Personal effort and income from separate property during divorce

On Behalf of | Aug 21, 2020 | Divorce

Virginia divorces can be contentious over a variety of issues, not the least of which is property division. Understanding marital property vs. separate property is one aspect of a case. However, there are circumstances in which the property can be categorized as part marital and part separate and the division will be based on personal effort in raising its value. Knowing what the law says about this can be a fundamental aspect of a proceeding and have a significant impact on the outcome.

Separate property vs. marital property

If a person had a certain property prior to the marriage, it is considered theirs even if the couple divorces. Also, if there is property accrued after the marriage and it is by inheritance, gift, devise or survivorship from anyone except the other party, it will be separate property. If separate property is sold, the proceeds belong to the spouse who entered the marriage with it or acquired it in the above ways. If there is income that came about through the sole effort of the spouse who owned it beforehand, it belongs to that spouse.

Marital property is anything that is titled to both after the marriage. That includes a pension, a plan for profit sharing, retirement benefits or anything else that was accrued after the marriage and does not fit into the categories listed above for separate property.

Income and personal effort in accruing property during the marriage

If there is income that was accrued due to separate property but it came after the marriage, it is marital property only if it is based on the personal efforts of those involved. In other words, there must have been some form of contribution on the part of a spouse who would otherwise not be entitled to it to increase the value and warrant it being considered marital property. For example, if there is a business that one spouse had started prior to the marriage and the other spouse helped with its advancement through individual effort, the value increase and profit can be considered marital property. Personal effort is the key. This involves how much labor, skill, managerial tactics, promoting, marketing or creating the landscape for the property to increase in value. If this is shown, then the threshold for marital property has been met.

Legal assistance may be essential with property division

People who are getting a divorce might be under the impression that any property they owned before the marriage and profited from after the marriage will belong to them. However, there is nuance to this law and the other spouse who would otherwise not be entitled to part of the separate property may in fact be eligible to receive a portion of the increased value if they contributed to it. For this type of disagreement or any other challenge that might come up as part of a divorce, legal assistance may be necessary. Consulting with legal professionals experienced in divorce and property division can provide information and guidance.