Property Distribution - § 5-4 - § 5-6 (A)

§ 5-4. Dissipation/Waste

2018---Hvozdovic v. McGuire, Va. Ct. of Appeals, Unpublished, No. 1146-17-4
The trial court did not abuse its discretion in finding that Husband’s payment of the parties’ adult child’s college tuition constituted a waste of marital assets. The evidence established that, although the parties entered into a separation agreement requiring equal input from both parents with regard to their children’s education, the agreement did not obligate either party to pay for the children’s college or graduate school. Nevertheless, Husband unilaterally decided to use a marital asset to make the tuition payments. Additionally, the evidence showed that the parties had been separated for over ten years when Husband made the tuition payments from marital funds, and that Husband was largely absent from the child’s life during the marriage and after the separation. Under these facts, the trial court reasonably concluded that Husband’s payment of the child’s tuition was an attempt to improve his relationship with the child and, thus, the tuition payments were for Husband’s own benefit and for a purpose unrelated to the marriage.

2018---Moret v. Moret, Va. Ct. of Appeals, Unpublished, No. 1286-17-3
The trial court did not err in awarding an equitable distribution credit to Wife based on a finding that Husband had wasted marital assets. During the course of the proceedings, the trial court entered an order that, among other things, prohibited both parties from disposing of or otherwise encumbering any marital assets without the express consent of the other party. Despite the trial court’s order, the evidence demonstrated that, during the proceedings, Husband sold a motorcycle, several tractors, a camper, and cattle for significantly less than what Husband had valued such items on a bank loan application. Although Father attempted to justify his actions by pointing to the parties’ staggering marital debt, he failed to present any evidence to rebut the trial court’s finding that he had wasted marital assets.

2017---Wiley v. Wiley, Va. Ct. of Appeals, Unpublished, No. 0844-16-4
The trial court did not err in finding that husband improperly dissipated marital assets. Although husband used some marital funds to pay wife pendente lite spousal support and the mortgage on the former marital residence, husband did not trace his use of all of the martial funds in his possession to such proper purposes. Specifically, husband spent significant amounts of money on travel expenses, expensive meals, and substantial living expenses to support his relationship with his paramour. Most of these expenses were charged to husband’s credit cards, which husband paid from a marital account or from his personal checking account in which he had deposited martial funds. Additionally, the trial court did not err in distinguishing the facts in this case from the facts in Wright v. Wright, 61 Va. App. 432 (2013). In Wright, the Court of Appeals held that the trial court in that case did not abuse its discretion when it denied the wife’s request for an alternate valuation date of two marital accounts because she expressly conceded that the husband had not wasted marital assets. In contrast here, wife offered credible evidence that husband used marital funds for improper purposes.

2017---Allen v. Allen, Va. Ct. of Appeals, Unpublished, No. 0562-16-4
The trial court did not err in refusing to use an alternate valuation date to determine the value of the proceeds of the sale of Husband’s business where Husband presented evidence that he used the proceeds to pay marital debt and where the trial court found that Husband’s explanation for the use of the proceeds was credible.

2014---Plaisted v. Plaisted, Va. Ct. of Appeals, Unpublished, No. 0051-14-2
The trial court did not err in finding that Husband wasted marital funds. A party’s use of marital funds for living expenses, court-ordered support payments, and attorney’s fees for the divorce proceeding are valid marital purposes and do not constitute waste. Here, the trial court found that Husband withdrew $193,908.57 from marital accounts after the parties separated in 2011 and that he properly used $54,763.00 of that money toward court-ordered support payments. However, Husband failed to prove that he spent the $139,145.57 balance of those funds for living expenses, legal fees, or to otherwise account for the money.

The trial court did not err in finding that Husband had not wasted funds from a marital IRA during the separation where Husband admitted he withdrew the funds, but testified that he did not receive the full withdrawn amount because it was taxed at a federal rate of thirty-nine percent and penalized by ten percent, and that he used the net balance to pay living expenses and attorney’s fees.

2014---Wroblewski v. Russell, 63 Va. App. 468
The trial court did not err in ordering Wife to reimburse husband $30,000 for his payment of the parties’ tax liability where Wife’s decision to file her taxes separately increased the parties’ tax liability by approximately $92,400. The fact that a spouse has the right under federal law to file separate income taxes does not in any way prevent a state court, in the context of adjudicating a divorce, from considering the deleterious effect of that decision on the marriage.

