What Should I Ask for in a Divorce Settlement?

Once you’ve made the decision to divorce, you’ve still got a long list of difficult decisions ahead of you. One of those is what you want to ask for in your divorce settlement. This process can go very smoothly or be extremely time-consuming and adversarial, depending on your relationship with your ex-partner and how much you two are willing to compromise.

If you’re not sure what you should try to get out of a fair divorce settlement, we’re here to help. Call Olmstead & Olmstead at 703-361-1555 to schedule a consultation to discuss your options.

Start With a Full Understanding of Your Divorce Settlement in Virginia

Any major decision, especially one as significant as a divorce settlement in Virginia, must begin with complete and honest disclosure. You cannot realistically anticipate what you might gain or lose in a divorce if you don’t have a crystal-clear picture of your current financial standing and overall position.

This means taking an exhaustive inventory of everything you and your partner own and owe, both individually and jointly. Without this foundational knowledge, any expectations you set for the settlement will likely be unrealistic and could lead to disappointment or protracted disputes.

For instance, if you and your spouse have accumulated a substantial amount of credit card debt in Virginia, perhaps tens of thousands of dollars, through joint expenditures during your marriage, it is simply not realistic to expect to walk away from the divorce without any responsibility for that debt.

Similarly, if you have invested shared labor, time, and funds into building a successful business together, it is highly improbable that you will be able to retain sole ownership of that entire enterprise without offering some form of compensation or giving up other significant assets in return.

To gain this full understanding, you must meticulously examine all aspects of your finances and assets. This includes, but is not limited to, bank accounts, savings accounts, investment portfolios, real estate properties (your primary home, vacation homes, rental properties), vehicles, any businesses you own, pensions, and retirement accounts like 401(k)s or IRAs.

Don’t forget to consider insurance policies, valuable collectibles, and any other significant possessions. On the debt side, compile a comprehensive list of all outstanding liabilities, including mortgages, car loans, student loans, personal loans, and, as mentioned, credit card balances.

Gathering all relevant financial documents is a critical step in this process. This includes recent bank statements, investment account summaries, tax returns for the past several years, loan agreements, property deeds, business valuation reports (if applicable), and any prenuptial or postnuptial agreements. These documents provide concrete evidence of your financial landscape and will be essential for accurate valuation and equitable distribution. It’s often beneficial to work with legal counsel or a financial advisor at this stage, as they can help uncover hidden assets or debts and provide a professional assessment of your financial position, giving you a stronger foundation for negotiations.

Decide What is Non-Negotiable and What Is Open to Compromise in Your Divorce Case in Virginia

Once you have a comprehensive understanding of your financial landscape, the next crucial step is to identify what truly matters most to you. It’s important to approach this with a realistic mindset.

It is exceptionally rare for one party to achieve every single one of their desired outcomes, unless there’s a significant power imbalance or a clear legal advantage. Because of this inherent give-and-take nature of divorce negotiations, you must be pragmatic in determining your priorities.

Start by categorizing your desires into three distinct groups: what is absolutely non-negotiable, what you are willing to compromise on, and what you genuinely don’t care about or are willing to concede entirely.

Creating a personal inventory or a prioritized list can be incredibly helpful here. For instance, perhaps retaining the family home is your non-negotiable priority, even if it means sacrificing a larger share of a retirement account. Or maybe ensuring primary physical custody of your children is paramount, and you are willing to be flexible on certain financial aspects to achieve that.

Understanding where you can bend and where you must stand firm is not just about strategy; it’s also about managing your own emotional well-being throughout the process. Divorce often involves strong emotions, and it’s easy to let sentiment cloud financial judgment. Try to separate the emotional attachment from the practical value of assets.

Compromise is not a sign of weakness; rather, it is often the most efficient path to a quicker, less contentious, and ultimately less costly settlement. Protracted legal battles are expensive, both financially and emotionally.

A willingness to compromise on certain points can demonstrate good faith and encourage your ex-partner to reciprocate, leading to a more amicable resolution. Mediation is designed to facilitate this kind of compromise, providing a neutral third party to guide discussions and help both parties find common ground.

