In a prior post (Financial Documents to Collect…), we provided a pretty complete list of the kinds of documents you will want to collect prior to meeting with counsel or prior to your first mediation session. This should give you a great view of assets and liabilities.
So what’s next? In an upcoming post, we’ll talk about the dividing process. But first, we need to talk about what assets and liabilities will even be a topic of conversation. Essentially, what is “marital” property that is subject to distribution.
In Virginia if you are in a courtroom setting, (Virginia State Code § 20-107.3) contains directions on how to determine what’s “marital” and what’s “separate”. This Code Section lays out the types of property and their definitions. Generally, the presumption is that everything is “marital” unless the person who thinks something is “separate” can prove it. The main categories of “separate” property are:
- Property acquired before the marriage (including gains/losses).
- Property acquired during the marriage by gift or inheritance.
- Property acquired after the “last date of separation”.
Liabilities are treated the same as assets when determining what’s “marital”. Often the “last date of separation” becomes very important when one of the spouses created significant debt right before or after the date of separation.
There’s lots of case law interpreting this statute. Consider whether you’ll want to talk to your attorney about those subtleties.
In a litigation setting, your attorneys will propose to the Court what each of you think should be included as “marital” and “separate”. The judge, following his or her interpretation of the Code Section identified above, will decide for you. Anything that the court determines is “separate” is “off the table”, no longer a part of the equitable distribution conversation.
In mediation, with the help of your mediator, you would work with your spouse to determine what is included in the distribution conversation. One of the big advantages of mediation is that you can follow the law completely, partially, or not at all. Perhaps the court might have considered a piece of property “marital”. The two of you could decide it’s just not part of the conversation. In mediation, only you make all the decisions about classifying property.
It’s VERY important that you don’t think of Resolution Point’s articles as “legal advice”. Our goal is to get you familiar with some of the ideas with very broad strokes. Please consult with an attorney to determine how any of this may affect your actual situation.
Daniel R. Burk, President