Property Distribution

§ 5-1. Generally
§ 5-2. Classification
(A) Generally
(B) Burden of Proof/Tracing
(C) Debts
(D) Gifts
(E) Hybrid Property
(F) Transmutation
§ 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
(E) Military
§ 5-8. Stock Options
§ 5-9. Enforcement / Satisfaction of Award

Chapter 5


§ 5-1. Generally

2018 --- Garza v. Garza, Va. Ct. of Appeals, Unpublished, No. 1286-18-4
The trial court erred by awarding Wife fifty percent of Husband’s retirement account as of an alternate valuation date, which reflected a higher value of the account before Husband withdrew funds to purchase a new home, when the trial court also awarded Wife a sum of money for her portion of the marital share of Husband’s new home. The two awards constituted a “double dip” into Husband’s retirement account.

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 of Appeals, Unpublished, No. 1077-14-1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.

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 of Appeals, Unpublished, No. 1989-10-4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 of Appeals, Unpublished, No. 0204-07-2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.

1988 --- Gologanoff v. Gologanoff, 6 Va. App. 340
The trial court did not err in refusing to grant Wife a monetary award where Wife did not present evidence sufficient to classify and value the settled property nor evidence of the present value of the unsettled retirement plan. In cases where parties are able to settle some property disputes, but choose to litigate others, evidence must be presented to the court concerning that portion of the settlement that they were able to accomplish. If their settlement placed a classification and value upon which they reached agreement, the Court must be informed of those classifications and values. If their settlement did not classify and value the property which they agreed to divide, the parties must then either agree upon classifications and values of the settled property or provide evidence upon which the trial court may classify the settled property as separate or marital and value the property. If, in accordance with the scheme contemplated by the statute, the trial judge is to make a monetary award based upon the unsettled property, the trial judge must be provided with a basis upon which to give effect to the parties' existing settlement.

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

2018 --- Oberlander v. Oberlander, Va. Ct. of Appeals, Unpublished, No. 1817-17-1
The trial court did not err in classifying the parties’ formal marital residence as wife’s separate property. After the parties separated, they executed a deed of gift transferring their respective interests in the residence solely to wife. Because wife acquired the residence by deed after the last separation, it is not presumed to be marital property. Further, the deed transferring ownership of the property solely to wife constitutes a valid marital agreement converting the property to wife’s separate property pursuant to Code of Virginia § 20-155.

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).

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.

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---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 marital 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 contest 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 resolving the conflict in the evidence in husband's favor.

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---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---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.

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.

1990 --- Stainback v. Stainback, 11 Va. App. 13
Trial court erred in classifying art works created by husband as husband’s separate property. Though the works were technically owned by a corporation, the trial court found, properly, that the corporation was merely an alter-ego of husband, was formed for the benefit of husband, and engaged exclusively in the business of husband and husband’s father.

The trial court did not err in determining that additional shares of stock, purchased with proceeds of a loan by husband’s father to husband during the marriage, constituted marital property. Though a signed promissory note was not introduced into evidence, husband acknowledged in pretrial depositions that the loan was a debt, and wife’s understanding was that the loan was to be repaid upon the sale of the stocks. Though husband’s father testified that he never intended to enforce collection of the debt, the Court of Appeals noted that had husband’s father died prior to formally forgiving the debt, husband would have been liable to his father’s estate. Accordingly, the trial court properly found that the shares were acquired during the marriage, for consideration, and not acquired in exchange for or from the proceeds of separate property.

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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