Division of Assets and Debts

For most couples, especially those who have accumulated substantial assets or built significant net worth over a long marriage, the division of assets and debts represents a cornerstone of the divorce process. This segment requires careful consideration of various financial components.

When examining your debts, it’s helpful to distinguish between secured and unsecured obligations. Secured debts are those tied to a specific asset, such as a mortgage on a house or a loan on a car. Generally, the party who retains the associated asset will also assume responsibility for the secured debt. Unsecured debts, like credit card balances or personal loans, are not tied to a specific asset and therefore offer a bit more flexibility in how they are divided. They might be split equally, or one party might take on a larger share in exchange for a greater portion of an asset.

A crucial distinction in asset division is between marital property and separate property. Marital property includes all assets and debts acquired by either spouse during the marriage, regardless of whose name is on the title. Separate property, on the other hand, typically includes assets owned by one spouse before the marriage, inheritances received by one spouse, or gifts given specifically to one spouse during the marriage. However, separate property can become commingled with marital property if it’s mixed with joint funds or used for marital purposes, complicating its division.

Types of Assets

Let’s delve into specific types of assets:

Real Estate

This often includes the primary residence, but could also encompass vacation homes or rental properties. Options for division include selling the property and splitting the proceeds, one party buying out the other’s share, or, less commonly, co-owning the property for a period (e.g., until children graduate).

Retirement Accounts and Pensions

These are often significant assets, especially in long-term marriages. Dividing them typically requires a Qualified Domestic Relations Order (QDRO), a specialized court order that allows a portion of one spouse’s retirement account to be transferred to the other spouse without incurring immediate tax penalties.

Businesses

If one or both spouses own a business, its valuation becomes a critical and often contentious issue. Options include one spouse buying out the other, or, in rare cases, continued co-ownership.

Investments

This category includes stocks, bonds, mutual funds, savings bonds, and even newer forms of investment like cryptocurrency. These are usually divided based on their current market value.

Personal Property

This covers everything from vehicles and furniture to artwork, jewelry, and other valuable possessions. Often, couples will negotiate who keeps what, with larger items potentially being offset by other assets.

Regardless of the asset type, accurate valuation is paramount. You may need professional appraisals for real estate, businesses, and valuable collectibles to ensure an equitable distribution. If there is one particular asset you are absolutely determined to keep, such as a family heirloom or a beloved property, you may have to achieve this by waiving your rights to other assets of equivalent value, demonstrating the “give and take” nature of the process.

Child Custody in Virginia

For parents, the process of determining child custody and establishing a visitation schedule is frequently one of the most emotionally charged and painful decisions in a divorce. The stakes are incredibly high, as these arrangements directly impact the daily lives and long-term well-being of the children. 

While there’s a myriad of factors to consider in this sensitive area, the single most important guiding principle is always “what is in the best interest of the child.” This principle is what primarily directs the court’s decisions, and if parents present an agreement that does not clearly reflect the child’s best interests, it is highly probable that the court will reject the proposed settlement.

Courts consider numerous factors when determining a child’s best interest. These can include the child’s wishes (depending on their age and maturity), the stability of each parent’s home environment, the physical and mental health of both parents, the child’s special needs, and the existing relationships the child has with each parent. The goal is to ensure the child maintains a strong, loving relationship with both parents, provided it is safe and healthy to do so.

There are generally two main types of custody to consider:

Legal Custody

This refers to the right and responsibility to make major decisions about the child’s upbringing, including education, healthcare, and religious instruction. It can be joint legal custody, where both parents share decision-making authority, or sole legal custody, where one parent has the exclusive right to make these decisions. Joint legal custody is often preferred by courts as it encourages continued parental involvement.

Physical Custody

This determines where the child lives primarily. It can be joint physical custody (also known as shared custody), where the child spends significant time living with both parents (not necessarily 50/50, but substantial time with each). Alternatively, sole physical custody means the child lives primarily with one parent, with the other parent having visitation rights. In rare cases, split custody might occur, where different children live with different parents.