2013-- Wright v.Wright, 61 Va. App. 432
The trial court did not err when it refused to consider the extent of husband’s post-separation income or other separate assets in determining whether husband unfairly diminished marital assets following the parties’ separation. Where husband could meet the burden of proving that he used marital property for proper purposes, he was under no obligation to spend separate funds rather than marital funds, even though his post-separation resources allowed it.

2012---Neuhs v. Neuhs, Va. Ct. of Appeals, Unpublished, No. 2381-11-3
Where the trial court found that wife had dissipated marital assets subsequent to the parties’ separation, it erred in failing to specifically identify exactly what expenditures it determined to be waste, erred in failing to specifically value those expenditures, and erred in failing to specifically classify those expenditures as marital or separate. Although the trial court noted in its letter opinion that wife’s waste was a factor it considered in awarding husband a larger share of marital property, detailed findings with regard to the waste were necessary. Case remanded for clarification on the waste issues.

2011---Campbell v. Campbell, Va. Ct. of Appeals, Unpublished, No. 1481-10-2
The trial court properly held that husband’s gifts of over $800,000 in real estate to the parties’ children did not constitute waste of marital assets, where evidence revealed husband had planned to give the gifts to the children once they reached adulthood, that wife knew of that plan, that wife didn’t object to the gifts, and that wife actually contributed funds towards those gifts.

2010---Wynn v. Wynn, Va. Ct. of Appeals, Unpublished, No. 2400-09-1
Trial court did not err in awarding husband approximately half of the value of wife’s pension, which wife cashed out during the separation, despite wife’s argument that she had spent the money on living expenses. Once husband established that wife had spent marital money since the separation, wife had the burden to prove that the money was spent for a proper purpose. Wife provided no evidence as to the particular expenses she claimed.

2010---Schuman v. Schuman, Va. Ct. of Appeals, Unpublished, No. 0631-09-4
Trial court erred in failing to include as marital property subject to distribution the $15,100 in funds that wife removed from a joint account at the time of separation. Although wife testified that she “wrote a couple of checks for marital bills,” she further testified that when she noticed that husband had transferred funds from a Virginia bank account to a Florida bank account at the same time, she became “concerned about what was happening, in terms of money and having enough, because this was just at the point of separation.” She offered no further evidence of the use of the funds. Wife’s expression of concern about finances was not sufficient to meet her burden of proving that she used the withdrawn funds for a proper purpose. Thus, the $15,100 should have been included as marital property and considered in fashioning the equitable distribution award.

2010---Davis v. Davis, Va. Ct. of Appeals, Unpublished, No. 1241-09-2
Trial court did not err in concluding that husband committed waste by cashing three marital CD's and using them to purchase separate property approximately one month prior to the separation of the parties. Despite husband's assertion that he did not cash the CD's and spend the money "in anticipation of divorce or separation," the record established that at the time he cashed the CD's, he had been telling his wife for months that he did not want to be with her, had begun eating his meals and sleeping separately from wife, and was involved in an ongoing sexual and romantic relationship with his paramour. The wasted funds were returned to the marital estate for purposes of equitable distribution.

2009---Cusack v. Cusack, 53 Va. App. 315
Trial court erred in awarding Wife 50% of marital share of Husband's military retirement benefits as of the date of his retirement, which occurred after the parties separated but almost one year prior to Wife filing the divorce complaint and almost two years prior to the equitable distribution hearing. Wife offered no evidence of inappropriate dissipation of the pension receipts, nor any evidence contradicting Husband's testimony that such payments were used by Husband to pay support to Wife under an existing pendente lite order and to maintain life insurance for the parties. Having failed to allege inappropriate dissipation, Wife was not entitled to a retroactive award of the marital share of the payments received by Husband prior to the equitable distribution hearing.

2009---Ovissi v. Salemi , Va. Ct. of Appeals, Unpublished, No. 2112-08-4 (August 25, 2009)
Trial court erred in holding that husband's use of a line of credit taken out on the marital residence to pay for his attorney's fees and "other unknown expenditures" constituted use of marital funds for a non-marital purpose. Use of marital funds for attorney's fees incurred in divorce is not waste (citing Thomas v. Thomas, 40 Va. App. 639). Furthermore, trial court failed to assign values to the amount of attorney's fees, and failed to make a factual determination regarding the nature and amount of the "other unknown expenditures" to determine if those expenditures were "for a marital purpose."

