Property Distribution

§ 5-1. Generally
§ 5-2. Classification
(A) Generally
(B) Burden of Proof/Tracing
(C) Debts
(D) Gifts
(E) Hybrid Property
§ 5-3. Criteria/Award
§ 5-4. Dissipation/Waste
§ 5-5. Jurisdiction
§ 5-6. Valuation
(A) Generally
(B) Hybrid Property
(C) Valuation Date
§ 5-7. Retirement Accounts
(A) Classification
(B) Valuation
(C) Criteria/Award
(D) Orders Dividing


Chapter 5

PROPERTY DISTRIBUTION

§ 5-1. Generally

2015---Epps v. Epps, Va. Ct. of Appeals, Unpublished, No. 1077-14-1
The trial court did not err by refusing to award Husband any part of Wife’s military retirement. Code of Virginia § 20-107.3 contains no presumption favoring an equal division of marital property. Additionally, each marital asset is not necessarily entitled to be treated the same for purposes of equitable distribution. Depending on how a court applies § 20-107.3(E)’s factors, a court may determine that certain marital assets should be divided and treated differently than others.

2014---Linton v. Linton, 63 Va. App. 495
The parties agreed by settlement agreement that Wife’s separately titled limited partnership interest was marital property, and that Husband was entitled to one half of the value. The trial court did not err in allowing Wife to transfer a portion of her separately titled partnership interest to satisfy the monetary award. While Code of Virginia §20-107.3(C) prohibits a court from dividing and transferring property which is not jointly owned, Code of Virginia §20-107.3(D) gives courts the authority to grant a monetary award and allows the party against whom the monetary award is made to satisfy the award, in whole or in party, by conveying separately titled property.

2011--- Parikh v. Parikh, Va. Ct. of Appeals, Unpublished, No. 1989-10-4
The trial court did not err in refusing to consider property which wife alleged that husband had an interest in but transferred into his brother’s name during the separation. Wife presented no evidence regarding the value of the property to enable the court to determine the same. Furthermore, wife was unsuccessful in admitting documents from the Indian government showing husband’s alleged interest in the property because the documents were not authenticated pursuant to Va. Code §8.01-390. Without evidence of ownership or value, the trial court did not abuse its discretion in refusing to include the property in its equitable distribution consideration.

2007---Didio v. Didio, Va. Ct. of Appeals, Unpublished, No. 0204-07-2
Trial court abused discretion in refusing to consider evidence presented by husband regarding his expenditure of marital funds after the separation of the parties for living expenses and payment of maritaldebts. Despite the fact that husband presented evidence, as did wife, through de bene esse depositions rather than ore tenus, the trial court stated in its letter opinion that “it was not in a position to parse through evidence submitted by husband.” Va. Code §20-107.3(E) requires that a court consider various factors when making an equitable distribution award, which requires consideration of testimony and/or documents submitted to the court and admitted into evidence. The court cannot arbitrarily ignore one party’s evidence once that evidence has been admitted

Trial court erred in refusing to consider evidence submitted by husband regarding amounts that he paid to board horses owed by the parties during the separation, based on the fact that husband testified as to a $400 per month fee paid, but also testified that he worked around the boarding business in exchange for a reduction in those fees. The $400 amount owed was uncontested, and the fact that husband paid part of that bill by working around the farm rather than through other pursuits or funds is irrelevant.

2005---Robinson v. Robinson, Va. Ct. of Appeals, Unpublished, No. 1837-05-4
The trial court did not err in appointing wife’s counsel as special commissioner and authorizing him to provide the signature of the husband “wherever required” for purposes of carrying out the court’s order that the marital residence be sold. The record supported the finding that husband had unreasonably refused to cooperate with the court’s order requiring the sale. Contrary to husband’s contention that the order appointing wife’s counsel as commissioner was an order authorizing counsel to act in a “judicial capacity,” the execution of documents necessary to complete the sale pursuant to the court’s orders was purely ministerial in nature and did not alter the substantive terms of the court’s orders.

