Marriages give a couple an opportunity to accumulate wealth and build a secure future if they manage their money well and plan carefully. When separation and divorce occur, property and debts have to be divided appropriately between the marriage partners either by agreement or by the courts, and each person must proceed through life with less than the total financial package he or she had expected to have if the marriage had continued.
The division of assets and debts can have a long-lasting effect on each member of the family and must be done carefully. The law in Virginia governing property division in divorce is called “Equitable Distribution”. It provides for assets and debts that are the fruits of the marriage to be divided fairly. This division can be done by agreement or by a judge based on evidence produced by the parties and based on statutory factors if the parties cannot agree on the division.
Regardless of how an asset is titled, if it was acquired during the marriage, it is presumed to be marital and considered in equitable distribution. This means that even if a house or vehicle or retirement account is in one party’s name and not the other and is not jointly titled, the value of that asset still comes into play in equitable distribution. Some exceptions do exist, and it is important to make an analysis of what there is, whether it is marital or separate or hybrid, what it is worth, whether there are any liens, how it is titled and possessed and what should happen to it.
Marital debts, like assets, need to be divided. They can be split any way the parties agree. If the parties cannot agree, a Court apportions the debt. If there is a lien on the property being divided, the debt will be taken into account when dividing the asset. It is important to know whose name(s) the debt is in and to consider whether that debt should be assumed or refinanced or if the asset should be sold and the lien paid off.
Consulting with an experienced family law attorney can help you better understand what will be treated as marital and will help you formulate options in dividing a marital estate.