2009---Attiliis v. Attiliis, Va. Ct. of Appeals, Unpublished, No. 1087-08-4
Dissipation occurs where one spouse uses marital property for his own benefit and for a purpose unrelated to the marriage at a time when the marriage is undergoing an irreconcilable breakdown , (citing Clements v. Clements, 10 Va. App. 580 (1990)(emphasis added)). "Dissipation" and "waste" are the same thing, and interchangeable terms. The concept of dissipation does not apply to expenditures which were not specifically for the purpose of depleting the marital estate and where there was no evidence that there was an irreconcilable breakdown of the marriage, (citing Smith v. Smith, 18 Va. App. 427 (1994)).

2005---Jacobson-Kaplan v. Kaplan, Va. Ct. of Appeals, Unpublished, No. 0509-05-1.
The trial court erred in classifying as marital income tax debt incurred by Husband, post-separation. Because the debt was acquired after the separation, the marital funds Husband used to pay it constituted a dissipation of marital property for a nonmarital purpose pursuant to Va. Code §20-107.3(E)(10).

2004---Estate of Hackler v. Hackler, 44 Va. App. 51
Trial court had the authority under Va. Code §20-103(A)(vii) to appoint a conservator to take over husband's accounts and assets for purposes of preventing his further dissipation of the marital estate during the pendency of the divorce case.

2004---Budnick v. Budnick, 42 Va. App. 823
Trial court did not err in finding that husband's use of marital funds withdrawn from a marital retirement account to pay fines and restitution to the victims of his criminal activities was a "substantial waste of marital assets in anticipation of divorce or separation for a purpose unrelated to the marriage, and in derogation of the marital relationship at a time when the marriage was in jeopardy."

2003---Thomas v. Thomas, 40 Va. App. 639
It was not waste for Husband to use marital funds to pay court-ordered pendente lite spousal support. The expenditure of marital funds for items such as voluntary support, living expenses, attorney's fees, and other necessities of life constitutes a valid marital purpose and is not waste.

2002---Mir v. Mir, 39 Va. App. 119
A court need not find waste in order to consider negative contributions in fashioning an equitable distribution award of marital estate.

2002---Northcutt v. Northcutt, 39 Va. App. 192
In order to alter the evaluation for an equitable distribution award under Va. Code §20-107.3(E)(5), there must be a showing of use of the marital property for the benefit of one spouse and for purposes unrelated to the marriage in anticipation of divorce or separation and at a time when the marriage is in jeopardy. p. 197.

Husband did not commit waste by using marital funds to pay spousal support, the daughter's college tuition, etc. p. 199.

1994---Smith v. Smith, 18 Va. App. 427
To challenge a party's use of marital funds as dissipation or waste, the challenging party has the burden of showing that the use of the funds was "in anticipation of divorce or separation...and at a time when the marriage was in jeopardy." In this case, the Court of Appeals refused to extend this definition to include expenditures made for a fifteen-year extra-marital affair that occurred prior to the separation of the parties, without a showing that expenditures were made for the specific purpose of depleting the marital estate or a showing that an irreconcilable breakdown of the marriage existed at the time of the expenditures. Furthermore, the trial court did not err in holding that wife produced insufficient evidence to prove that husband's post-separation adultery involved the waste of marital funds. Although husband admitted that his paramour accompanied him on some post-separation business trips, he testified that some of the trips were reimbursed business trips. Wife's evidence failed to show which post-separation trips involved husband's paramour and of those that did, whether they were reimbursed as business expenses or paid with marital funds.

1993---Stratton v. Stratton, 16 Va. App. 878
Husband was not guilty of dissipation or waste of marital assets in anticipation of separation where he purchased with separate funds land originally held by his marital business, thereby converting the land itself to separate property. Husband gave adequate consideration for the purchase, and there was no evidence that the transaction was fraudulent. The business was a corporation, and the real estate was but merely one asset that the corporation was entitled to convey. Husband’s cash payment of separate funds to the marital corporation in exchange for the land did not cause any diminution in the corporation’s value, and thus, no dissipation or waste occurred.

