Division of property in a divorce is mostly a contentious issue. In particular, a thorny question in a divorce can be who gets the family home. This can often become a cause of discord and disagreements between the divorcing parties.
Marital Property vs. Separate Property under Virginia Law
Any income earned or assets amassed, by either spouse in the entire time that they were married to each other, is marital property. All marital property is subject to equitable division in a divorce.
Separate property, on the other hand, constitutes any assets either spouse owned prior to being married to each other. Apart from the assets purchased from earnings, separate property can also include property or assets received as a gift or inheritance. Separate property is not subject to division in a divorce.
Are Community Property Laws Applicable in Virginia?
Divorce laws in Virginia are complicated at their best and often prove to be confusing, especially when it concerns the division of assets. Virginia is not a community property state. Instead, the Commonwealth follows the equitable distribution of assets during a divorce process. Under equitable distribution, assets are not split exactly down the middle but divided in a manner that is fair to both spouses in terms of their finances.
Couples have the option to decide among themselves on what they deem as a fair division of assets. In the event of no agreement between a divorcing couple, the court steps in to split the marital property, leaving aside any separate property owned by either spouse.
How is Marital Property Divided in a Divorce?
For the court to consider an asset in a Virginia divorce, the property first needs classification, in part or in full, as marital property. The law considers any property acquired during a marriage, whether individually or jointly purchased, as marital property.
An exception to this rule includes a house inherited or received as a gift by one of the spouses during the marriage. Sometimes, one spouse may use premarital funds to make the down payment. but the earnings of either spouse may pay for the mortgage of the house.
Pre-marital agreements are generally helpful to resolve the handling of such exceptions during a divorce. Let us look at how Virginia law decides division of property in various scenarios:
Pre-Marital Home Purchase by One Spouse
- If one spouse made the down payment on the house, but marital earnings and assets helped in paying off the mortgage or home improvements, the court might award a share of the asset to the other spouse.
- If the couple acquired the home during their marriage, but only one of them has their name on the title, the court has the authority to monetarily compensate the other spouse based on equity. Typically, equity is the balance left over after deducting the mortgage balance from the property market value.
If the spouse owning the house is unable to afford the monetary award, the house may be put up for sale to generate the required funds.
- If both spouses are liable on the mortgage but one of them has ownership, the court, apart from awarding a monetary award to the non-owning spouse, would also instruct the owning spouse to ensure removal of the other spouse from the liability by refinancing the mortgage.
Post-Marital Home Purchase by Both Spouses
- If the property is jointly titled, the law offers both spouses the chance to secure the property for themselves by buying out the other spouse and refinancing, to relieve them from the liability of mortgage. In such cases, the court usually does not allow more than 3 months to refinance and retain the property.
- If both spouses do not have either the inclination or the ability to retain the community property, the court may order the sale of the asset, with the proceeds distributed equitably.
- If both spouses want to retain ownership of a jointly titled home, things become more complicated. In such instances, the court makes the decision about the ownership of the community property based on what is fair and equitable for both spouses. In such court decisions, all other assets are also taken into consideration to ensure an equitable distribution.
How are Proceeds of Property Sale Equitably Divided in a Virginia Divorce?
In Virginia, divorce laws do not work on the presumption of equal division of assets, whether it is proceeds of sale or house equity. Instead, several factors determine an equitable distribution of marital assets. Some of these factors include:
- The monetary as well as non-monetary inputs of each spouse to the economic well-being of the family
- The monetary as well as non-monetary inputs of each spouse to the purchase, maintenance, and improvement of marital property
- How either or both spouses acquired marital property
- Mortgage liability and other debts against marital property
- Tax consequences from the sale of marital property
Choose a Skilled Virginia Divorce Lawyer to Protect Your Interests
At Olmstead and Olmstead, our trustworthy and compassionate lawyers will partner with you to enable you navigate the legal process. Divorce is hard on all parties involved, and we understand that division of high-value assets such as a family home can be challenging.
You can count on us at every step of the complicated process including the valuation and division of marital assets, as we work hard to protect your long-term interests. Call us today at 703-260-8752 or contact us online for a free consultation with one of our Virginia divorce attorneys.