In Virginia, the division of assets and debts is often a major point of concern for individuals seeking a divorce. Generally speaking, divorcing parties will divide “marital” assets and debts. If the parties are unable to reach an agreement, they will have a Virginia Circuit Court Judge determine how to divide the marital assets and debts. Because court-division is timely and expensive, many people resolve these issues by agreement. However, it is critical that you understand what assets/debts are “marital” and subject to division; individuals often fail to recognize what property is subject to being divided, potentially resulting in them reaching an agreement to waive property rights worth thousands of dollars!
The difference between “marital” and “separate” assets is described in Virginia Code Section 20-107.3; it may seem simple based on the plain language of the statute, but there are several common misconceptions. Here are some true/false inquiries to highlight the misconceptions:
- T/F: My spouse has the boat and I don’t ever really use it so he is automatically able to claim the property as separate.
- Answer: False. Actual possession and use does not generally dictate whether a piece of property is marital or separate.
- T/F: Our house is deeded in my husband’s name, so it’s automatically his property and I don’t have any interest.
- Answer: False. Just because a piece of property is deeded or titled in one spouses name does not necessarily mean that the other spouse doesn’t have an interest.
- T/F: My husband has credit card debt his his sole name, but I might be required to pay for some if it was accrued during marriage even though I’m not on the account.
- Answer: True. As with property mentioned above, just because a debt is in one spouses name does not necessarily mean that the debt will be “separate” – in fact, if it was accrued during marriage, there is a good chance it will be classified as marital or part-marital (a.k.a. “hybrid property”).
- T/F: My spouse and I keep separate bank accounts so we each keep what we have no matter what.
- Answer: False. Just because both parties have similar accounts in their own name does not necessarily mean that the accounts are not “marital” and subject to division by a Court.
In Virginia divorce litigation, the classification of property as marital or separate and the determination of your rights in such property is controlled by the definitions and language of Virginia Code § 20-107.3, which may not match one’s preconceived notions. If no agreement is reached, it is the responsibility of the parties to accurately and effectively present the court with the information to properly classify property for allocation. Parties failing to meet a burden of showing evidence to support a certain classification of property, or parties failing to recognize all marital property when signing a Property Settlement Agreement, may quickly lose valuable property interests. Please understand that this post is designed to provide very general information; every case is unique, and it is important that you speak with an experienced divorce attorney about property issues in your case.
Whether you believe you and your spouse are heading toward a highly contested divorce or you believe that a settlement is the likely outcome, the experienced Virginia divorce lawyers at BoykoNapier are available to assist. If you have questions about your case, call us at (804) 658-3418, or contact us via email.