Settling a divorce case in Virginia, where one of the parties owns a business, can be extremely challenging. Businesses are considered “property” and, just like a house or a retirement fund, are divisible upon divorce. Therefore, in a mediated divorce settlement, the value of a family business must usually be quantified in order for both parties to make informed decisions with regard to which party retains which asset/liability post-divorce.
In Virginia, a couple seeking divorce must live separate and apart for one year when they have minor children. With no kids, 6 months is the rule. . . . but only if that couple also has a properly drafted and signed Property Settlement Agreement (PSA).
The required period of separation was intended, by the lawmakers, to mean that the husband and wife would actually live in separate residences.
Terms of a Property Settlement Agreement (PSA)
A Property Settlement Agreement (PSA) is a contract between a married couple that sets out the terms of how they will move forward in their lives, during separation and divorce, in the following areas:
Parenting Arrangements (also known as Custody & Visitation) – Sets forth the schedule of custodial care.
The Internal Revenue Code has changed as of December 22, 2017. For up-to-date information call Robin at (571) 220-1998.
Alimony is a creature of both State and Federal Law: Spousal support, also known as alimony, is governed by a combination of state and Federal law.
For many years, the courts and bar have been trying to figure out the best way to equitably (i.e. “fairly”) divide and distribute the equity value of a divorcing couple’s residence (and other real estate) when there has been a commingling of marital and separate (non-marital) funds. Once property has been “commingled”, it is usually looked upon, by Virginia Courts, as “hybrid property” (part separate, part marital property). Hybrid property questions, when it comes to the marital residence and real estate in general, often arise in the following situations:
If one party uses his or her pre-marital cash as the down payment on the marital residence, does he or she get that money back when there is divorce?
If the party making the down payment, out of premarital money, is to get that money back in a divorce, is there a fair calculation available to figure out how much that original down payment is worth today?
How is money earned during the marriage, which is used to pay the monthly mortgage bill (plus homeowner’s insurance and real estate taxes) accounted for when the equity value of the marital residence is divided and distributed in a divorce?
How are improvements to the marital residence accounted for?
What is the effect on the division and distribution of the equity in the marital residence, upon divorce, if one party uses his or her separate (non-marital) funds to pay for improvements to the residence?
What happens when one party owns a home prior to the divorce, which is then utilized by the parties as their marital residence and, while the parties are married, the mortgage, etc.
THE DEFINITION of EQUITABLE DISTRIBUTION – NOT 50%/50%
Equitable Distribution is the legal term for how judges, in Virginia (and 39 other states), divide and distribute property and debt in a divorce. “Equitable” means “fair”, not “equal”. . . so you know you are in some tricky territory right there.