, it means “fair share,” and Virginia is one of more than 40 states with laws for divorcing spouses. These measures help to ensure both marital assets and debt:
- Classification – spouses classify assets and debt as marital, separate, or part marital and part separate.
- Valuation – amount of both assets and debts of all classification types.
- Division – fair division of both assets and debts of all classification types, based on Virginia Code Section 20-107.3.
Additional financial concerns of married couples may extend to spousal and child support. Because of the intricate aspects of these subjects, attorney consultation and representation is critical. Next, we can look a little deeper into these often-complicated matters.
Classifying Marital Assets and Debt
Identifying marital property may seem straightforward; however, questions often arise. We understand marital assets as those acquired or owned jointly from the date of marriage through date of separation. The title of homes and vehicles in both names or joint bank and retirement accounts are some examples.
We may recognize separate property as items either spouse owned before marriage. It also includes any gifts from persons other than their spouse during the marriage. An inheritance or gift from another family member to one spouse would be separate property.
Complexity sets in with the third category, part marital and part separate. A common situation is when one or both spouses operate a business together. Multifaceted examples include income from a separate business or the increase in value that one spouse adds to an existing business.
The Valuation of Marital Assets and Debts
Specific value generally occurs at the evidentiary hearing. There may be certain assets that could require valuation as of a date other than the hearing date. Market-related adjustments to retirement accounts usually occur on a particular schedule. Post-separation credit card charges relating to some marital purpose could be beyond the hearing date.
Income tax returns, real estate appraisals, financial statements, and other valuation tools are part of this process. Valuation of a business or other assets may require the services of a forensic accountant. Preparing documentation ahead of meeting with Melvin L. Hill Attorney at Law can help begin the valuation process.
Factors Used in Dividing Marital Assets and Debts
How does the court determine equitable distribution? Up next for review are these factors used in dividing marital assets and debts:
“The contributions, monetary and non-monetary, of each party to the well-being of the family;
The contributions, monetary and non-monetary, of each party in the acquisition and care and maintenance of such marital property of the parties;
The duration of the marriage;
The ages and physical and mental condition of the parties;
The circumstances and factors which contributed to the dissolution of the marriage, specifically including certain grounds of divorce;
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 non-liquid character of all marital property;
The tax consequences of dividing marital property”
Additional Factors Include
The use or expenditure of marital property by either of the parties for non-marital 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; and
Such other factors as the Court deems necessary or appropriate to consider in order to arrive at a fair and equitable monetary award.”
You may download an informative publication from the Virginia State Bar providing more details on the process.
Spousal and Child Support Considerations
We said above that divorce matters could include determination for spousal and child support. These issues do not fall within the realm of equitable distribution. Each has its own unique set of standards and factors to review.
Beyond asset and debt division above, be sure to consult with Melvin L. Hill Attorney at Law on support matters. A review of income and costs is important in knowing whether to file for support. Consulting with a knowledgeable attorney can also help to negotiate a productive settlement that upholds your rights.
Value of an Attorney’s Legal Advice and Representation
We hope this sheds a little light on equitable distribution and how assets are distributed in a divorce. Having an attorney’s independent legal advice and representation can be invaluable in negotiating settlements and upholding your rights. While divorce does not require an attorney, having sound legal counsel can protect your interests.
Divorcing spouses can take a more active role in managing the equitable distribution of marital assets and debts. While it can be an arduous process, you may rest easier being fully aware of the many aspects of distribution. Bring your questions to Melvin L. Hill, and experience the value of his experience for yourself.
Call Melvin L. Hill Attorney at Law in Roanoke, VA, today at (540) 342-1851 for knowledgeable divorce representation. Visit our blog for valuable insights and answers to questions such as “how are assets distributed in a divorce?”