Under Virginia law, the property distribution and debt allocation scheme used to classify, value, and divide assets is called “equitable distribution.” “Equitable Distribution” does not necessarily mean “equal” or “50/50” distribution; rather, it refers to a mechanism to effectuate a fair distribution of assets and debts between two separating spouses. While oftentimes the parties agree to divide their assets and debts equally, or the Court will award 50% of the marital assets to each spouse, and order each spouse to pay 50% of the debt, that is not always the case. In certain circumstances one party will be entitled to more of the assets than the other, for example where one spouse has contributed his or her “separate property” to acquire a home or make an investment. Because there are many factors to consider under Virginia law in determining distribution of property and debt pursuant to a divorce, and because these issues may involve very valuable assets such as the family home, investments, or retirement/pension benefits, it is crucial that those issues be analyzed in a thorough manner by a Virginia divorce attorney who has experience with both simple and complex property and debt division in Virginia.
Property issues may be resolved by agreement between the parties themselves, which is then set forth in a written document. Should the parties be unable to agree on how to divide their assets and debts, the issue will be determined by the Court at an Equitable Distribution Hearing.
At that hearing, the judge will hear evidence from each side, and will make a final ruling regarding the value of the parties’ assets and debts, their classification (“marital”, “separate” or “part marital and part separate”), and how to divide the marital assets and marital debts. Under Virginia law, the Court must follow the factors set forth in Virginia Code Section 20-107.3, in making an equitable distribution of property and debt.