2003---Hart v. Hart, Va. Ct. of Appeals, Unpublished, No. 0952-02-3
The trial court did not exceed its authority in appointing wife's counsel as special commissioner and authorizing him to convey husband's share of a parcel of real estate to wife, pursuant to wife's proper exercise of a provision in the final decree allowing her to purchase husband's interest. A year after the Court of Appeals ruled that wife had properly asserted her buy-out right, husband had still failed to convey the property to wife. Va. Code §20-107.3(K) grants to courts the continuing authority to make additional orders necessary to effectuate and enforce equitable distribution orders, and that authority includes the power to appoint a special commissioner to transfer any property when a party refuses to comply with a prior order to transfer such property·

1987--- Bowers v. Bowers , 4 Va. App. 610
Va. Code 20-107.3 mandates that trial courts determine the ownership and value of all real and personal property of the parties. But, consistent with established Virginia jurisprudence, the litigants have the burden to present evidence sufficient for the court to discharge its duty. Where the party with the burden of proof on an issue fails for lack of proof, he cannot prevail on that question. Furthermore, reviewing courts cannot continue to reverse and remand equitable distribution cases where the parties have had an adequate opportunity to introduce evidence but have failed to do so. Parties should not be allowed to benefit on review for their failure to introduce evidence at trial.

§ 5-2. Classification

(A) Generally

2015---Epps v. Epps, Va. Ct. of Appeals, Unpublished, No. 1077-14-1
The trial court did not err in declining to classify and divide Wife’s military retirement in its equitable distribution order. When making an equitable distribution of property pursuant to Code of Virginia § 20-107.3, a court must, upon request, classify the property as separate or marital, assign a value to the property based on the evidence presented, and then distribute the property to the parties taking into consideration the factors in § 20-107.3(E). However, the burden is always on the parties to present the court with sufficient evidence of the property subject to equitable distribution. A court may, without violating § 20-107.3, make a monetary award without classifying and valuing every item of property where the parties have been given a reasonable opportunity to provide the necessary evidence to prove classification or valuation, but through their lack of diligence, have failed to do so. Here, Husband failed to establish the date wife entered the military, the date she retired from the military, and the length of time the parties were married while wife was enlisted in the military. Accordingly, the trial court could not properly classify Wife’s military retirement or determine if there was even a marital share.

2014---Anthony v. Skolnick-Lozano, 63 Va. App. 76
Under Code of Virginia §20-107.3(A)(3)(g), courts may consider comingling of property that occurs before the marriage in determining an equitable distribution award.

2013---Cabral v. Cabral, 62 Va. App. 600
Property owned by third parties, including property owned by a corporation which is in turn owned entiretly by one or both parties, is not marital property subject to equitable distribution. (Citing Brett Turner, Equitable Distribution of Property, §5:51).

2013---Layman v. Layman, 62 Va. App. 134
The trial court erred when it determined that Husband’s separate property was comingled with marital property when the parties used marital funds to repay a loan secured by the separate property. The Court of Appeals determined that using separate property to secure a loan, even if the loan is used for marital purposes and repaid using marital funds, does not transmute the separate property that secures the loan into marital property. The discharge of an encumbrance using marital funds generates marital equity only if loan proceeds are used to acquire the encumbered property. In this case, Husband’s separate property was acquired through inheritance and the proceeds of the loan were used to add value to the property and to acquire additional property. While the value added by the loan proceeds is marital property, the separate property used to secure the loan remains separate property.

2012---Neuhs v. Neuhs, Va. Ct. of Appeals, Unpublished, No. 2381-11-3
The trial court did not err in classifying an LLC owned by the parties as marital, despite fact that real estate parcels held by the LLC were either acquired by husband prior to the marriage or acquired in exchange for property owned by husband prior to the marriage. Though husband testified that he never intended that wife have any interest in the LLC, Wife testified that the LLC was formed because the parties were looking for a way to acquire real estate for investment purposes for their immediate needs and for their retirement. Both parties were involved in the operation of the LLC, regularly conversed with the tenants, organized and paid for repairs, received and deposited rent payments, had joint signatory authority on the bank accounts of the LLC, and frequently commingled LLC funds with their personal bank accounts.

2012---David v. David, Va. Ct. of Appeals, Unpublished, No. 0653-12-2
The trial court erred in classifying a brokerage account owned by husband prior to the marriage as marital property based solely on husband’s research and trading activities during the marriage. Though wife demonstrated “personal efforts” by husband with regard to the account, she failed to show how husband’s research and trading imparted intrinsic value to the appreciation in the account and materially changed the character of such appreciation from separate to marital.