1990---Clements v. Clements, 10 Va. App. 580
If marital funds are spent after separation, there is a presumption of dissipation. Burden is on party spending funds to establish they were used for living expenses or some other proper purpose.

1988---Booth v. Booth, 7 Va. App. 22
The use of marital funds by wife to pay legal fees for the pending divorce action and to support herself and the parties’ child did not constitute “waste” of the marital estate.

§ 5-5. Jurisdiction

2014---Anthony v. Skolnick-Lozano, 63 Va. App. 76
In a divorce case, a circuit court does not have the authority to declare a resulting trust.

2011---Prizzia v. Prizzia, 58 Va. App. 137
While issues of subject matter jurisdiction may be raised at any time by the parties or by the court sua sponte, the statutory elements that turn subject matter jurisdiction into active jurisdiction may be waived if objections thereto are not properly made and preserved. Va. Code §20-96 grants a circuit court jurisdiction over suits for divorce. In a divorce case, Va. Code §20-107.3 further provides the trial court with the authority to make an equitable distribution of the parties’ marital estate, provided that certain prerequisites set forth in Va. Code §20-107.3(A) are met. If a party does not object to the trial court’s authority to make an equitable distribution award based on an alleged failure to satisfy the prerequisites of Va. Code §20-107.3(A) in a particular divorce case, that party has waived the right to raise that objection on appeal.

2007---Brown v. Brown, Va. Ct. of Appeals, Unpublished, No. 1676-06-2
Trial court had jurisdiction under Va. Code §20-107.3(K) to reinstate case on the docket in order to effectuate and enforce its rulings from 2002 equitable distribution and to correct any discrepancies in a 2003 decree.

2007---Miller v. Miller, Va. Ct. of Appeals, Unpublished, No. 0042-07-4
Trial court did not err in refusing to re-open an equitable distribution decree. Neither party requested that the trial court retain jurisdiction over the equitable distribution and Husband failed to timely request an equitable distribution hearing during the twenty-one day period following entry of the decree during which the trial court retained jurisdiction over the case.

2005---Cabaniss v. Cabaniss , 46 Va. App. 595
While a court with in rem jurisdiction may enter a divorce decree, personal rights, which include property and support rights in divorce cases, may not be adjudicated by a court lacking in personam jurisdiction.

2004---Boedeker v. Larson, 44 Va. App. 508
The Uniformed Services Former Spouses’ Protection Act (USFSPA), 10 U.S.C. §1408, permits state courts to divide disposable retired or retainer pay of members of the armed forces in accordance with state law. The act does not grant state courts the power to divide military retirement pay that has been waived for purposes of receiving veterans’ disability benefits.

2002---Smith v. Smith, 38 Va. App. 113
A court's jurisdiction to award equitable distribution is dependent upon a timely request by a party. Va. Code §20-107.3 specifies neither the form nor the substance of a request. It is sufficient that a party make known to the court his or her desire that the court award equitable distribution.

2000---Patel v. Patel, 33 Va. App. 776
A trial court's order stating that it would retain jurisdiction to make an equitable distribution award for a time certain was not made for the purpose of removing the case from the docket, but with the intent of limiting its jurisdiction.

1998---Toomey v. Toomey, 251 Va. 168
Husband obtained divorce in Virginia. Trial court had no jurisdiction over equitable distribution where out of state Wife was personally served and did not move for equitable distribution until after divorce granted.

1997---Wilson v. Wilson, 25 Va. App. 752
After twenty-one days, when no appeal is taken, a trial court lacks the authority to substantively modify an order equitably distributing pension benefits, irrespective of any subsequent agreement by the parties to the contrary. The jurisdiction of the court cannot be established by consent.

§ 5-6. Valuation

(A) Generally

2018---Henderson v. Henderson, Va. Ct. of Appeals, Unpublished, No. 1402-17-2
The trial court did not err in ruling that the record contained insufficient evidence to value Husband’s interests in a real estate partnership. Although a balance sheet containing the partnership’s total capital for its 2015 fiscal year was admitted into evidence, no evidence was presented as to how or why the balance sheet was prepared. Additionally, to the extent that the evidence may have supported an inference that the partnership’s balance sheet relied upon a fair market value for the real property owned by the partnership, that value would have calculated more than two-and-a-half years prior to the evidentiary hearing. Accordingly, the staleness of the balance sheet provided the trial court with further reason to reject it as evidence of the value of Husband’s interest in the partnership.

