What Assets Are Protected from Divorce Settlements?

 Divorce is a complex and emotionally challenging process that usually involves the division of marital assets and debts between spouses. In Virginia, understanding which assets are protected and which are subject to division is helpful for individuals pursuing divorce settlements.

Equitable Distribution Principle

Virginia follows the principle of equitable distribution, which means that marital assets are divided fairly but not necessarily equally between spouses. This process aims to ensure a just distribution based on various factors, including the financial and non-financial contributions of each spouse during the marriage.

Assets Generally Protected from Division in Virginia Divorce

Separate Property

Pre-Marital Assets

• Definition: Property owned by either spouse before the marriage is typically considered separate, meaning it is not subject to division during divorce proceedings.
• Protection: Virginia law generally recognizes the principle that assets acquired before the marriage are the sole property of the individual who brought them into the marriage. As such, pre-marital assets are protected from division.
• Exceptions: To maintain the separate nature of pre-marital assets, it’s essential to avoid commingling them with marital assets. For example, keeping a pre-marital bank account separate from joint accounts can help preserve its status as separate property.

Gifts and Inheritances

• Definition: Assets received as gifts or inheritances by one spouse during the marriage are often classified as separate property.
• Protection: Virginia divorce laws typically exempt gifts and inheritances from distribution during divorce. These assets are considered the sole property of the spouse who received them.
• Documentation: To reinforce the separate status of gifted or inherited assets, maintaining clear documentation, such as records of the gift or inheritance and how it was utilized, can be beneficial.

Prenuptial and Postnuptial Agreements

Prenuptial and postnuptial agreements are legal tools that allow couples to define the terms of asset division in the event of divorce. These agreements provide a degree of protection to assets outlined within them.

• Purpose: Prenuptial agreements (entered into before marriage) and postnuptial agreements (entered into after marriage) serve to outline the distribution of assets, addressing potential issues in the event of divorce.
• Asset Protection: Assets specified in these agreements can be protected from the general rules of equitable distribution applied by Virginia courts. Parties have the flexibility to define their own terms regarding property division.
• Enforceability: For these agreements to be enforceable, they must meet certain legal requirements, including full financial disclosure, fairness at the time of execution, and absence of coercion.

Property Acquired After Separation

Assets acquired by either spouse after the date of separation are generally considered separate property, providing a measure of protection from division.

• Definition: Assets obtained or earned by either spouse after the official date of separation are typically classified as separate property.
• Protection: Virginia divorce laws often exempt post-separation assets from the equitable distribution process. These assets are considered the sole property of the spouse who acquired them after separation.
• Date of Separation Significance: Determining the date of separation is critical, as it marks the point at which assets acquired afterward may be deemed separate.
• Documentation: Keeping clear records of financial transactions and acquisitions post-separation can be valuable in establishing the separate nature of these assets.

Frequently Asked Questions on Separate Property in Virginia

Q: Are gifts received during the marriage considered separate property in Virginia?

A: Yes, gifts received by one spouse during the marriage are generally classified as separate property in Virginia. These gifts are exempt from equitable distribution and are considered the sole property of the recipient.

Q: How is the date of separation determined in Virginia?

A: The date of separation is the point at which spouses begin living separately and apart with the intent to end the marriage. It’s a key factor in determining the cut-off for assets acquired post-separation to be considered separate property.

Q: Can assets become commingled and lose their status as separate property in a Virginia divorce?

A: Yes, assets can lose their status as separate property if they become commingled with marital assets. Commingling involves mixing separate property with marital property, making it challenging to trace and distinguish individual assets.

Q: What if my spouse claims a right to my separate property based on contributions or improvements made during the marriage?

A: While contributions or improvements made by a spouse may be considered in certain cases, Virginia generally upholds the separate status of property. The contributing spouse may be entitled to reimbursement but not necessarily a share of the property’s ownership.

Q: Are debts incurred before the marriage considered separate property in Virginia?

A: Debts incurred before the marriage are generally considered the separate responsibility of the spouse who acquired them. Moreover, complex situations may arise if marital funds are used to pay off pre-marital debts.

Q: Can a spouse’s career or educational achievements during the marriage be considered separate property in a Virginia divorce?

A: No, career or educational achievements are not typically treated as separate property. With that said, the financial benefits derived from such achievements may be subject to equitable distribution.

Q: What happens if there is disagreement over the classification of an asset as separate property in a Virginia divorce?

A: Disagreements over the classification of assets may require legal intervention. The court will assess evidence, including documentation and financial records, to determine the nature of the property and whether it qualifies as separate or marital.

Q: Can the court order the sale of separate property in a Virginia divorce?

A: In some cases, the court may order the sale of separate property if it is necessary to achieve an equitable distribution. This may occur when dividing the property in kind or through other means is impractical.

Q: If a business was started before the marriage but grew during the marriage, how is it treated in a Virginia divorce?

A: The increased value of a business during the marriage may be considered marital property subject to equitable distribution. Valuation experts may be involved to assess the extent to which the business’s growth is attributable to marital efforts.

Q: Can a spouse claim a share of the other spouse’s retirement benefits in a Virginia divorce?

A: Retirement benefits accumulated during the marriage are generally considered marital property subject to equitable distribution. Specialized orders, such as Qualified Domestic Relations Orders (QDROs), may be used to divide certain retirement accounts.

Q: What if my spouse is attempting to hide assets to prevent their inclusion in the divorce settlement in Virginia?

A: Hiding assets during divorce proceedings is illegal. If you suspect such behavior, your attorney can employ legal mechanisms to uncover hidden assets, and the court may impose penalties for non-disclosure. 

Our Experienced Property Division Attorneys Can Protect Your Rightful Share of Assets in a Divorce 

At Pack Law Group, we understand the legal nuances of asset protection in a Virginia divorce and will use the full force of law to protect your financial interests when it comes to property division between you and your ex. In high-net-worth divorces, we will use the expertise of CPAs, real estate evaluators, business appraisers, and forensic accountants where necessary to ensure you receive your rightful share. To schedule your complimentary consultation, give us a call at 540-586-7225 or contact us online.