2011--- Moore v. Moore, Va. Ct. of Appeals, Unpublished, No. 0117-10-4
The trial court did not err in classifying the $69,000 that husband withdrew from a marital account to purchase a house after the separation as marital property, despite the fact that, as of the date of the hearing, the $69,000 had already been spent. The trial court was entitled to conclude that husband’s appropriation of this asset was a negative contribution to the marriage without necessarily concluding that the expenditure constituted marital waste. Moreover, the fact that husband no longer had the $69,000 did not change the value of the $69,000.

2011---Whitmore v. Whitmore, Va. Ct. of Appeals, Unpublished, No. 1644-10-4
Trial court properly classified the parties' dog as marital property. Evidence revealed that the dog was acquired during the marriage, and that the dog's registration with the American Kennel Club was in the parties' joint names.

2011--- Brock v. Brock, Va. Ct. of Appeals, Unpublished, No. 1353-10-3
The trial court did not err in finding that an IRA account acquired by husband during the marriage was husband’s separate property. Eight years prior to separation, wife endorsed a “Spouse’s Consent to Withdrawal” which allowed husband to liquidate a marital 401-k account. Upon liquidating the account, husband and wife equally divided the funds, and husband placed his portion in the IRA account at issue. Despite wife’s argument that a written agreement, signed by both parties, was required to transmute the proceeds from the marital 401-k account to separate property, the trial court properly held that the oral agreement by the parties to divide the funds, followed by their actual performance of that agreement, was sufficient to transmute the property.

2010---Dunfee v. Dunfee, Va. Ct. of Appeals, Unpublished, No. 0870-10-4
Trial court did not err in holding that property owned by husband prior to the marriage was transmuted into wife’s separate property when wife retitled and refinanced the property into her sole name, despite the fact that wife did so without consulting husband and while husband was in the hospital for delirium tremens (severe alcohol withdrawal).

2010---Tucker v. Wilmoth-Tucker, Va. Ct. of Appeals, Unpublished, No. 2008-09-2
The trial court erred in finding that post-separation increases in the value of husband’s separate stock, which were due in part to husband’s personal, post-separation efforts, were marital property. Any increase in the value of those separate shares resulting from husband’s personal efforts after the separation of the parties was husband’s separate property.

The trial court did not err in using the value on the date of acquisition and the value on the date of separation to classify certain property, despite the fact that neither party moved the court for an alternative valuation date pursuant to Va. Code §20-107.3. Because the dispute regarding the property involved classifying the increase in the value of the property during the marriage and after the separation, the consideration of the values on dates other than the date of the hearing served a different purpose (classification) than did the valuation on the date of the hearing (valuation). Thus, husband was not required to move the court for use of an alternative valuation date.

2010---Spreadbury v. Spreadbury, Va. Ct. of Appeals, Unpublished, No. 1053-09-4
Trial court did not err in classifying as marital property a farm that the parties had transferred into a revocable, inter vivos trust. Although wife argued that, because the property was owned by the trust and not by the parties, it should not have been considered for purposes of equitable distribution, the fact that the trust was revocable meant that no legal interest in the trust property existed in anyone except the parties, as settlors of the trust. The retention of the right to revoke the trust by each party supported the conclusion that neither had the requisite donative intent to transform the marital property into separate property, and because the parties expressly reserved the power to revoke the trust, the property was still owned by the parties, and thus subject to equitable distribution as marital property.

2009---Shiembob v. Shiembob, 55 Va. App. 234
Generally, the character of property at the date of acquisition governs its classification pursuant to Va. Code §20-107.3. Stratton v. Stratton, 16 Va. App. 878 (1993).

Trial court erred in classifying restricted stock shares which, though received by husband prior to the parties' separation, had not vested prior to the parties' separation and would not vest unless husband continued employment with the company into the future.

