When a couple goes through a divorce, in most cases, their marital assets and marital debts must be divided between them. In Virginia, like many other states, marital assets and debts are divided according to the principle of equitable distribution. This concept means that the couple’s marital estate is not presumptively split down the middle, but divided between the partners according to what the court deems appropriate and equitable based on their unique facts of each individual case.
Absent a specific exception or extenuating circumstances, not all assets are divided in a divorce, just all marital assets. In most cases, separate assets remain with their original owners. Things become more complicated when a third category of assets is created: hybrid assets. These are the assets that are comprised of both separate assets (for example a pre-marital bank account) and marital assets (for example contributions to said bank accounts during the parties’ marriage) and which changed in value due during the marriage.
Separate assets are assets held by only one partner or those which were acquired prior to the marriage or following a final separation of the parties. Typically, they are assets obtained prior to marriage, but they can include gifts and inheritance one partner obtains while married.
Marital assets are the assets obtained during the couple’s marriage or those in which marital contributions where made. Marital assets are subject to division in a divorce. Examples of marital assets include:
- The couple’s home and other real estate they purchased together;
- Joint savings accounts;
- Joint retirement accounts; and
- Purchases made with shared credit cards and other shared funds.
Marital debts, such as joint credit card debt, are also subject to division in a divorce.
As explained above, hybrid assets that contain both separate and marital components. These assets can be difficult for the court to parse for a couple’s divorce because of their unique status. Examples of hybrid assets include:
- A home purchased by one partner prior to marriage that increased in value during the marriage due to the spouse’s renovations, maintenance, and financial contributions toward the mortgage;
- A savings account that increased in value due to a spouse’s marital contributions from earned income; and
- A small business operated by one partner that increased in value due to the spouse working to develop it (note: business interests require a more comprehensive analysis including but not limited to personal goodwill and other considerations).
Dividing Assets in your Divorce
Although separate assets usually are not divided, they can be considered by a court when they have mutually benefited the couple. Further, a court can order that a monetary award be paid from separate property in order to offset certain marital assets and/or debts. Similarly, separate assets that become hybrid assets may be partially subject to division in a divorce.
When the court divides marital assets, it considers a variety of factors including, but not limited to, the individuals’ income and separate assets, the length of their marriage, and each partner’s projected financial needs.
Work with an Experienced Great Falls Divorce Lawyer
When you divorce your spouse, your marital and hybrid assets must be divided appropriately. To learn more about the property division process before you file for divorce, schedule a legal consultation with an experienced divorce lawyer. Get started with our team at Roop Xanttopoulos Babounakis, PLLC today by contacting our office to set up your initial consultation.