Equitable Distribution in Virginia: Step #2…What’s ‘Equitable’?
In our last posting (“Equitable Distribution…Step #1”), we talked about identifying “marital” and “separate” property. We’ll get into more nitty-gritty about “marital” and “separate” property in later articles, but we wanted to give an overview of the next step: “Equitable Distribution.”
Virginia is an “equitable distribution” state which means that marital property is divided “equitably”. But what does “equitable” mean? “Equitable” does not mean 50/50; it means “fair”.
“Fair” is largely a subjective idea. We often say that “fairness is in the eye of the beholder”. If you have a teenager, you probably already know that your opinion is generally never “fair”. In the litigation setting, a judge will decide what’s “fair”. If you’re mediating, the two spouses or partners are the only decision-makers. Finding a “fair” result is up to the people mediating.
In Virginia, there is a statute (Virginia State Code § 20-107.3(E)) that gives courts a list of factors to apply when determining what’s equitable when it comes to property distribution. Here is the list of factors straight from the statute (as of 7/1/2013):
- The contributions, monetary and nonmonetary, of each party to the well-being of the family;
- The contributions, monetary and nonmonetary, of each party in the acquisition and care and maintenance of such marital property of the parties;
- The duration of the marriage;
- The ages and physical and mental condition of the parties;
- The circumstances and factors which contributed to the dissolution of the marriage, specifically including any ground for divorce under the provisions of subdivisions (1), (3) or (6) of § 20-91 or § 20-95;
- How and when specific items of such marital property were acquired;
- The debts and liabilities of each spouse, the basis for such debts and liabilities, and the property which may serve as security for such debts and liabilities;
- The liquid or non-liquid character of all marital property;
- The tax consequences to each party;
- The use or expenditure of marital property by either of the parties for a non-marital separate purpose or the dissipation of such funds, when such was done in anticipation of divorce or separation or after the last separation of the parties; and
- Such other factors as the court deems necessary or appropriate to consider in order to arrive at a fair and equitable monetary award.
The first factor on the list tends to get a lot of attention. The courts recognize that spouses can contribute to property in different ways other than “who made the money” or who “bought the item.” It is not extraordinary for a court to value a “non-working” spouse’s contribution to the marriage as equivalent to the contributions of “working” spouse.
Many “soon-to-be-ex” spouses will look at the fifth factor and think that the equitable distribution process will punish a spouse for messing up the marriage. They imagine that “well, if the judge would have divided everything 50/50, when the court finds out what my spouse did, there’s no way that I won’t receive more than half!” To these scorned spouses’ surprise, this is not necessarily the case. Generally, a court’s finding of general “fault” for the dissolution of the marriage is not enough for that “fault” to be considered a factor in the distribution of assets; the court will look further to see how the “fault” actually affected the assets and liabilities as they exist now.
As we mentioned, in mediation, you get to decide what’s “fair”. While a court must review all the factors, in mediation, you will decide what’s “fair” and whether some or all (or none!) of the factors will be part of the discussion. Knowing what a court might be considering can help guide your conversation—if you both want it to.
It’s VERY important that you don’t think of Resolution Point’s articles as “legal advice”. Our goal is to get you familiar with some of the ideas with very broad strokes. Please consult with an attorney to determine how any of this may affect your actual situation.