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10/29/2009
M. Scott Bucci
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Burden On Spouse To Prove That Assets And Debts Are Not Joint Property

Under Virginia law, half of a couple's assets are presumed joint property of the marriage, and each party is entitled to one-half of the value unless challenged. In Layne v. Layne, the Virginia Court of Appeals ruled that a rental property which husband owned prior to the marriage was marital property, and wife was entitled to one-half of its value. Applying Virginia law, the court held that over the course of the marriage, wife made significant contributions to the upkeep, daily maintenance, tenant-seeking efforts, and leasing duties. Because the wife's efforts had contributed to the increase in value of the rental property, and because the proceeds from the renting were deposited into a joint bank account, the court held that the asset was to be divided 50/50.

In addition to presuming that assets of either husband or wife are jointly owned, Virginia law likewise presumes that the debts of either husband or wife are jointly owned. In Layne v. Layne, wife accrued $44,000 in debt from student loans over the course of the marriage. Husband argued that because he was not going to benefit from the increased earning capacity that wife's education would produce, he should not have to pay for one-half of the loans. The court disagreed with that argument. Instead, it noted that the loans were not used to pay for tuition or for books, but instead went entirely to family expenses.

While the outcome of this case may seem unfair, it is probably an even-handed and logical application of sound family law policy. The principle of this case is easy: assets and debts of one party are the assets and debts of the marriage. Absent proof that an asset or debt was kept entirely separate from one's spouse, it will be divvied up on divorce, and each party will shoulder an even burden or reward.

Labels: equitable distribution marital property separate property