2016---Shuler v. Shuler, Va. Ct. of Appeals, Unpublished, No. 0082-16-3
The trial court did not err in valuing Husband’s business based on Wife’s evidence. Although Wife had very limited involvement with the company, she testified regarding the value of the company and provided documentary evidence to support her opinion. In contrast, although Husband testified extensively regarding the business’ history, daily operations, and future, he failed to present any evidence of business’ value. Thus, the only evidence of the businesses’ value was provided by Wife.

2014---Hugh v. Hugh, Va. Court of Appeals, Unpublished No. 1417-13-4
The trial court erred in failing to classify and value the parties’ interest in Husband’s business because of “insufficient evidence upon which to place a value on [the business].” Although the parties have the burden of bringing forth sufficient evidence for the trial court to base its award, where there is sufficient and credible evidence as to the value of a business, the trial court must assign a value to the business when making its equitable distribution award. The trial court in this case had a relative wealth of information regarding the business, including expert testimony, Husband’s testimony, tax returns, financial statements, bank statements, invoice and purchase orders, and deposition transcripts. Although the trial court had doubts as to Husband’s credibility and the limited basis for the expert’s opinion, it nonetheless had sufficient information to assign a value to the business.

2014---Plaisted v. Plaisted, Va. Ct. of Appeals, Unpublished, No. 0051-14-2
The trial court did not err in valuing Husband’s interest in real property based on a listing agreement introduced into evidence by Wife. The party moving for equitable distribution bears the burden of proof on the valuation of property. When a party with the burden of proof on an issue fails for lack of proof, he cannot prevail on that issue. Although Code of Virginia § 20-107.3(A) requires the trial court to classify and value all of the parties’ real and personal property, the court may, without violating the statute, make a monetary award without classifying or valuing every item of property where the parties have beengiven a reasonable opportunity to provide the evidence necessary to prove classification or valuation, but through their lack of diligence, have failed to do so. Here, because Husband failed to provide the court with any evidence of the property’s value, the trial court was entitled to infer from the listing agreement that the parties’ asking price for the property was credible evidence of the property’s value.

2014---Cavallo v. Cavallo, Va. Ct. of Appeals, Unpublished, No. 0981-13-4.
Wife claimed that she was entitled to 50% of the net increase in value of Husband’s separate property during the marriage pursuant to the parties’ premarital agreement. In order to show the net increase in the value of Husband’s separate businesses during the marriage, Wife’s counsel presented evidence through Husband’s accountant of the “total assets” of the businesses for the relevant years. Husband’s accountant did not provide an expert valuation of the businesses nor give an opinion that the “total assets” of the businesses represented the net value of the businesses. Wife’s valuation approach was flawed because it failed to consider the liabilities of the businesses.

2013-- Patel v. Patel, 61 Va. App 714
The circuit court did not err in declining to find a negative value for several marital assets for which the marital debts exceeded the marital value. Where the marital debts of an asset exceed the marital value of an asset, the marital value of the asset for purposes of equitable distribution is zero.

The circuit court did not err in declining to apply a fractional discount to reflect Husband’s percentage of ownership in several companies. The relevant value of an asset under Code of Virginia §20-107.3(A) is the intrinsic value of the property, not the value of an owner’s percentage of ownership.

2013-- Wright v.Wright, 61 Va. App 432
The trial court did not err when it used the “bottom-up” approach in determining the marital value of husband’s association with his law firm. This methodology compared husband’s average income for three years to that of a peer group. The difference between the husband’s income and the average equaled the excess earnings attributable to husband’s association with his particular firm.

2013---Collins v. Collins, Va. Ct. of Appeals, Unpublished, No. 0862-12-4
The trial court erred in failing to value the husband’s business, a marital asset, where he presented evidence of the business’ gross income. In valuing a business during the equitable distribution phase of the case, the trial court must determine from the evidence the value which represents the business’ intrinsic worth to the parties. The factors in Internal Revenue Ruling 59-60 guide the court in making such determination, including the history of the firm, the nature of the company, the outlook for the industry, the book value of the stock, the size of the block to be valued, the earning and dividend-paying capacities of the company, and the existence of goodwill or other intangible assets.

