How DO we reach a settlement?
You probably already know, if you’ve been doing any kind of research on how divorce works in Virginia, that most cases these days are settled with a separation agreement. A separation agreement is, as you’ve probably already discovered, a legal contract that divides the assets and liabilities of the parties between them—somewhat “fairly” or “equitably.” It may not always be 50/50, but it’s usually (if we’re being honest here) somewhere pretty close to that.
A separation agreement is one option when it comes to divorce, and it can be achieved in a number of ways. You can get a separation agreement in place trough mediation, collaboration, negotiation, or even by handling the whole thing yourself. Attorneys tend to talk about all these things as different “ways” of getting a divorce when, in reality, they aren’t all that different. The road may look a little different, but, ultimately, these are just different means to the same end.
When it comes to the divorce process, there are really only two options. You either (1) negotiate a separation agreement, or (2) go to court. When you go to court, you lose control over the process. It stops becoming a discussion about what the two of you are comfortable with and becomes a fight. In the courtroom, you present evidence supporting your view of how things should be divided while he presents his view. It’s adversarial, and it’s often stressful and difficult for the parties involved. Ultimately, the judge makes a decision about how things will be divided and you have to live with his decision. As you can probably already tell, it’s not exactly an ideal situation.
Most people opt for a separation agreement, unless they’re forced to take other action (usually, by a husband who refuses to agree to anything or, in some cases, a religious belief that a fault-based ground must be used to allow the divorce).
But, if you’ve been married for any length of time, there are a lot of things to divide (leaving custody, visitation, and child support out of the equation for right now). In most cases, there are houses, cars, retirement accounts, credit cards, life insurance, and personal property. In other cases, there’s even more—including stocks, bonds, mutual funds, pensions, vacation houses, investment properties, family businesses, boats, jet skis, airplanes (yeah, sometimes even airplanes!), student loans, home equity lines of credit, second mortgages, motorcycles, guns, expensive tools, and other items to divide.
Additionally, property can be classified in different ways, depending on when and how it was earned, accumulated or acquired. In Virginia, property can be classified as separate, marital, or hybrid.
Separate property is anything that was earned, acquired, or purchased prior to the marriage, or anything that was earned, purchased or acquired during the marriage by gift (from someone other than your spouse) or inheritance. Any money received from a personal injury suit is also separate.
So, what does that mean? Let’s discuss some examples. The car you bought (and paid for in its entirety) prior to marriage is your separate property. The car your mom gave you after your marriage (gave just to you, and not to you and your husband jointly).
Likewise, any inheritance you receive, whether it’s an amount of money, a piece of real estate, or an item of personal property, is yours separately, provided that it was inherited by you individually and not given to the two of you jointly.
Marital property is anything earned, purchased, or acquired during the marriage, regardless of title. It doesn’t matter whether you bought a car and titled it only in your husband’s name; if you purchased it during the marriage and made payments with marital money, it is a marital asset and subject to division in your divorce.
Almost everything you earn, purchase, or acquire during the marriage will be considered marital.
You’re probably wondering about everything else. What about those things that are a little bit of both? We call them hybrid. A hybrid asset is part marital and part separate.
Take, for example, a retirement account. You started it when you started your job, which was prior to your marriage. Then, you got married, and you continued to make contributions, like a responsible adult should. The portion that you contributed prior to marriage is yours separately, as is any appreciation that has resulted from those early contributions. The portion that you contributed after marriage is a marital asset, and subject to division. Since it’s one asset and it’s part marital and part separate, it’s hybrid.
We also see this fairly often when it comes to houses or other real estate, but there are a couple of different possible scenarios.
Scenario #1. You bought a house prior to marriage, and you live in it after marriage. You made a down payment and some mortgage payments that were separate, but other payments were marital. You also made some improvements to the property with marital money (we call this “sweat equity”, and it also builds your spouse’s interest in the home).
In this type of case, the house still “belongs” to the spouse who purchased it separately prior to the marriage, but the other party has a marital interest. Usually, this interest is quantified as a dollar amount and ultimately paid out by the spouse who owns the home.
Scenario #2. You owned a house or condo prior to marriage. When you got married (or shortly before or shortly thereafter), you sold the house or condo, putting the proceeds into the marital home. The money from the original house or condo is yours separately, because it can be traced back as your separate property. You put it into an asset that you then make regular monthly payments on (from the marital money)—which makes it a hybrid asset. What you originally invested is still yours separately, but the other spouse has an interest, too. It’s possible that the other spouse may have made a similar separate contribution, too. But then whatever you paid after marriage from marital funds is marital property.
So, you’re probably wondering—how do we begin to even divide that stuff? How do we know what a value is, assign it to a particular item, and continue with our negotiation? Isn’t it impossibly hard?
Well, usually, no. Most of the time, it’s not that hard. We do these types of things all the time, and part of the reason you hire an attorney is so that someone else will worry about these things for you.
