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How to determine whether gifts are separate or marital property
When it comes time for spouses to divide their property during a divorce, they sometimes find that some of their most valuable assets are gifts they’ve received from family, friends and others over the years. Unfortunately, they must determine which of their assets are separate property and which are marital property under Virginia law.
This process may not be as obvious as it might seem. A lot of divorce disputes arise over assets that were gifts – even gifts between spouses.
When is a gift considered separate property?
It’s important to agree on which assets are each spouse’s separate property. A gift is typically considered separate property if a spouse received it prior to the marriage or if it was given to one spouse by a third party during the marriage (for example, as a birthday present).
Sometimes, however, these gifts can become marital property if the gift is something both spouses use. For example, one spouse’s parents may give them a car. If the other spouse uses it regularly, puts gas in it and takes it in for regular maintenance, an argument can be made that the car has been commingled with marital property.
For some, collaborative divorce is a smarter way to sever ties
Divorce doesn’t have to mean courtroom battles and emotional turmoil. For couples seeking a less adversarial process, collaborative divorce can offer a dignified alternative.
This approach focuses on mutual respect, open communication and shared solutions, making it particularly suitable for those who wish to avoid litigation while prioritizing their well-being and that of their family.
Possible benefits of collaborative divorce
Collaborative law promotes a cooperative environment, helping reduce divorce stress and foster healthier relationships post-divorce. It encourages open dialogue, helping couples reach agreements tailored to their unique needs regarding parenting plans, property division and financial arrangements.
Unlike litigation, the collaborative approach keeps the process private and confidential, avoiding public court records. Additionally, collaborative divorce is often more cost-effective and quicker than prolonged legal battles, saving couples time and money while preserving their peace of mind.
How mediation can help children when their parents divorce
Mediation is a common litigation alternative during divorce. Spouses sit down to discuss their disagreements with a professional. They work toward a compromise that they both agree is appropriate.
Mediation can be beneficial for people in many different circumstances, such as those who feel strongly about achieving certain outcomes. Those with minor children may also want to consider mediation more carefully than those who do not have custody issues to address.
After all, mediation can help shield children from several of the most damaging aspects of divorce.
Helps reduce conflict
Disputes between parents can become very stressful for their children during a divorce. When they hear their parents fighting in the next room or arguing over the phone, the children may feel anxious or frightened.
Higher levels of conflict have a strong association with worse mental health outcomes for children after a divorce. The focus on cooperation during mediation can help parents improve their dynamic and limit how many arguments the children witness.
Should you close joint accounts when divorcing?
One of the key goals in a divorce is to separate your finances from your spouse’s. It’s part of gaining the independence from each other you desire. So how do joint bank accounts and joint credit cards fit into this?
You will need to close all your joint bank accounts and credit cards, yet this is not something to rush into as doing so could create problems.
Closing accounts together is the safest
If you close accounts and cards together, it can prevent accusations of the closing party trying to hide assets from the other or starve them of cash. Both of these have been known to occur in divorces. Some banks will insist you both sign to close accounts, others may allow just one of you to do so. In all cases, it is better to do it together.
Timing could matter
Let’s say you and your spouse agree that you will keep all the contents of one particular account. You move ahead, close that account and transfer the money into a personal account. Depending on the timing, that might push you over a certain tax threshold, and end up costing you more than if you had waited until later in the divorce process.
Do you have to divide student loans in divorce?
Divorcing couples need to split up their marital assets, such as the contents of a bank account or their retirement savings. They also have to split up their marital debts. This could include a car loan, credit card debt, a home mortgage and things of this nature.
Where some couples have questions, though, is when it comes to student loans. Clearly, if only one person is going to college, they are the one benefiting from those student loans. But is the debt owned jointly, and do they have to divide it during the divorce? Or does the debt just stay with the student?
When did they take on that debt?
Often, the question is when a couple acquired the debt. If they did so after they were already married, it is likely marital debt, and they are both responsible for making the payments. For instance, perhaps the couple got married, and then one person decided to go back to school so they could get an advanced degree. This benefits them both, and they agreed to the debt together, so they both have to pay it back—even though only one person is actually a student.
How does a collaborative divorce differ from a traditional one?
No law states a divorce must be a highly contentious affair with yelling. In fact, most people would prefer a more civil option.
Fortunately, a collaborative approach to divorce offers a way for couples to settle their differences without the courtroom drama.