2012---Jones v. Jones, Va. Ct. of Appeals, Unpublished, No. 2086-11-3
The trial court did not err in determining the lost rental value of a small house based on the monthly rent received by a prior tenant, despite the fact that the current tenant occupied the property rent-free.

2011---Pascarella v. McCoy, Va. Ct. of Appeals, Unpublished, No. 0485-10-1
The requirement that the Court value property before dividing it between the parties, pursuant to Va. Code §20-107.3, did not apply where the parties stipulated that the distribution of an LLC formed during the marriage would be controlled by the operating agreement of the LLC rather than the equitable distribution statute.

2010---Dunfee v. Dunfee, Va. Ct. of Appeals, Unpublished, No. 0870-10-4
Trial court did not err in accepting husband’s valuation of the marital residence, which he based in part on market research into comparable neighborhood sales in the six months prior to the hearing and in part on a prior admission by wife that the property was worth husband’s asserted value. Despite wife’s contention that, as sole owner of the property, her opinion as to the value was entitled to greater weight, her evidence regarding value consisted only of the most recent tax assessment and market research that she performed more than ten months prior to the hearing.

2010---Wynn v. Wynn, Va. Ct. of Appeals, Unpublished, No. 2400-09-1
Trial court did not err in refusing to value or equitably distribute husband's business where the parties presented insufficient evidence as to the value or classification of the business. Although the court heard testimony regarding the date the business started, the fact that the business had only just begun to profit, and evidence regarding the purchase price of inventory, the value of equipment, and the gross sales, the court did not err in concluding that "based on the economy, it's too speculative to give wife anything as to the company."

2010---Tucker v. Wilmoth-Tucker, Va. Ct. of Appeals, Unpublished, No. 2008-09-2
Trial court erred in failing to classify as either marital, separate, or hybrid property a $30,000 home equity credit line that wife took out on the marital residence during the separation of the parties, and erred in failing to consider that debt when valuing the marital residence, instead relying solely on the assessed value.

2010---Leake v. Taylor, Va. Ct. of Appeals, Unpublished, No. 0737-09-4
Trial court did not err in valuing equity in marital residence as the value of the residence less the debt owed at the time of trial, despite fact that wife had refinanced the mortgage prior to the separation and received $82,000 in cash as a result. Although husband produced evidence of payments of mortgage principal with marital funds after the refinance, he failed to produce evidence of the value of the home or the balance of the mortgage at the time of the marriage, and failed to produce evidence of payments towards mortgage principal between the date of marriage and the date the mortgage was refinanced.

2009---Howard v. Howard, Va. Ct. of Appeals, Unpublished, No. 2219-08-2
Trial court did not err in valuing the equity in the marital residence at $55,000, despite the fact that Husband had recently sold the residence and received only $24,436 in net proceeds. Although Husband sold the property for $155,000, the trial court was not required to accept the proceeds from that sale as the value of the equity in the home, given the fact that a cash offer of $175,000 had previously been rejected.

2009---Biernot v. Biernot, Va. Ct. of Appeals, Unpublished, No. 0331-08-1
Trial court did not err in using an expert appraiser's assessment of the total value of property together with a city assessment's proportional division of the value of the land alone in relation to the total value of the property in determining Husband's separate interest in the property. Court classified the land as Husband's separate property and the improvements on the land as marital property. Because the expert appraiser did not assign a value to the improvements when computing total value, the Court was entitled to rely on evidence of the city assessment's determination of the separate value of improvements in order to determine the appropriate percentage of Husband's separate interest.

2007---Hosier v. Hosier, Va. Ct. of Appeals, Unpublished, No. 0767-06-1
Trial court did not err in refusing to apply the Brandenburg formula for calculating Wife’s separate interest in the marital home, and instead relying upon a “net percentage gain” formula for valuing that interest. The formula determined the percentage gain by comparing the purchase price to the net proceeds of the sale, and then increasing wife’s separate contributions at the time of purchase by that percentage gain in value. In doing so, the trial court properly recognized the role of wife’s separate property used to purchase the asset as well as the role of marital property used to hold the asset during marriage, including debt maintenance, insurance premiums, and real estate taxes. In this way, the court balanced the financial expectancies related to capital acquisition costs (supported by wife’s separate interest) and asset retention costs (supported by marital assets).

