In a divorce, we divide marital property. What constitutes marital property can vary from state to state, so you should familiarize yourself with the laws in your particular state – or Commonwealth, as in the case of Virginia, where I practice.
Though I imagine that the words may vary but the specific application is similar from state to state, I’ve only ever practiced in Virginia. Family law, though, is one of those areas of law that is exclusively governed at the state level; there’s no federal regulation of divorce and/or custody cases. So, there can be a LOT of variation from place to place, and it can be difficult to get a sense, on a larger scale, of how all of the concepts are similar (or different) from each other.
In Virginia, though, marital property is anything earned, purchased, or acquired during the marriage regardless of title.
There are a couple of important pieces of information in that definition.
For one thing, it’s ‘earned, purchased, or acquired’ during the marriage.
Basically, when we are trying to determine whether an asset is marital (or separate or hybrid; these are the only three classifications for property in Virginia), we look at the source of that asset or liability. Was it earned during the marriage or not? If so, it’s marital; if not, it’s either separate or hybrid.
What does ‘earned during the marriage’ mean? Well, it’s pretty straightforward, really – but, for example, what you earn at your job during the marriage is a marital asset, even if it’s only your name on the paystub. Other money that you might have coming in, like from a trust fund or an inheritance, would be separate, because it doesn’t originate from the marriage. Your trust fund would come from your family – and not by any marital contribution between the two of you – and an inheritance would come from the estate of whoever left you the money – again, not as a result of any marital contribution between the two of you.
Separate property is what you earned, purchased, or acquired prior to the marriage, or anything that you received during (or before or after) the marriage that was a gift to you by someone other than your spouse, an inheritance, or something like a personal injury settlement. So, we look at where the money comes from to determine how to classify it.
For another thing, we classify it as marital (or separate or hybrid, whatever the case may be) regardless of title.
It doesn’t matter if the house or the car was purchased in only one spouse’s name. Though it may matter in the sense that, if your name isn’t on the house, he can sell it without your signature being required, it doesn’t impact the fact that, under Virginia law, the marital portion is divisible in divorce.
If the house was bought during the marriage and paid for with marital money, we don’t care whose name is on it – we divide it in the divorce. You have an interest in assets even if your name was never on them at all.
We often hear that men like to try to convince their wives that they aren’t entitled to things. One of the most shocking parts of this is that their wives often believe them! They believe that it’s that easy to have been tricked out of receiving a portion of something that was paid for during the marriage with marital money.
It’s not a big deal that they’re temporarily confused, if they’re able to correct that misunderstanding later. But the biggest issue I see with this is that the husbands then try to use this to convince their wives to sign agreements to that effect. It’s not the lie so much as the intent behind it – all designed to hoodwink their spouse out of receiving the benefit of an asset that she needs and has contributed towards during the marriage.
No, no, no – don’t trust him! Get your own, independent advice before you accept that you are not entitled to receive a portion of an asset.
If it was earned during the marriage and paid for with marital money, you have an entitlement to your portion of the marital share.
What about marital debt?
It’s tempting to focus our conversation on assets, isn’t it? That’s why I make sure to always specifically say ‘assets OR liabilities’.
The same principles apply to dividing the liabilities, too. If it was acquired during the marriage, it’s marital debt. Or, at least, that’s where the analysis starts. We may be able to argue that debt isn’t marital, if it wasn’t incurred for a marital purpose, but the burden of proof would be on us to provide documentation to support our theory.
Debt might not have been incurred for a marital purpose if (1) he’s using money to, for example, wine and dine a mistress, (2) he has a gambling or drug addiction problem, (3) it’s classified as a ‘waste’ of assets, and so on. There may be other examples, but those are the most common ones I see.
‘Waste’ is probably the most vague. In general, I see this happen when one party racks up the bills because of the impending separation. I’ve heard of this happening in a number of different ways. A husband who takes the military STAR card and uses it to buy thousands of dollars in new Apple products, and then tries to make the wife split the debt. A wife who goes to Chanel and purchases a new post-divorce wardrobe, and tries to get her husband to share part of the debt. Sometimes, too, this can apply in the case of a large purchase that was not previously discussed by the parties, usually something like a motorcycle or a boat. (Remember, though, that in the case of an item like this, we’d only divide the equity; there can often be a loan associated with the ‘asset’, too – so there may be very little equity and, in any case, the debt associated with the boat or motorcycle would go with him, as the purchasing party.)
Debt isn’t necessarily divided 50/50, especially in a case where one party earns significantly more than the other. It can depend dramatically on the circumstances, so it’s wise to talk to an attorney about your debt alongside your assets!