Dividing the Assets
A major consideration of divorce is how you are going to divide your property. In Virginia, this is considered equitable distribution.
The Breakdown of Equitable Distribution
Equitable distribution is done by, No. 1, identifying your property, then classifying your property, and, finally, dividing your property. Identifying your property is anything that was acquired from the date of marriage until the date of separation, which would include real estate, retirement accounts, 401K’s, bank accounts and personal property such as a couch or a car.
The Classifications of Equitable Distribution
The court will identify this property into three different classifications. The first one is a martial classification, which is anything that was acquired from the date of the marriage up until the date of separation. The next is the separate classification, which is anything that was acquired prior to the marriage after the date of separation or as a gift from someone other than your spouse during the marriage. The last classification is the hybrid property one. Hybrid property is a mixture of separate and marital. What I often find is hybrid property can be a 401K, or, perhaps, one of the spouses was employed by a company before the marriage and so contributed to a 401K before the couple actually got married, contributed to it during the marriage but then separated so the part that was contributed before the marriage is considered that person’s separate property and the part that was contributed during the marriage itself is considered marital property.
The court is not required to divide up your property 50-50. This is not a presumption in Virginia; it is in other states. What the court does, instead, is balances several factors that include the age, physical and mental conditions of the parties, the decisions made during the parties as to who was going to work outside of the home, who is going to work inside the home, and tax consequences to the parties concerning dividing up of the property. In the end, the court will balance these factors and then make an equitable distribution. More times than not it ends up being an equal 50-50 distribution but that’s not always the case.
How the issue of equitable distribution effects the divorce is dependent on each case and the route that the litigants are choosing to take. If the parties agree they want to come together and draft an agreement determining how their property is to be divided, then they can do that without any implications from the court. This gives them the control of being able to say, “I want to sell the house and split the proceeds,” or “I have sufficient assets to be able to buy my spouse out of the house so I’m going to keep the house and pay my spouse a portion of the equity.”
When the parties can’t make a decision about how to divide their properties they must submit it to the court to make a determination and that is a scary prospect because if the judge is the one making the determination, the very worst case scenario is the judge can order that all of the property be sold, including houses, personal property, cars, and the proceeds from the sales be divided.
How Retirement Accounts and 401K’s Differ
This does not happen in terms of retirement but if you submit an issue to the court in terms of retirement or a 401K then the court is going to demand that an order is entered dividing up the marital share of that retirement or 401k. If you have more control over it, you’re going to know what is going to happen in the end. If you’re going to submit it to the court, you’re not going to know until the judge makes his or her decision. After that, both scenarios, whether you have an agreement or whether you submit it to the court, equitable distribution becomes a part of your final decree of divorce because the court is required to consider that to grant a divorce.
Hire an Experienced Law Firm to Help with Equitable Distribution
The attorneys at Mahoney & Richmond are well-versed with the issues of equitable distribution whether you have high asset distribution, such as value in a marital business, or whether you own a house and some cars and doing something that is a little bit less complicated. But M&R’s family law attorneys are well-equipped to help you in this situation and provide you guidance that you need to get you to the finish line.