2007---Becker v. Becker, Va. Ct. of Appeals, Unpublished, No. 1172-06-4
Trial court did not err in refusing to award Wife a share of Husband's deferred compensation based on his ownership interest in his company because the court adopted a valuation of Husband's ownership interest which already took into account the value of Husband's deferred compensation as defined by the company's employment agreement with Husband.

2007---Motley v. Motley, Va. Ct. of Appeals, Unpublished, No. 2551-06-2
Trial court did not abuse discretion by accepting the appraiser's value of the marital home rather than the tax assessment value.

2006---Robbins v. Robbins, 48 Va. App. 466
Case remanded to value marital home using "the most current and most accurate information available which avoids inequitable results."

2004---Hoebelheinrich v. Hoebelheinrich, 43 Va. App. 543
In Virginia, courts look to the intrinsic value of property to measure value for equitable distribution purposes. The intrinsic value of a business may include goodwill, which is defined as the “increased value of the business, over and above the value of its assets, that results from the expectation of continued public patronage.” As a matter of law, goodwill attributable to personal characteristics is considered separate property and goodwill attributable to a business entity (assuming the entity itself is marital) is marital property. However, the existence of goodwill is not fixed as a matter of law, nor is the method of its valuation. Thus, a trial court’s valuation of goodwill will not be disturbed if it appears that the court made a reasonable approximation of the goodwill value based on competent evidence and the use of a sound method supported by that evidence.

Trial court did not err in refusing to accept husband’s testimony as to the “replacement value” of certain household goods, despite the fact that his testimony was the only evidence presented regarding the value of the goods, and was unchallenged by wife. Although the cost to replace an asset under present conditions is some evidence of an asset’s present fair market value, replacement cost is not the legally controlling definition of value.

A trial court has broad discretion to determine the value of assets. The burden is on the parties to provide the trial court sufficient evidence from which it can value their property. Further, the trial court determines the weight and credibility to afford the evidence presented to it.

2003---Owens v. Owens, 41 Va. App. 844
Trial court did not err in refusing to apply a “minority interest discount” to husband’s 50% ownership interest in a family corporation for purposes of valuing his shares for equitable distribution. The “intrinsic value” approach, when applied to stock in a family owned company, requires consideration of particular facts and circumstances beyond otherwise objective criteria commonly used in open market transactions. In this case, husband and his brother were equal owners in the business, and no evidence suggested that the brother had ever used his position as office manager to exert authoritarian control of the company or in any way affect husband’s share of the profits, nor did the evidence suggest that the brothers had ever disagreed as to the strategic direction of the company or the management of its finances. Furthermore, the court noted that, should the brother ever attempt to exert such control or affect husband’s share of the profits, several partnership-law remedies would be available. Given the absence of any suggestion of actual oppression relating to husband’s alleged minority status, coupled with the availability of judicial remedies for potential oppression, husband was not entitled as a matter of law to a minority discount for purposes of valuing his shares in the business.

Trial court did not err in refusing to apply a marketability discount to husband’s shares in a family owned business. A marketability discount presupposes a probable sale of stock. Where a sale is improbable, the discount need not be applied. Here, husband and his brother were equal owners in the business, and husband testified that he would only sell his share of the business to a third party in the event that he had no other way to satisfy a potential equitable distribution award. Furthermore, husband offered no evidence that alternatives to sale, such as acquiring a loan, were unavailable to him.

Trial court did not err in refusing to consider, for purposes of valuing husband’s family owned business, the potential capital gains tax liability that would result if husband were to sell his share in the business to satisfy an equitable distribution award. Although Va. Code §20-107.3(E) requires the court to consider the potential tax liabilities to each party when distributing marital property, a party asserting that potential capital gains taxes should be considered for purposes of valuing the property pursuant to Va. Code §20-107.3(A) must prove the probability of an actual, not merely hypothetical, sale of the asset. This principal is no more than the application of the maxim that “valuation cannot be based on mere guesswork.”

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