Distribution of Property
Virginiais an “equitable distribution” state, not a community property state. This means that the courts have flexibility in awarding the division of property. The courts first determine whether property is “marital property,” “separate property,” or part-marital and part-separate property, also called “hybrid property.” Generally, property that is acquired prior to the marriage of the parties, or acquired from a gift or inheritance, is separate property. This is complicated by any secured debt on the property. It is further complicated if debt is refinanced during the marriage. Hybrid property usually involves debt. If property is acquired prior to the marriage, but debt on such property is paid during the marriage, the property will be hybrid property. Debts incurred during the marriage must also be classified. In 2011, the legislature adopted a change in the statute that presumes that debt incurred in joint name is marital whether prior to, or during the marriage, and debts in separate name are presumed to be marital if incurred prior to the final separation. There are other factors to consider as well. It is important to “win” at trial regarding equitable distribution because the trial court has significant leeway. Contact an experienced, knowledgeable and aggressive trial attorney, Wesley D Wornom, Attorney at law.
Property acquired after the final separation of the parties is usually separate property, but may be marital or hybrid property if marital funds are used in its purchase. This rule applies by statute to retirement accounts and annuities of every kind.
Once property has been properly categorized, then the court must value property. The general rule is that property is valued as of the date of trial. The parties often agree to another date, if a case is settled.
Types of property to be divided by the trial court or in an agreement, include federal civilian retirement, such as CSRS or FERS, Thrift Savings Plans for federal civilian employees, 401(k)’s, IRA’s, taxable investment accounts, such as mutual funds or brokerage accounts, as well as real estate, vehicles and bank accounts.
Many persons erroneously believe that the federal law provides automatic benefits to them as a spouse. This is not the case. All federal civilian retirement accounts must be divided by the trial court. It is vital to have an attorney that is familiar with the civilian benefits in order for you to seek your fair share of such benefits, or if you are the civilian employee, to minimize your legal exposure.
Division of all retirement accounts requires a particular form of orders. For non-federal employees, these orders are referred to as Qualified Domestic Relations Orders, or QDRO’s. The orders dividing retirement accounts for federal employees may be referred to as QDRO’s but they are actually different types of orders, and require familiarity with the CSRS or FERS, the United States Code, the Code of Federal Regulations, and Virginia Law.
Division of property requires consideration of property and income tax issues.
Contact Wesley D. Wornom, Attorney at Law for experience, knowledgeable legal advice for cases involving civilian employees.