Family law courts aim to split assets fairly, rather than equally, unless that is what the judge determines is fair in a divorce. This process can become particularly intricate when multiple properties are involved during a high-asset divorce, and this leads some to wonder how multiple properties are managed during such a divorce.
Differentiating marital from separate property
The first task in property division is distinguishing between marital and separate property. Generally, any asset acquired during the marriage, regardless of whose name is on the title, is considered marital property and is subject to division. On the other hand, separate property includes assets owned by one spouse before marriage or acquired individually as a gift or through inheritance. This distinction is essential because only marital property is subject to equitable distribution.
Once properties are classified, they must be accurately valued. This often means enlisting a professional appraiser to determine each property’s fair market value as the court relies on these valuations to guide an equitable split. An accurate valuation is critical, especially in cases involving multiple homes or investments, as it ensures fairness in dividing the marital estate.
Applying equitable distribution
Virginia courts consider several factors when dividing property, including the duration of the marriage, each spouse’s contributions (financial and non-financial) and their economic standing. In some cases, the court may allocate certain properties to each spouse individually or order the sale of specific properties and split the proceeds.
Taxes are another key consideration, especially when it comes to real estate. Selling or transferring properties can lead to tax liabilities, which need careful planning. Collaborating with a financial expert, like a CPA, can help you understand these implications and minimize any financial impact, especially if you are negotiating with your soon-to-be ex-spouse prior to the divorce proceedings.
Special factors in high-asset divorces
For couples with significant assets, multiple properties, such as primary residences, vacation homes and investment properties, add extra layers of complexity. Each type of property may be treated differently depending on its use and value. For example, a vacation home might be viewed as a luxury asset and divided differently than the primary residence.
In Virginia, managing multiple properties in divorce requires a nuanced approach. By understanding marital versus separate assets, securing accurate valuations and considering tax effects, spouses can navigate property division with greater clarity and confidence.