Source: https://rooplaw.com/resource-center/virginia-family-law-divorce-faqs/division-assets-debts-faqs/
Timestamp: 2019-04-20 21:04:25+00:00

Document:
What is the name given to the process by which a Virginia court divides the assets of a married couple?
Are accounts or assets that are solely titled in one spouse’s name subject to Equitable Distribution?
Answer: Yes. Generally speaking, the critical aspects regarding property involves not title but rather the source of funds used, and the time property is acquired.
(The term “equitable distribution” is actually something of a misnomer: under the terms of the statute the only property that can literally be divided or “distributed” is property in the parties’ joint names. The parties’ legal interests in property that is not jointly titled, but is defined as marital under the rules described below, are resolved through the mechanism of a monetary award, i.e., a money judgment payable by one party to the other.
Property acquired after the parties’ final separation.
Property is maintained during the marriage as separate property.
Passive income or growth of separate property.
Answer: Anything that is not separate property.
Property titled in the names of both parties, unless it was not a gift and is traceable to separate property.
Property acquired during the marriage prior to separation.
Increase in the value of separate property if the increase is material and is due to significant marital efforts.
Answer: Property that started as separate property but was commingled during the marriage with marital property or “transmuted” in part to marital property (e.g. a business interest acquired before the marriage that significantly increases in value due to substantial marital efforts).
Is separate property divisible by a court?
Answer: No, once classified as separate, the separate property is 100% that of the owner.
Answer: Yes, in part. That property classified as marital within hybrid property is divisible; however, that property classified as separate within hybrid property is indivisible.
What are the factors the court considers in dividing marital property?
The court must consider all of these factors when making an equitable distribution award; however, it does not need to discuss how it considered each one in its opinion, and in its discretion, the court can give more or less weight to any specific factor. See Barker v. Barker, 27 Va. App. 519 (1998).
If a spouse comes into the marriage with interest in a business entity, does that business interest remain separate property or can it become marital? Does the fact that the separate business interest benefitted the family affect the outcome?
Answer: Interest in a business entity acquired before the marriage starts as separate property; however, the asset may be transmuted into hybrid property if the asset is commingled with marital property or if the other spouse made significant personal efforts and/or monetary contributions to the business prior to separation, which efforts substantially improved the value of the business.
Is the marital share of a business interest required or presumed to be split equally?
Answer: There is no presumption that marital assets must be split evenly between the parties. Matthews v. Matthews, 26 Va. App. 638 (1998). In fact, where one spouse’s business is considered a marital asset, the non-owning spouse typically receives less than 50% of that business interest upon divorce. One factor in a number of situations is the illiquidity of the business interest. The exact percentage of the division of a business interest depends completely upon the trial court’s discretion and how it considers the enumerated factors in VA Code § 20-107.3(e).
What is the standard of value/method of valuation employed by the court in ascertaining the value of a spouse’s business interest?
Answer: Historically, Virginia courts have used numerous and inconsistent methods to value business interests. Such terms as value, fair value, fair market value and the like have been used. The Court of Appeals, in Bosserman v. Bosserman, 9 Va. App. 1, 384 S.E.2d 104 (1989) which involved an ownership interest in a real estate holding company, set forth a definitive standard of value – intrinsic worth – stating, “Trial courts valuing marital property for the purpose of making a monetary award must determine from the evidence that value which represents the property’s intrinsic worth to the parties upon dissolution of the marriage.” In Bosserman, the Court of Appeals, in approving the business valuation of the spouse’s expert, affirmed the trial court’s rejection of the value of the stock set forth in corporate bylaws.
In Howell, the Court noted that shareholder or partnership agreements should be considered by the Court (and impliedly by the valuators), but not treated as conclusive. In general, then, intrinsic value is the going-concern value in the hands of the owner.
What is the preferred date of valuation?
Can the court use an alternate valuation date?
Answer: Yes. Under Va. Code § 20-107.3(A), instead of using the standard evidentiary hearing date as the valuation date of marital property, the court may, “on good cause shown,” order that an alternate valuation date be used. Where one party moves the court to use an alternate valuation date, that party bears the burden of proving “good cause.” Kaufman v. Kaufman, 7 Va. App. 488, 499-500 (1988).

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