Month: September 2015

Spousal Support in Virginia

Spousal support is a form of monetary support paid to the more financially dependent spouse and is based on a number of factors, including length of the marriage and financial ability of each party. The terms “spousal support” and “alimony” (also “maintenance”) are generally used interchangeably. While the court may or may not award spousal support, parties are able to enter into agreements that provide for different combinations of support, payment methods, or durations. The parties can even waive their rights to spousal support by agreement, which the court cannot modify down the line. The Role of “Fault” on Spousal Support Before it may order support, a court first determines whether the spouse seeking support is barred from getting it. Generally, if a court finds a spouse is guilty of adultery, that spouse will be barred from receiving support, barring special findings. Even then, if a denial of spousal support “would constitute a manifest injustice,” a spouse who committed adultery may be eligible to receive support. Spousal Support Factors When deciding whether to award spousal support and how much, the court will consider the following factors:
  • obligations, needs and financial resources of the spouses, including income from pension, profit-sharing or retirement plans
  • standard of living established during the marriage
  • duration of the marriage
  • age and physical and mental condition of the spouses, and any special family circumstances
  • each spouse’s contributions, monetary and nonmonetary, to the well-being of the family
  • each spouse’s financial assets
  • provisions made with regard to distribution of the marital property
  • extent to which age, condition of special circumstances of any child of the spouses would make it appropriate for one spouse to stay home
  • the extent to which either spouse contributed to the other’s education, training, career position or profession
  • the spouses’ earning capacity and the current employment opportunities for people with that earning capacity
  • opportunity for and ability of the spouses to get education and training to enhance earning ability
  • decisions regarding work and parenting that the spouses made during the marriage, and their effect on earning potential, including the length of time either spouse has been out of the job market
  • provisions made with regard to distribution of the marital property, and
  • any other factors, including the tax consequences to each spouse, necessary to arrive at a fair result.
(Va. Code Section 20-107.1.) Spousal Support Guidelines In setting temporary or permanent support, the court will take into consideration the local guidleines. The Fairfax guidelines are frequently used to set temporary spousal support throughout the Northern Virginia Area. The calculation for support is as follows; WITHOUT CHILD SUPPORT: 30% Higher-earning spouse’s gross income MINUS 50% Lower-earning spouse’s gross income WITH CHILD SUPPORT: 28% Higher-earning spouse’s gross income MINUS 58% Lower-earning spouse’s gross income However, the calculations are not strictly adhered to, especially when the court is faced with a high-income family. For purposes of temporary spousal support cases, “high-income” is defined as parties with a combined gross monthly income of over $10,000. In those cases, the court will often consider the actual needs of the recipient in setting the spousal support award.

Who Gets the House? Equitable Distribution in Virginia

Divorce HouseThis is one of the first questions most divorce clients ask when they consult with an attorney and the answer, as with most legal questions, is “it depends.” In Virginia, spouses go through a system of property division known as “equitable distribution,” the process of dividing property, both assets and liabilities, between the parties. The goal of the process is to divide assets and liabilities fairly, while giving consideration to each party’s contributions to the marriage and financial position. “Property” includes all real and personal property, which can include a wide variety of assets: the marital residence, jewelry, artwork, furnishings, automobiles, investment accounts, business interests, and others. The court first classifies property as marital, separate, or “hybrid” (part separate, part marital). Property acquired during the marriage using marital funds will be classified as martial. Property acquired before the marriage, after marriage, or by inheritance or gift from a third party will be classified as separate. But what happens when one spouse makes a large down payment on the marital residence and it increases in value during the marriage? The courts have adopted three separate methods of dealing with this and other “hybrid” property scenarios. Property division can be done through one of three methods that apply in Virginia: Brandenburg, Keeling, or the “reasonable rate of return” method. The Brandenburg Formula originally arose from a divorce case in Kentucky, but has since been adopted by many states. The formula is as follows: (Separate Contribution)/(Total Contribution) * Total Equity = Separate Interest (Marital Contribution)/(Total Contribution) * Total Equity = Marital Interest The Brandenburg method is one of the most common methods of dividing hybrid property, and is used for assets ranging from the martial residence to division of financial accounts, including retirement and investment accounts. What Brandenburg leaves out of the equation are any additional payments or contributions made to the asset during the marriage. So, in a case where one spouse paid the down payment on a residence and continued to pay more toward maintenance, real estate taxes, and mortgage interest, the spouse would be able to draw out the additional value from the down payment, but not for the other expenses paid. The Keeling formula was developed in Virginia following a 2006 case. In that matter, the parties purchased a home for $394,000, which appreciated in value to $825,000. The husband made the down payment in the amount of $108,439, and paid the mortgage down only slightly during the marriage. Using the Brandenburg formula, the husband would have been entitled to 96% of the value of the home as separate property. The judge determined that application of the Brandenburg formula was inequitable to the wife, and held that since the husband’s down payment of $108,439 reflected 27% of the home’s original purchase price, that was the share he was entitled to as separate property. The third method of determining separate interests is the “reasonable rate of return.” This method is rarely applied in Virginia. This is the most flexible method to determine a parties’ separate interest. The parties apply a rate of return to the separate investment in an asset which is otherwise marital property. The rate to be used can be virtually any rate one can devise (and the parties agree on). In any family law case the court is not bound by a particular method, but the most frequently used method by far is Brandenburg. In negotiating, mediating, or arbitrating a settlement, parties can use any method they desire in order to reach a fair result and avoid litigation.

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