2009---Duva v. Duva, 55 Va. App. 286
Trial court erred in holding that husband's separate property was transmuted to marital property due to the commingling of marital funds used to pay the mortgage on that property. Pursuant to Va. Code §20-107.3(A)(3)(d), the marital funds, when used to pay the mortgage on separate property, were commingled with the separate property and were therefore transmuted to separate property. The burden then landed on the wife to trace the contribution of the marital funds to retain the classification of those funds as marital, and to potentially argue that the contribution created hybrid property. By failing to consider (a) that the marital funds used to pay the mortgage on husband's separate property were commingled with that separate property, and were therefore transmuted to separate property, and (b) whether wife was able to retrace the funds used to pay the mortgage back to marital property, the trial court applied the wrong standard for classifying the property.

2009---Lightburn v. Lightburn, Va. Ct. of Appeals, Unpublished, No. 0180-09-2
Trial court erred in classifying vehicles acquired by the parties during the marriage as husband's separate property, absent any testimony or documentary evidence by the husband that he bought the vehicles with his separate property. "If no evidence is presented upon which the [judge] could properly identify and then classify an item as separate or marital property, faced with the statutory presumption and the lack of satisfactory evidence to rebut it, the [judge] must classify the property as marital," (citing Courembis v. Courembis, 43 Va. App. 18 (2004)).

2009---Attiliis v. Attiliis, Va. Ct. of Appeals, Unpublished, No. 1087-08-4
The Court of Appeals implicitly agreed with trial court that a capital loss tax credit is considered an asset subject to division in equitable distribution. (Federal tax law allows capital losses to offset capital gains of a like nature and/or up to $3,000 of ordinary gross income. Capital losses that cannot be fully used to offset income or capital gains can be carried over to the next year. See Internal Revenue Code §1211.)

2006---Johnson v. Johnson, Va. Ct. of Appeals, Unpublished, No. 0037-06-4
Trial court did not err in determining that Wife retained her separate interest in the warehouse leasing business despite the fact that the business' profits were used to reduce the mortgage on its sole asset and that the parties' conversion of the business from a partnership to a limited liability company during the marriage did not make the business marital property.

2006---Whitaker v. Whitaker, Va. Ct. of Appeals, Unpublished, No. 2343-05-4
Trial court erred in failing to classify Navy Federal Credit Union account as either marital, separate, or part marital/part separate property.

2005---Jacobson-Kaplan v. Kaplan, Va. Ct. of Appeals, Unpublished, No. 0509-05-1.
The trial court did not err when it ordered the equitable distribution of educational accounts established for the children of the parties. Each child had a prepaid college tuition account, titled in Wife’s name with the children named as the respective beneficiaries. The Wife had access to the accounts and could withdraw any or all of the funds at any time. Though the accounts were established during the marriage, the conflict in the evidence regarding the source of the funds in the account was never resolved. If the money did in fact represent gifts to the children and not the deposit of marital funds, as Wife contended, then the accounts should remain for the children and not be subject to distribution. The Court of Appeals vacated the equitable distribution of the accounts and remanded to the trial court to determine the source of funds therein.

2005---King v. King, 46 Va. App. 677
Although the losses that gave rise to federal income tax refunds were generated by Husband's separate property, the tax refunds were jointly-titled marital property, equally owned by the parties, and, pursuant to paragraph 14 of the Premarital Agreement, should have been equally divided.
Moreover, the loss to Husband's property was but one of the factors that produced the amount of the award. Had the parties not filed jointly, the amount of the refund would have been substantially less, and the wage withholding of both parties contributed to the size of the refund.

2004---Courembis v. Courembis, 43 Va. App. 18
The plain reading of Va. Code § 20-107.3(A)(3)(a) confirms that personal efforts by either party during the marriage may increase the value of property and that such an increase is marital property. If separate property appreciates because of the owning spouse’s efforts alone, the appreciation is a fruit of the marital tree, and thus marital property, (citing Turner, Equitable Distribution of Property §5.22).

Wife’s testimony that she spent “a couple of days” organizing and helping conduct an auction of property that husband owned prior to the marriage was insufficient as a matter of law for purposes of proving significant contributions to an increase in the value of the property during the marriage. However, wife’s testimony that husband filed a site plan on the property during the marriage, which, according to expert testimony, increased the value of the property three-fold, was sufficient to demonstrate that husband’s significant personal efforts during the marriage resulted in an increase in the value of the property, and thus, an increase in the marital component of that value.