Once custody is determined, a detailed parenting plan or visitation schedule must be established. This document outlines the practical aspects of co-parenting, including regular weekly schedules, holiday schedules (e.g., alternating holidays, Thanksgiving, Christmas), vacation time, transportation arrangements for exchanges, and communication protocols between parents regarding the children. Clear and specific details in this plan can prevent future conflicts and ensure consistency for the children.

It’s also important to briefly consider relocation. If one parent wishes to move a significant distance, it can complicate existing custody orders and often requires court approval, especially if it impacts the other parent’s visitation rights. Finally, your decisions regarding child custody will directly influence any subsequent child support agreement, as the amount of time a child spends with each parent is a key factor in calculating support obligations.

Alimony

Alimony, also known as spousal support or spousal maintenance, is a financial provision made by one spouse to the other after a divorce. While it has become less common in recent years compared to decades past, it is still awarded in many divorces, particularly in cases where there is a significant disparity in the spouses’ earning capacities or where one party has made substantial non-economic contributions to the marriage. It is especially prevalent in marriages where one party sacrificed their career aspirations to serve as a homemaker or primary parent, thereby limiting their ability to become self-sufficient post-divorce.

The primary purpose of alimony is to provide financial support to a spouse who is economically disadvantaged by the divorce, helping them maintain a standard of living similar to what they enjoyed during the marriage, or to become financially independent. It’s not intended as a punishment for one spouse or a reward for the other, but rather as a means to achieve a more equitable financial outcome.

Several factors typically influence whether alimony is awarded and, if so, its amount and duration:

Length of the Marriage

Longer marriages are more likely to result in alimony awards.

Earning Capacity of Each Spouse

The current and potential future income of both parties is a major consideration.

Contributions to the Marriage

This includes both financial contributions and non-financial contributions, such as raising children, maintaining the home, or supporting the other spouse’s career or education.

Age and Health of Each Spouse

These factors can impact a spouse’s ability to re-enter the workforce or increase their earning capacity.

Standard of Living During the Marriage

Courts often aim to allow the receiving spouse to maintain a similar lifestyle, though this is not always feasible.

Financial Needs of the Receiving Spouse

Their reasonable expenses and ability to meet them.

Ability of the Payer Spouse to Pay

The paying spouse’s income and expenses are also taken into account.

Types of Alimony

Temporary Alimony

Awarded during the divorce proceedings, before the final judgment, to help the financially dependent spouse cover living expenses.

Rehabilitative Alimony

Awarded for a specific, limited period to allow the receiving spouse to acquire the education, training, or skills necessary to become self-supporting.

Reimbursement Alimony

Less common, this type compensates one spouse for their financial contributions to the other spouse’s education or career advancement during the marriage.

Permanent (or Indefinite) Alimony

This is the least common type and is typically reserved for very long-term marriages (e.g., 20+ years) or situations where one spouse is unable to become self-supporting due to age, health, or disability. Even when awarded, it may be subject to modification or termination upon certain events, such as remarriage of the recipient or retirement of the payer.

If you hope to receive alimony, you will need to demonstrate your financial need and the other spouse’s ability to pay, as well as your contributions to the marriage. Conversely, if you wish to avoid paying alimony, you might argue that the other spouse is capable of self-support or that your financial circumstances do not allow for it.

Alimony can also be a significant point of negotiation, where a spouse might agree to a lower alimony payment in exchange for a larger share of assets, or vice versa. ong-term financial planning is essential, as permanent alimony is a rare arrangement, and most awards are for a finite duration.

Take the Next Step in Your Divorce Case with Olmstead & Olmstead

You can make the divorce process much easier on yourself by choosing an attorney you trust to guide you through this difficult time. The team at Olmstead & Olmstead is here to provide the legal guidance and support you need to make informed decisions. To learn more about your legal options, call us at 703-361-1555 or reach out to us online.