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How is “personal effort” factored in when dividing property?

On Behalf of | Aug 11, 2021 | Family Law |

In a Virginia divorce, property division is often a source for dispute. This is especially true in a marriage with substantial assets. Whether it is a high-asset divorce or one of more modest means, both sides may lay claim to either a property that was initially separate. Frequently, they might say they contributed to its increase in value even if they did not acquire it. They will therefore want it to be split between the two. A critical part of determining how to divide property is “personal effort.” The law discusses personal effort and it will be considered when the case is decided upon. The parties should understand this from the outset.

Separate property and personal effort when it is divided

Separate property is that which was brought into the marriage by one of the spouses. If the person owned a business beforehand, then that is theirs. Even if a property was acquired after the marriage, it might still be separate property if it was, for example, an inheritance or was a gift. Still, if the property increased in value and the spouse who did not own it contributed to its increase, then the increase could be declared marital property. With the business, if the spouse who did not own it worked there, or took care of the household so the owning spouse was able to dedicate time and effort to its improvement, then this will be assessed in the context of personal effort.

The non-owning spouse must prove the contribution to the court and that the personal effort was a major factor in its rise in value. It must also show that the separate property did increase in value. When this is shown, the owning spouse might disagree and is obligated to show that the personal effort was not critical to the business growth. Personal effort can be many things including intellectual contribution, creativity, management, formulating a promotional campaign, physical involvement and more.

Personal effort can stoke disagreement with property division in a divorce

Regardless of the perspective, it is important to have guidance with this type of family law situation. If the party who owned the property does not believe that the other person contributed enough to warrant the property being split or the non-owning spouse thinks he or she was a contributor, it is imperative to have assistance from the start. For advice and help, it is useful to consult with those who are experienced in these issues to decide on a path forward.