Trial court did not err in finding that husband rebutted the presumption that real estate he acquired during the marriage was separate property, based on husband’s testimony that the funds used to purchase the property came from a liquidation and refinance of properties that wife did not contend were husband’s separate property. Husband testified that the money he received from the liquidation and refinance were never placed in a joint account nor were they commingled with marital property. Despite wife’s argument that husband failed to produce any bank statements, checks, or deposit slips tracing the funds from their purported source to the purported destination, the trial judge did not abuse his discretion in determining that husband’s testimony was more credible than wife’s.

Trial court did not err in finding, given expert testimony that the rezoning of a parcel of real estate owned by husband significantly increased the value of the property, that wife’s efforts to re-zone the property, her completion of application papers and her lobbying of zoning board members and local citizens for the rezoning constituted the expense of significant personal efforts such that the increase in the value of the property could be deemed marital.

Wife’s evidence that she “managed” proceeds received from the sale of husband’s separate properties, was an officer and director of the corporation that oversaw those properties, and maintained banking records and financial documents related to the corporation and the sale of the properties was insufficient proof that the sale proceeds had been transmuted to marital property. Husband testified that he did not commingle the proceeds with marital property, did not retitle the proceeds into the joint names of the parties, and did not intend to gift the proceeds to wife.

2004---Cirrito v. Cirrito, 44 Va. App. 287
Trial court erred in finding that a lump-sum payment that husband received during the marriage pursuant to a non-compete clause that he signed with his employer prior to the marriage was separate property. The non-compete agreement provided for payment to husband in the event that he forewent employment related to the company’s business for one-year upon leaving the company. The right to receive the money was acquired during the marriage based on husband’s actions in abiding by the contract during the marriage, and is therefore marital property.

2003---Fowlkes v. Fowlkes, 42 Va. App. 1
Trial court erred in classifying wife’s residence as part marital and part separate property as the result of an addition, which husband paid for in part with separate funds prior to the marriage, but which wasn’t completed until after the marriage. Both parties conceded that wife’s residence, with the exception of the addition, was separate property, and both parties conceded that the addition was paid for with separate, pre-marital funds. Although wife previously agreed that she would re-title the residence in her and husband’s name in exchange for husband’s separate property contributions for the addition, she ultimately refused to do so after the marriage and the completion of the addition. The trial court erred in holding that the building of the addition constituted a commingling of marital property with separate property, as the addition itself was not marital, but separate, because it was purchased with separate funds. Thus, the addition constituted merely the commingling of wife’s separate property with husband’s separate property, leaving no marital property for the court to divide.

2003---King v. King, 40 Va. App. 200
Trial court erred in classifying as marital a tax refund, which resulted from substantial losses claimed on husband’s separate property, based on the fact that the parties filed joint tax returns to take advantage of that loss. In itself, the exercise of the option by spouses to file a joint return should not be interpreted as the conclusive memorial of the intent to create a joint tenancy or to make a gift by one for the other. Courts must look beyond the simple execution of the return to the circumstances of the marriage. An income tax refund is nothing more than a return of income.

Here, the parties had entered into a pre-marital agreement which clearly provided that all financial consequences of the separate property that each respective party owned prior to the marriage would be borne by the respective owning party, and that all income, loss, liability, sale proceeds, etc. resulting from such separate property would remain separate property, regardless of any commingling. The agreement also provided that income earned by either party during the marriage would remain the earning party’s separate property. Because the parties expressly agreed that their respective incomes are and remain separate property, it follows that refunds specifically attributable to that separate property should also be part of each party’s separate estate. Thus, any portion of the refunds that husband was able to trace to his separate earnings and losses is husband’s separate property, and any excess is marital property, subject to distribution. Case remanded to determine what portion of the refund was attributable to husband’s separate property.

2001---Joynes v. Payne, 36 Va. App. 401
A bonus paid after the separation for work performed during and after marriage was part marital.

A split value life insurance policy was a deferred compensation plan and was marital property.

2000---Asgari v. Asgari, 33 Va. App. 393
Marital home was all marital property where Husband's separate funds were deposited into joint account prior to purchase, and identity of separate funds were lost in countless transactions so they could not be traced.

