Q: Owned a house before marriage, refinanced while married together (wife and I). Does it count as asset during divorce?

A: Possibly. The Virginia State Bar provides to the public the following information:

Marital property is defined as all jointly-owned property and all other property, other than separate property, acquired from the date of the marriage to the date of separation. Typical examples of marital property are the marital home titled in the names of both spouses or a retirement account accumulated during the marriage even if the account is only in the name of one spouse.

Separate property includes all property acquired by either spouse before the marriage andr all property acquired during the marriage by inheritance or by a gift from a source other than one’s spouse. Typical examples of separate property are an automobile that was given to one of the spouses by a parent and titled in the name of the receiving spouse, an inheritance from a family member, and cash gifts from third parties but only if such gifts and inheritances are then maintained separately from other marital property. Gifts from one spouse to the other spouse such as jewelry are marital property.

The third category of property is property that is part marital and part separate. The application of the law to this category of property is often very complex. Some examples of property that is part marital and part separate include:

a. Income received from separate property during the marriage provided such income is attributable to the personal efforts of either spouse. For example, if one spouse inherits a business prior to or during the marriage and either or both spouses work in the business producing income, such income may be marital property notwithstanding that the business is separate property.

b. The increase in value of separate property during the marriage may be marital property to the extent that marital property or the personal efforts of either party contributed to such increases. Any such personal efforts must be substantial, and result in significant appreciation. For example, if one spouse owned a business before the marriage, and during the marriage either party, through his or her personal efforts, caused the value of the business to increase substantially, the increase in value may be marital property.

Personal effort of either spouse is defined as labor, effort, inventiveness, physical or intellectual skill, creativity, or managerial, promotional, or marketing activity applied directly to the separate property of either spouse.

Where marital property and separate property are mixed together by either separate property receiving marital property or marital property receiving separate property, specific rules of classification apply. For example, one spouse receives an inheritance and deposits that inheritance to the family savings account. The marital property is receiving the separate property, so the inheritance becomes marital property. However, if the spouse who received the inheritance retraces the inheritance with bank records, etc., and it was not a gift, it may maintain its separate nature. Another example of mixed property would be a home purchased by the parties where one spouse used their separate assets to contribute to the purchase but the mortgage on the property is in both names and is paid off during the marriage with marital funds. In such a circumstance, the law provides the means to analyze what portion of the asset is marital and what portion is separate. Only the marital portion would be subject to equitable distribution.

From the VSB

https://www.vsb.org/site/publications/financial-issues-in-divorce and

https://www.vsb.org/site/publications/divorce-in-virginia/

NOTICE: THE INFORMATION CONTAINED HEREIN SHALL NOT BE DEEMED TO CONSTITUTE LEGAL ADVICE --- YOU MAY NOT RELY UPON THIS INFORMATION AS LEGAL ADVICE. AS A MEDIATOR, TOM ROBERTS AND AXIOM MEDIATION DOES NOT REPRESENT EITHER PARTY AS AN ATTORNEY.