11.8 Equitable Distribution

• Library: Virginia Law and Practice: A Handbook for Attorneys (Virginia CLE) (2020 Ed.)

11.8 EQUITABLE DISTRIBUTION

11.801 Court's Authority. Va. Code § 20-107.3 grants the court power to divide or transfer jointly owned marital property, make monetary awards, and apportion marital debts according to certain enumerated factors in Va. Code § 20-107.3(E).

There are three basic steps courts follow in making an equitable distribution award. The court first classifies the property as separate, marital, or part separate and part marital. The court then values the property. Finally, the court distributes the property taking into consideration the Va. Code § 20-107.3(E) factors. ⁸⁰

11.802 Marital Versus Separate Property.

A. Division or Transfer of Property or Debt. Except for a limited number of situations dealing with pensions, profit-sharing plans, and other retirement benefits the court has no authority to order the division or transfer of separate property or marital property, or separate or marital debt, which is not jointly owned or owed. ⁸¹ In 2016, Va. Code § 20-107.3(C) was

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amended to clarify that a court may order the transfer of separate property to the owning spouse from the possession of the nonowning spouse.

B. Monetary Award. However, even though the court cannot order the transfer or division of property and debt that is not jointly titled, both parties are deemed to have rights and interests in the marital property. Accordingly, the court has the authority to order a monetary award to compensate a spouse for his or her interest in marital property that is not jointly titled. ⁸²

A monetary award may be payable either in a lump sum or over a period in fixed amounts. A monetary awarded constitutes a judgment within the meaning of Va. Code § 8.01-426 and is enforceable in the same manner as any other money judgment. However, it will not be docketed by the clerk unless the decree so directs. The provisions of Va. Code § 8.01-382 relating to interest on judgments shall apply unless the court orders otherwise. ⁸³

C. Marital Property. Va. Code § 20-107.3 provides that marital property is

(i) all property titled in the names of both parties, whether as joint tenants, tenants by the entirety or otherwise, except as provided by [Va. Code § 20-107.3(A)(3)], ⁸⁴ (ii) that part of any property classified as marital pursuant to [Va. Code § 20-107.3(A)(3)], or (iii) all other property acquired by each party during the marriage which is not separate property as defined [in Va. Code § 20-107.3(A)(1)]. ⁸⁵ All property including that portion of pensions, profit-sharing or deferred compensation or retirement plans of whatever nature, acquired by either spouse during the marriage, and before the last separation of the parties, if at such time or thereafter at least one of the parties intends that the separation

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be permanent, is presumed to be marital property in the absence of satisfactory evidence that it is separate property. For purposes of this section marital property is presumed to be jointly owned unless there is a deed, title or other clear indicia that it is not jointly owned. ⁸⁶

D. Separate Property Va. Code § 20-107.3 provides that separate property is

(i) all property, real and personal, acquired by either party before the marriage; (ii) all property acquired during the marriage by bequest, devise, descent, survivorship or gift from a source other than the other party; (iii) all property acquired during the marriage in exchange for or from the proceeds of sale of separate property, provided that such property acquired during the marriage is maintained as separate property; and (iv) that part of any property classified as separate pursuant to [Va. Code § 20-107.3(A)(3)]. ⁸⁷ Income received from separate property during the marriage is separate property if not attributable to the personal effort of either party. The increase in value of separate property during the marriage is separate property, unless marital property or the personal efforts of either party have contributed to such increases and then only to the extent of the increases in value attributable to such contributions. The personal efforts of either party must be significant and result in substantial appreciation of the separate property if any increase in value attributable thereto is to be considered marital property. ⁸⁸

E. Part Marital and Part Separate Property. Property can also be classified as part marital and part separate. ⁸⁹

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Income received from separate property during the marriage is marital property to the extent it is attributable to the personal efforts of either party. The increase in value of separate property during the marriage is marital property to the extent that marital property or the personal efforts of either party have contributed to the increases. The personal efforts must be significant and must result in substantial appreciation of the separate property. The nonowning spouse has the burden of proving that contributions of marital property or personal efforts were made and that the separate property increased in value. ⁹⁰

The marital share of a pension or other retirement benefit is marital property. The marital share is the portion of the retirement plan that was earned during the marriage and before the last separation of the parties. ⁹¹

Personal injury or workers' compensation recoveries may be part marital property. ⁹²

When marital property and separate property are commingled resulting in the loss of identity of the contributed property, the classification of the contributed property is transmuted to the category of property receiving the contribution. However, to the extent the contributed property is retraceable by a preponderance of the evidence and was not a gift, the contributed property will retain its original classification. ⁹³

When marital property and separate property are commingled into newly acquired property resulting in the loss of identity of the contributing properties, the commingled property is transmuted to marital property. However, to the extent the contributed property is retraceable by a preponderance of the evidence and was not a gift, the contributed property will retain its original classification. ⁹⁴

When separate property is retitled in the joint names of the parties, the retitled property is transmuted to marital property. However, to

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the extent the property is retraceable by a preponderance of the evidence and was not a gift...