Date Of Separation – Effect on Property Distribution – Virginia

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In a Virginia Divorce, Judges Only Divide Marital Assets Acquired Before Separation

In a Virginia divorce, judges have the power to divide and distribute assets and debts that were acquired during the marriage, known as “marital property” (a legal classification). The term “during the marriage” is defined as beginning at the date of the couple’s marriage and ending at their date of separation (not the date of divorce, as most people believe).

Judges, in a Virginia divorce, do not have the power to divide and distribute assets and debts which were not acquired during the marriage, known as “separate property” (a legal classification). The term “separate property” includes assets and debts acquired prior to the marriage, after the parties’ date of separation, and acquired by inheritance or gift. This article focuses on assets and debts acquired post separation.

Virginia Law Creates a Lot of Litigation Related to Date of Separation

Because Virginia law does not permit judges to divide and distribute assets and debts (with some exceptions) acquired after the parties’ date of separation, the stage is set for a lot of litigation. When there is big money or big debt -- and the parties are living under the same roof during all or a portion of their mandatory period of separation -- it is common for one of them to claim that they were not, in fact, living their lives separate and apart from one another.

Since the law is not clear as to what “living separate and apart means”, and since Virginia allows divorcing couples to stay under the same roof during their separation time, the divorce lawyers are getting richer and richer. A lot of time is spent in court by attorneys trying to prove that their client was or was not separated, at a particular time, depending on what is in that client’s best financial interest.

Why Would a Couple Choose to Live Under the Same Roof During Their Period of Separation?

There are three primary reasons that couples continue to live under the same roof during their period of separation in a Virginia divorce:

1. They cannot afford to move out, but they want to get divorced as soon as possible. They use the separation period to do their best get their financial ducks in a row before they divorce;
2. They aren’t ready to break the news to their children that they are splitting up; and
3. Their attorneys have advised them that, if they move out, they are creating possible evidence for desertion and abandonment, which is a fault ground for divorce in Virginia. Fault-based divorces are expensive, time-consuming, confusing, and ugly.,

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What is the Remedy if you Want a Clear Date of Separation?

The most foolproof method of assuring a particular date of separation is to sit down with a mediator, or your lawyers, and (a) settle all matters in your case; and (b) reduce your settlement terms to a written Marital Settlement Agreement and MSA, signed and notarized. That PSA will not only clarify who gets what and who pays what, but it will also set forth your agreed date of separation. Problem solved.

What Specific Types of Property and Debt are Affected by Virginia’s Post Separation Rules?

The most common assets and debts that lead couples to fight over the date of separation are:

1. Retirement Assets - Contributions made after the date of separation
2. Real Estate Equity - Contributions made toward the principal (not usually interest or real estate taxes)
3. Credit Card Debt - Mostly when there is a dispute as to whether that debt was for personal, versus marital/family, purposes
4. Savings Accounts - Mostly when assets were deposited during a time period that other party was suffering financial hardship

Husbands and wives often clash over their date of separation in an effort to segregate assets and debts into their individual side of the spreadsheet, depending on what is best for that spouse’s bottom line.

How Can Couples Avoid the Pitfalls of Virginia Law Related to Post-Separation Assets & Debt Distribution?

Mediation is one of your best remedies if you see a squabble coming over the date of separation in your Virginia divorce. In mediation, clients can create their own rules.

In a Virginia divorce mediation, clients agree on their date of separation. That date is used to determine when they are eligible for divorce. However, they do not have to apply that date to their various assets and debts. They have choice in the matter.

Some clients choose to apply the date of separation to their retirement assets, but not to the equity in their home. Some choose to apply the date of separation to their bank accounts, but not to their retirement accounts. Some choose the date of their first mediation as the “separation date”, for the purpose of dividing and distributing their assets, even if they have been separated for years. When you mediate, it is up to you whether to apply Virginia law -- or to not apply Virginia law -- to the division and distributions of your assets and debts. Only judges have to follow Virginia these laws. Not divorce couples in a mediation.

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