Mutually beneficial
We are all familiar with the traditional divorce model. Each spouse has their own attorney to litigate on their behalf. The goal is to "win" on key issues such as child custody, property division and alimony. Formal court hearings can last for months, costing spouses time and money.
A collaborative divorce is focused on both parties coming to a mutual agreement. Before the process begins, they both sign a contract stating neither will pursue litigation. While they both may have legal representation, other professionals can also be involved. Financial advisors and family therapists can offer assistance to guide the decision-making. If negotiations break down and the divorce needs to move to court, they must hire new attorneys, and the whole process starts fresh.
What happens to the family business if owners divorce?
When a couple owns a business together, they both likely play an integral part in keeping it operational. They both put in hard work and a lot of hours to help the business to remain successful. It’s not a pleasant thing to think about, but a couple that’s considering divorce will have to determine the fate of the company.
There are a few options that they can explore for the family business. Taking a look at the circumstances and being realistic about what’s possible may help them to determine how to proceed.
Options for the business
Some people opt to sell or close the business because of the divorce. It can be challenging to find a buyer for some businesses, so that may not be possible.
One spouse may buy out the other’s share of the business. This would mean that the business is only owned by the buying spouse so the other spouse won’t have any remaining interest in it.
How can I make sure my retirement accounts are safe in my divorce?
If you’re like many Americans who have been in the workplace for a few decades or longer, a good deal of your assets may be in retirement accounts of various types. You may have a 401(k) or an individual retirement account (IRA). You may have a pension plan – particularly if you work for a local or state agency — or a thrift savings plan (TSP) if you work for the federal government.
If you are going through a divorce, you and your spouse may need to negotiate if and how you both want to divide your retirement accounts. If you’re not able to agree, a judge will need to make the decision based on Virginia’s equitable distribution laws. One advantage of choosing a collaborative divorce, however, is that it may allow you and your spouse to work out your property division plan outside of court, with the support of your individual legal representatives.
Dividing a 401(k) plan
If you have a 401(k) plan through your employer, you’ll likely need to use a qualified domestic relations order (QDRO) to divide it. This is for "qualified" plans like 401(k)s established under the Employee Retirement Income Security Act of 1974 (ERISA).
The benefits and drawbacks of using mediation for your divorce
Going through a divorce can be tough, emotional and daunting. As couples consider their options, mediation is among the common alternatives to traditional litigation.
But is mediation right for everyone? As you consider this option, you may ask: How can mediation help achieve a resolution to my divorce?
What is mediation?
The mediation process involves a neutral third party facilitating a conversation between two parties to help them reach a mutually beneficial agreement. A mediator does not make decisions for the parties but helps them identify common goals and find creative solutions to their disputes.
In a divorce, mediation can provide a forum for spouses to talk about and negotiate the terms of their divorce. The terms can include property division, spousal support and child custody.
Pros of mediation
Mediation can offer benefits, including cost savings, confidentiality and reduced conflict. In addition, mediation can allow couples to tailor their agreement to their needs and circumstances instead of getting decisions from the court.
Do co-parents need to use the same house rules?
When parents split up in Virginia, the court may issue a custody order. This typically addresses two main areas: Physical and legal custody.
Physical custody refers to where the child will live, which parent they’ll be with, and when the parents will make exchanges. One parent may have primary custody, while the other parent may simply have visitation rights or custody on the weekends. In other situations, custody may be an even 50-50 split. Every case is unique.
Legal custody, on the other hand, involves making important decisions on the child’s behalf, such as where the child will go to school or what type of medical care they will receive.
Rules may differ between households
That said, custody orders typically do not specify what rules the parents must use. For example, parents may have very different curfews for their children or different stances on when the children can use technology or certain devices. As a general rule, unless there is a clear danger to the child, the court allows parents to make these decisions independently.
A New Beginning for You and Your Family
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Located in Reston, VA, Nicole M. Burns, Attorney at Law represents individuals and families throughout the area, including Annandale, Arlington, Ashburn, Bristow, Broadlands, Burke, Centreville, Chantilly, Dale City, Dumfries, Dulles, Fairfax, Falls Church, Gainesville, Great Falls, Haymarket, Herndon, Lake Ridge, Leesburg, Manassas, McLean, Montclair, Nokesville, Oakton, Potomac Falls, Sterling, Tysons Corner, Vienna, Woodbridge, Fairfax County, Loudoun County, Prince William County, and Arlington County.
