Dividing property in a high asset Virginia divorce can become an extremely contentious issue. Not only to the two spouses see each asset as a source of important income, but each may attach significant emotional value to each asset.
An understanding of the basic rules for asset division in Virginia can significantly reduce the emotional conflict that is often generated by the property division process.
Individuals with a high net worth often do not understand these rules, but they frequently believe that the rules that apply to individuals with a modest net worth do not apply to them.
This post is an attempt to set out the basic rules of asset division that apply to all Virginia divorces.
The basic rule
Virginia, like most states, uses the “equitable division” model when splitting marital property. This rule requires the court to divide the marital property in the most equitable fashion possible given the entire picture of the couple’s finances.
This rule, which applies to all marriages, does not mean that the court must strive for an equal or 50/50 division of marital assets; rather, the court must ensure that the asset division is fair for both spouses.
Marital v. separate property
The asset division process recognizes two types of property: “marital” and “separate.” Separate property is property that belonged to one spouse prior to the marriage or was acquired by one spouse after the marriage using that spouse’s income or other asset.
A marital asset is an asset that is purchased with income earned or an asset that belonged to both spouses during the marriage. A court can only divide marital property.
Thus, the court’s first task is determining which assets are marital and which are separate. After making this determination, the court must then divide the property according to Michigan’s “equitable distribution” rule.
Factors considered in dividing property
The court has many factors to consider in deciding on an equitable division of marital assets. These factors include:
- each spouse’s monetary and non-monetary contributions to the well-being of the family and to the acquisition, care, and maintenance of the marital property
- the length of the marriage
- the spouses’ age and physical and mental condition
- how and when the spouses acquired the marital property
- each spouse’s debts and liabilities
- the liquid or nonliquid character of all marital property (cash is the most common “liquid” property).
Bad behavior, such as an affair, criminal conduct, or domestic abuse may also affect the court’s decision. Each spouse’s contributions, monetary and non-monetary, to the well-being of the family and to the acquisition, care, and maintenance of the marital property, the length of the marriage, the spouses’ age and physical and mental condition, how and when the spouses acquired the marital property each spouse’s debts and liabilities
The liquid or nonliquid character of all marital property (cash is the most common “liquid” property), and tax consequences of the property
The court will also factor in bad behavior, such as adultery, commission of a crime, or other behavior whether the other spouse was at fault.
The list of factors that can be considered by the trial court in deciding how to divide marital property is very long. Anyone in a high-asset marriage should consider the list of factors very carefully before proceeding to dissolve their marriage.