When it comes to an agreement, almost everything is negotiable anyway. We figure out what a realistic value for an asset is, based on a number of different resources, depending on the asset. For a car, we’ll get Kelley Blue Book value. For a home or other piece of real property, we can look at a city assessment, Zillow, a mortgage statement, or hire a separate appraiser to determine the value. For a business, we can hire a business valuator or CPA to help determine what it’s worth. We have plenty of methods at our disposal.
Of course, how this all moves forward depends on the “type” of divorce you select. I hesitate to call each method a different “type of divorce,” as I’ve already discussed, because I think that’s a little bit misleading. The end goal is the same (a separation agreement) with the objective being to obtain an uncontested, no fault divorce. Still, the means you choose to reach that goal can have a lot to do with how you proceed and what happens to you along the way. Let’s talk about what the differences are, and how the divorce might proceed.
In a mediation, you and your husband share a mediator. A mediator may or may not be an attorney but, in a mediation, he (or she) is not acting as an attorney. It is a mediator’s job to help the two of you reach an agreement. It is NOT a mediator’s job to advise you of your rights, tell you whether your agreement is a good one or bad one, or educate you about what the court might award.
Usually, we recommend that, for people considering mediation, they meet with an attorney both before and after mediation. Beforehand, you can go in and get an idea of what you can expect to receive, and what acceptable ranges might be. You can get advice about what might happen in court, and what is and what is not negotiable. Afterwards, you can have an attorney review the proposed agreement, so that you can be sure that it’s written appropriately and protects you in all the ways an agreement is supposed to protect you. (Since mediators aren’t normally attorneys, there are a lot of things they’re usually missing—things that are designed to protect you! Don’t skip this step!)
Mediation is usually a long session, but sometimes as many as two or three, during which you negotiate back and forth on the issues you need to resolve.
In a collaborative case, both you and your husband hire collaboratively trained attorneys, as well as a team of skilled professionals to help you negotiate your separation agreement. You’ll hire, in addition to your attorneys, a divorce coach for each of you (a trained mental health professional who will help you handle the tricky parts of the process in a healthy and productive way), a child specialist (if there are children involved), and a financial specialist. Both the child and financial specialists are shared between the two of you, and will ultimately make a recommendation regarding what, in their opinion, is in the best interests of all parties involved.
It’s not a traditional attorney/client relationship, because it’s not adversarial. To move forward with collaborative divorce, you make a pledge to avoid court (in fact, if you do wind up in court, you must do so with new counsel; your collaborative attorney can’t help you) and to provide all the information to the other side. Collaborative divorce is the process of an open and honest discussion. Usually, a separation agreement is achieved after a number of meetings together, with some portion of the group (not all the professionals are present at every meeting). In our office, Sheera Herrell is collaboratively trained.
Negotiation is a sort of catch-all word we use to describe the process when a person hires an attorney to represent her in a separation agreement case (though not in a collaborative capacity). This IS an adversarial process; it’s not like collaboration where you agree to put all the cards on the table, so to speak. It’s not as adversarial as if you were filing for divorce and preparing to litigate, but still—the idea is that you’ve hired your attorney to represent you, and to represent your best interests exclusively. It’s not as nice and open of a negotiation as it is in a collaborative divorce (which may or may not be what you want).
In a negotiation, usually the person who hires first has an agreement drafted, which is then mailed either to the other side if he’s nor represented by counsel, or directly to his attorney if he is represented by counsel. Then, from that point, it’s a back and forth negotiation. Obviously, the first draft of the agreement is as hard-hitting as it comes (so don’t be surprised if your husband has sent you one and it’s dramatically in his favor). The purpose of this is to provide a place from which to begin to bargain and negotiate. Depending on the people and attorneys involved, the process can take awhile, but probably usually takes somewhere between 6 months and a year and a half.
If you don’t have attorneys involved, you can still negotiate an agreement on your own behalf with your husband. There are free form agreements available online that you can look at (though I can’t say that I recommend doing that), and plenty of free books (like the ones on our site) and other materials (like this blog!) that give information about what you’re entitled to receive in Virginia.
Beware, though. Make sure that anything that you’re using is up to date, Virginia-specific, and authored by someone that you can see and trust. (Trust me, credentials matter!) You don’t want to be so concerned about saving money that you end up costing yourself more in what you gave up in the divorce than what you would have spent on just having someone help you through it. Nameless, faceless internet sources are always risky, especially when you’re trusting that source with something as important as your divorce.
Negotiating is an art, but it’s not impossible. You can hire an attorney to help you, go through a mediator, or even do it yourself (with or without extra help). There are lots of things that happen during a divorce but, with a little patience and help along the way, it all works out.
Keep your chin up. Need a little extra help? Get more information by talking to an attorney in person at one of our Second Saturday divorce seminars. It’s not one-on-one, like you’d have at one of our consultations, but it’s a great way to get general divorce information, ask a couple of your questions, and meet with a licensed Virginia divorce attorney without spending a fortune. The cost to attend is $50 at the door, or $40 if you pre-register online. For more information, or to schedule a one-on-one appointment instead, give our office a call at (757) 425-5200.