Virginia Equitable Distribution: Courts Aren’t Stupid

Assume an agreement states: “The parties shall apply any and all remaining proceeds from the sale of the Dey Street [P]roperties toward the principal balance of the mortgage obligations on Shady Oaks . . . If the mortgages are satisfied prior to the sell [sic] of Shady Oaks, the parties will divide equally any and all proceeds from the sale of Dey Street [P]roperties.”  Assume that Shady Oaks properties were sold to pay off their mortgages.  Assume that the Dey Street Properties are sold thereafter.  What should happen to the Dey Street proceeds? Continue reading

Virginia Military Pensions: Be Sure to Ask Questions

In Epps v. Epps, Record No. 1077-14-1 (Va. Ct. Appeals 2015), the appellate court described how our circuit courts go about dividing up marital property:

“First, upon a request of either of the parties, the circuit court “must classify the property as either separate or marital. The court must then assign a value to the property based upon evidence presented by both parties. Finally, the court distributes the property to the parties, taking into consideration the factors presented in Code § 20-107.3(E).”

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Virginia Equitable Distribution: The Strange Burden of Giving

John Smith buys a house before he gets married to Jane Doe.  John then gets married to Jane.  He wants his to become theirs.  She wants hers to become theirs.  So they open joint bank accounts.  They consolidate their finances.  And he deeds the house into their joint names.  But their love dwindles.  They separate.  And they file for divorce.  So what happens to the house?  Does John get to keep all of the equity in in the property because he owned it before the marriage?  Or does Jane get an equitable share in the equity because she clearly owns the property, too? Continue reading

Virginia Divorces: The Need for Specificity in Settlement Agreements

Quinn v. Irons, Record No. 0851-14-4 (Va. Ct. Appeals 2014) is a case that never should have existed but for a perfect storm of misunderstanding.  In that case, the parties entered into a marital settlement agreement, while represented by legal counsel, at the end of an arbitration.  The marital settlement agreement included a section entitled “College Savings Accounts,” which provided: Continue reading

Virginia Equitable Distribution: Apportioning Debt Discharged in Bankruptcy

Let’s assume that we have a married couple.  They jointly own a home and are jointly liable on all debts encumbering it, including the mortgage and home equity line of credit.  They are individually and jointly liable on various other debts, including some notable credit card debt.  The parties then separate in anticipation of their inevitable divorce.  Wife files for divorce.  Husband files for bankruptcy.  Wife does not file for bankruptcy.  Wife’s equitable distribution case is stayed by the trial court until after Husband has his debts discharged pursuant to his bankruptcy filing, including his obligations to the lender of the mortgage and home equity lines of credit encumbering the marital residence.  Wife therefore becomes solely liable to the lender for the mortgage and home equity lines of credit.  Wife, at their divorce trial, argues that the mortgage and home equity lines of credit are marital debts that the court must apportion between her and Husband.  Husband argues that he can’t be held liable on these debts to Wife because his liability was discharged pursuant to his bankruptcy filing and he is entitled to the fresh start that federal bankruptcy law intends to provide debtors like him.  So must the trial court apportion the mortgage and home equity line of credit debt between these parties per Va. Code § 20-107.3(E) or does federal bankruptcy law’s fresh start preempt the state trial court’s legislative mandate? Continue reading

Virginia Equitable Distribution: Millionaires, Marital Waste and Spousal Support

Can one spouse pay temporary spousal support by making withdrawals from marital accounts?  Can one spouse pay for his attorney’s fees by making withdrawals from marital accounts?  Can one spouse pay for his mortgage payments and household expenses from marital funds while the divorce case is pending?  Wouldn’t it be unfair for the payor spouse to continue to deposit his work income into his own separate account for his sole benefit moving forward while paying for his various obligations by withdrawing funds from marital accounts that otherwise would be available to the payee spouse at the divorce trial? Continue reading