property division

Question 1

steps for dividing property upon divorce

Answer 1

(1) categorize the assets
- separate property
- marital property

(2) distribute the marital property

Question 2

what is separate property

Answer 2

– acquired prior to date of marriage

– gift or inheritance received by one spouse in their sole name during the marriage

– property acquired after separation

– pain and suffering recoveries

– passive appreciation from separate property = increase in value due solely to passage of time and market forces

[BUT, appreciation during marriage due to effort of either spouse is treated like a marital asset - personal efforts must be significant and result in substantial appreciation of the separate property in order for it to be marital property ]

Ex: At the time of the marriage, John’s equity in the restaurant (separate property) was $50,000. The restaurant is worth a lot more. He’s worked hard to make it one of the hottest restaurants in town, and the equity value in the restaurant is now $250,000. The apprecia- tion—the increase in value between $50,000 when they got mar- ried and the $250,000 on the eve of the divorce—is not passive. It is due to the active efforts of a party and that appreciation is treated as a marital asset.
The restaurant’s equity value would have to be divided with $50,000 (the value before the marriage) being John’s separate property and the remaining $200,000 being marital.

– degree or license

Question 3

marital property

Answer 3

anything that comes into the marital unit during marriage

income from work during the marriage

assets acquired during marriage, no matter who earned it or whose name it is titled in

Question 4

valuation of marital property

Answer 4

determined as of the date of the hearing

Question 5

commingling of assets

Answer 5

when one type of property is contributed to another, the contributed property retains its original classification as long as it is traceable

BUT, if separate property is COMMINGLED with marital property and loses its separate identity, then it becomes marital property

[Ex; if checking acc had some money in it before marriage and then was used for both parties’ income and all family expenses during the marriage, it may be impossible to tell whether any separate property remains]

**newly acquired commingled property is presumed to be marital property unless property can be traced to its original classification by a preponderance of the evidence

Question 6

can marital property ever become separate property?

Answer 6

not absent an express agreement

Question 7

how to value marital property

Answer 7

TIME -
value as of the date of the hearing

BUSINESSES
A flexible case-by-case approach is used in valuing businesses and closely held corporations, taking into account a variety of factors

Question 8

equitable distribution of marital property

Answer 8

(1) each party keeps their separate property

(2) court exercises its discretion to make an equitable distribution of all marital assets by considering ANY FACTOR THAT IS JUST AND APPROPRIATE when making its award

FACTORS
- age/health [difficult to earn money?]
- duration of marriage [one spouse economically dependent?]
- marital fault
- liquid or non liquid character of assets [give low-earner liquid asset so they can sell it if necessary]
– income
– custody of children [might be rational to give custodial parent the family home]
— tax consequences

Question 9

relevance of alimony to property division

Answer 9

none

va courts do not consider alimony for property division

Question 10

how to implement proper division award

Answer 10

(1) in kind
- specific assets to each person

or

(2) cash award
- lump sum or installments

Question 11

how to treat debts for property division

Answer 11

treat them like assets, but give them a negative value

Question 12

pensions

Answer 12

subject to distribution. However, many of the rules governing divisions are dictated by federal law, namely the Employee Retirement and Income Security Act (“ERISA”).

Dividing a pension requires a special type of order from the divorce court that conforms to ERISA law. This order is known as a qualified domestic relations order.

Question 13

divison

Question 14

relevance of a separation agreement

Answer 14

parties can negotiate a separation agreement in writing and sign it

enforceable as long as not based on fraud, not unconscionable, not procured by duress