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Property division is often the most consequential part of a Virginia divorce. I represent spouses in Fairfax, Loudoun, and other Northern Virginia courts in contested property cases, including cases involving a marital residence or investment real estate, retirement and deferred compensation, a closely held business, and money that one spouse says was always separate. The outcome usually turns on proof assembled long before trial: account records, deeds, valuations, and a clear account of where the money came from and where it went.
I am Jason A. Weis, an attorney with Curran Moher Weis in Fairfax. I clerked at the United States Tax Court, and I have bought, operated, and sold businesses of my own. I bring that financial background to the classification and valuation questions that decide these cases.
Virginia Divides Property by Equitable Distribution
Virginia is not a community property state. Property is divided under Virginia’s equitable distribution statute, Va. Code § 20-107.3. The statute does not call for an equal division. The court decides the division after considering the factors the statute lists. The process has three steps.
- Classification. The court determines which property is separate, which is marital, and which is part separate and part marital. It does the same for debts.
- Valuation. The court values the property as of the date of the evidentiary hearing. On a motion made at least 21 days before that hearing, the court may, for good cause, use a different valuation date.
- Division. The court divides the marital estate after considering the statutory factors, by dividing or transferring jointly owned property, by a monetary award, or both.
Separate, Marital, and Part of Each
Separate property includes property acquired before the marriage; property received during the marriage by gift from a third party or by inheritance; and property acquired in exchange for separate property, if it is kept separate. Marital property includes property titled in both names and other property acquired during the marriage that is not separate. Property acquired during the marriage and before the last separation is presumed to be marital unless there is satisfactory evidence that it is separate. Va. Code § 20-107.3(A); Lambert v. Lambert, 6 Va. App. 94 (1988).
Most contested cases are fought over the middle category, property that is part of each.
- Commingled funds. A spouse who deposits separate money into a joint account can keep it separate only by proving, by a preponderance of the evidence, the separate contribution and a direct trace to the asset claimed. Rahbaran v. Rahbaran, 26 Va. App. 195 (1997). The presence of other deposits and withdrawals in the same account does not by itself defeat the trace. Holden v. Holden, 31 Va. App. 24 (1999). Records decide these claims. See depositing separate money into a marital account.
- Growth in separate property. An increase in the value of separate property during the marriage stays separate unless marital property or the personal efforts of either spouse contributed to it, and then only to the extent of that contribution. Personal efforts count only if they were significant and resulted in substantial appreciation. Va. Code § 20-107.3(A)(1); Martin v. Martin, 27 Va. App. 745 (1998) (en banc). Passive market growth is not enough.
- Retitled property. Putting separate property into joint names does not, by itself, make it a gift to the marriage. The spouse claiming a gift must prove it by clear and convincing evidence, and the deed itself may carry that burden. Utsch v. Utsch, 266 Va. 124 (2003).
The Factors the Court Weighs
Once property is classified and valued, the court divides the marital estate after considering the factors in § 20-107.3(E). They include each spouse’s monetary and nonmonetary contributions to the family and to the acquisition and care of the marital property; the length of the marriage; the ages and health of the parties; how and when specific property was acquired; the debts of each spouse; the liquidity of the property; the tax consequences; and the circumstances that led to the end of the marriage. The court also considers the use of marital property for a separate purpose, or its dissipation, in anticipation of divorce or after the separation.
Fault is one of those factors, but it is not a license to punish. Fault “is not a ‘wild card’ that may be employed to justify what otherwise would be an arbitrary or punitive award.” O’Loughlin v. O’Loughlin, 20 Va. App. 522 (1995). See fault grounds for divorce in Virginia.
The Assets That Drive High-Stakes Cases
The marital residence and investment real estate. While the case is pending, the court may award one spouse exclusive use and possession of the family residence. Va. Code § 20-103. At the end of the case, the court may divide or transfer jointly owned marital property, including real estate. Whether to keep the house, buy out the other spouse, or sell depends on its classification, the equity, the mortgage, and the tax consequences. See who gets the house in a Virginia divorce.
Retirement and deferred compensation. The portion of a pension, 401(k), IRA, or deferred compensation plan earned during the marriage and before the last separation is presumed to be marital property. The court may direct payment of a percentage of the marital share of a pension, but no such payment may exceed 50 percent of the marital share of the cash benefits actually received. Va. Code § 20-107.3(G)(1). See pensions, 401(k)s, and IRAs in divorce. Military retired pay has its own federal rules; see military divorce in Virginia.
Businesses and professional practices. The value of a business, the owner’s true income, and whether the interest is separate, marital, or part of each are usually all contested. A buy-sell agreement that limits what an owner could receive is relevant to value but does not control it. Bosserman v. Bosserman, 9 Va. App. 1 (1989). See how Virginia courts value closely held businesses and business owner and professional-practice divorce.
Executive compensation. Stock options, restricted stock, and bonuses raise questions of when the compensation was earned and how to divide awards that vest after separation. See how executive compensation is divided.
Debt. The court classifies debts as separate or marital, determines their amount as of the date of the last separation, accounts for changes through the hearing, and apportions the marital debt under the same factors. See dividing debt in divorce.
Agreements
Spouses can resolve property division themselves in a written property settlement agreement, and a valid premarital agreement may already govern it. A negotiated agreement is strongest when it rests on full financial disclosure and a clear understanding of what a court would likely do. See property settlement agreements in Virginia and prenuptial agreements in Virginia.
Frequently Asked Questions
Is Virginia a community property state?
No. Virginia uses equitable distribution under Va. Code § 20-107.3. The court divides marital property after considering the statutory factors.
Will our property be split 50/50?
Not necessarily. The statute does not require an equal division. The result depends on the classification and value of the property and on the factors in § 20-107.3(E).
I owned my house, or inherited money, before or during the marriage. Is it mine?
It may be separate property, but its character can change. Separate property can become marital, or part marital, if it was mixed with marital funds, retitled, or increased in value through marital contributions or significant personal effort. The answer depends on the records.
As of what date is property valued?
Ordinarily the date of the evidentiary hearing on valuation. The court may use a different date for good cause, on a motion filed at least 21 days before the hearing. Debts are measured as of the date of the last separation, with changes through the hearing taken into account.
Does adultery affect how property is divided?
It can. The circumstances that led to the end of the marriage, including a fault ground, are one of the statutory factors. Fault is weighed with the others; it does not override them.