2000---Gilman v. Gilman, 32 Va. App. 104
Husband's pledge of his separate stock as security for down payment loans for real property investment was "exchange" under Va. Code §20-107.3. Husband's entire interest in developments were separate, not marital. He invested separate property as down payment, and Wife failed to prove that debt was paid with marital funds or that substantial increase in value was attributable to personal efforts of parties.

2000---Rowe v. Rowe, 33 Va. App. 250
Increase in value of newspaper is marital to the extent it is a result of Husband's personal efforts.

1999---Kelln v. Kelln, 30 Va. App. 113
Trial court ruled that marital property divided into separate shares for estate planning purposes was separate property not subject to division. Reversed.

1999---Moran v. Moran, 29 Va. App. 408
Spending marital funds to renovate Wife's separate property did not alone make the increase in value marital property (cause and effect must be established); spending marital funds to pay the mortgage on that property changed the property from separate to hybrid; passive income earned on pre-marital contributions to pension plan was former Husband's separate property.

1998---Luczkovich v. Luczkovich, 26 Va. App. 702
Severance pay negotiated two years after separation was Husband's separate property.

1998---Rahbaran v. Rahbaran, 26 Va. App. 195
If separate property is contributed to marital property, contributed to the acquisition of new property, or re-titled in the names of both parties, and
suffers a loss of identity, the commingled separate property is transmuted to marital property.

Even if a party can prove that some part of an asset is separate, if the court cannot determine the separate amount, the unknown amount contributed from the separate source transmutes by commingling and becomes marital property.

1997---von Raab v. von Raab, 26 Va. App. 239
Entirety of Husband's separate interest in marital residence was transmuted to marital property during the marriage. Husband used separate equity in home to obtain short-term loan. Later, Husband re-titled house in Husband's and Wife's names in order to obtain permanent financing on the initial loan. As a result, Wife becomes jointly liable on the debt, thereby breaking the chain of re-traceability of Husband's separate equity.

1996--- Cummings v. Cummings, Va. Ct. of Appeals, Unpublished, No. 2645-94-3
Trial court erred in finding that wife’s efforts in overseeing the renovations of two properties which Husband owned prior to the marriage constituted “marital efforts” sufficient to establish a marital property interest in either property. Husband, as owner of the properties, entered into a valid contract with Wife, as a real estate agent, whereby Wife was to oversee the renovations and be compensated a fixed amount for her efforts. Thus, wife’s contributions to husband’s separate property were contractual, not marital.

1993---Stratton v. Stratton, 16 Va. App. 878
Trial court erred in finding that real estate initially held by a business that was marital property, but subsequently purchased from the business by husband with husband’s separate funds, was marital property. Though the marital business purchased the land originally, making it marital property, husband later purchased the land with funds that he successfully proved as separate, and maintained the land separately from the marital estate. There was no evidence that the purchase transaction was fraudulent or without adequate consideration.

1993---Floyd v. Floyd, 17 Va. App. 222
Premarital contributions to marital property should be considered.

1993---Huger v. Huger, 16 Va. App. 785
Where issue is whether separate stock was transmitted to marital, evidence failed to show that the stock received any enhancement in value due to the parties' efforts that was not otherwise fully compensated by the corporation.

1993---Dietz v. Dietz, 17 Va. App. 203
Stock options earned during the marriage, whether vested or non-vested at the time of the separation of the parties, are “deferred compensation” subject to division under Va. Code §20-107.3(G). A trial court has the authority to award up to fifty percent of the marital share of cash benefits actually received by the party against whom the award is made. The trial court defined the marital portion of the stock options, similar to a pension, as a fraction, the numerator of which was the number of months husband was covered by the stock option plan prior to the date of separation, and the denominator of which was the total number of months the husband was covered by the plan.

1990---Stroop v. Stroop, 10 Va. App. 611.
The trial court erred in classifying as Wife’s separate property land acquired during the marriage with funds earned by Wife during the marriage. The fact that the property was titled solely in Wife’s name does not place the property beyond classification as marital property.

1987---Price v. Price, 4 Va. App. 224
In most cases, the appropriate date for purposes of classifying property as either marital or separate is the date of separation, as that is the date which constitutes the de facto dissolution of the marriage partnership.

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