What if Your Custody Schedule is Not Working?

Shared custody schedules are based on your situation at the time the order is issued. As we all know, life can get hectic, schedules can change, and responsibilities can increase. If you have realized that your current custody schedule is simply not working for you and your child, you should discuss your options with the best child custody lawyer from Curran Moher Weis with years of experience serving Fairfax, nearby, and surrounding areas.

Is the Change Temporary?

If the change is temporary and you believe your circumstances will return to normal, you and the other parent might agree to make a temporary change. You want to put this in writing and speak with a lawyer about other requirements to protect yourself. If there is no evidence of your agreement, you can face accusations of failing to comply with the child custody order down the road.

If the change in circumstances is permanent, there are ways to modify your custody order. This requires court approval and the issuance of a modified order. This does not necessarily mean you will have to battle it out in court, however.

Seeking the Modification

Be open with the other parent about what is not working for you or your child. They might agree that change is needed for your child’s well-being. If you and the other parent agree to the long-term modification, your lawyer can draft your proposed modified arrangement. They can properly petition the court to incorporate the new schedule into your custody order. If the court finds the modification is warranted and in the best interests of the child, the judge can approve it and issue the modified order.

If you cannot agree and the other parent opposes the modification, you might have to go to court. First, we try to negotiate or mediate the matter to reach an out-of-court agreement when possible. However, if they still refuse to accept the changed schedule, we can petition the court for a modification. You will each present your case, and the judge will determine whether the circumstances warrant modification and whether it is in the best interests of the child.

Opposing a Modification

If your child’s other parent is the one who cannot adhere to the schedule and would like a change, discuss your options with a lawyer right away. A lawyer can help you find a middle ground when possible to agree to reasonable changes that work for everyone.

However, if the other parent is being unreasonable and requesting modifications that you strongly oppose, your lawyer can represent you in court to oppose the modification. You will need to show either that the changes are not substantial or permanent, or that the modification is otherwise not in your child’s best interests, and you want the right legal help.

Learn More From a Fairfax Child Custody Attorney Near You

At Curran Moher Weis, our best Fairfax child custody attorney represents parents in all types of custody matters in Northern, VA, and nearby. If you believe you need to change your custody order, never wait to contact us to learn how our custody lawyers can help.

What Justifies a Child Support Modification or Termination?

Child support is based on a wide range of factors that apply at the time it is calculated – according to the State of Virginia’s child support guidelines. The fact is, however, that the circumstances that guided your original child support order can evolve over time, and a modification – or adjustment – may be in order. If you have questions or concerns about how child support stands in your case, don’t wait to reach out to an experienced Fairfax child support attorney near you.

Income Shares Model

Virginia uses what is called an income shares model in the calculation of child support that takes both parents’ incomes into consideration. This method is intended to balance each parent’s financial ability to support the children while helping to ensure that the children are as well supported financially as they would have been if the parents had remained together. The court recognizes that circumstances change and, as a result, allows child support modifications when certain factors change significantly.

The Initiation of a Child Support Modification

Child support modifications are initiated in one of the following three ways:

1. Either parent (the parent who pays child support or the parent who receives child support) petitions the court for a modification
2. The court itself motions for a modification
3. A probation officer of the Department of Social Services petitions the court for a modification

The Primary Reasons for Child Support Modifications

The court does not modify child support orders lightly, but if one of the following factors applies, a child support modification may be taken into consideration:

1. It has been at least 36 months since your original child support order (or since your last review for modification).
2. Either parent’s income either increased or decreased by at least 25 percent
3. The primary custodial parent’s work-related childcare costs either increased or decreased by at least 25 percent.
4. Healthcare coverage costs for the children either increased or decreased by at least 25 percent – or the order needs to take healthcare coverage expenses into consideration.
5. The current child support order failed to take the reimbursed medical/dental provision into consideration.
6. A child needs to be added to the order (because of a change in physical custody or of birth) or is no longer eligible for support (because of a change in physical custody or emancipation).

With the passage of time, your financial situation and your children’s needs can change, and such change can instigate the need for a child support modification.

Turn to an Experienced Fairfax Child Support Attorney Near You

If you believe you need a child support modification – or your children’s other parent is seeking one – the dedicated child support attorneys at Curran Moher Weis in Fairfax, Virginia, and nearby are standing by to help. We have the experience, legal insight, and drive to help ensure that you and your children’s rights are well protected throughout the modification process. Your modification needs are important, so please don’t wait to reach out and contact or call us at 571-931-2941 for more information today.

What requirements should I know for a Virginia divorce?

Whether you are considering a divorce, are preparing to file for divorce, or are facing divorce papers, it’s important to know the basic requirements for a Virginia divorce. Because the divorce process is complicated and because your parental and financial rights hang in the balance, working closely with an experienced Fairfax family law attorney is the surest path forward.

Filing for Divorce in Virginia

Virginia divorces are filed in circuit courts, and in order to file, either you or your spouse must have been a resident of the state for at least six months. The separation requirement depends upon whether or not you and your divorcing spouse share children, and it breaks down as follows:

• If you and your divorcing spouse do not have minor children, you cannot file until after you’ve been separated for at least six months and have completed a written property settlement agreement.
• If you and your divorcing spouse do not have minor children, you cannot file until after you’ve been separated for at least one year.

Service

The spouse who files for divorce must have the other served with the divorce papers, and there are three basic methods for doing so, including:

• If your spouse lives in Virginia, he or she can be served through the Office of the Sheriff.
• If your spouse does not live in Virginia, you’ll need to make arrangements to have him or her served.
• If your spouse agrees to accept service of your divorce papers, you can mail the divorce documents to him or her directly – or he or she can accept service through the Circuit Court Civil Intake Division.

The Separation Requirement

The Separation requirement in Virginia is generally achieved when one spouse moves out of the marital home, but the state also recognizes couples who live separate and apart while remaining in the same home. The guidelines for accomplishing this level of separation, however, are specific.

There is also a requirement of intent, which means that at least one of you must have decided that your marriage is over and must have voiced this intention to the other. In order to establish that you have reached your separation time requirement, it’s advisable to establish one’s intention of divorcing – as of a specific date – in writing.

Fault-Based vs. No-Fault Divorce

Virginia offers both fault-based and no-fault divorces. The grounds for fault-based divorces in the state include:

• Adultery
• Confinement that lasts longer than one year
• Felony conviction
• Desertion
• Cruelty

Virginia is one of the only states in the nation that requires third-party corroboration for fault-based divorces (and only recently dropped the requirement for no-fault divorces). The matter of fault must be proven in fault-based divorces, but when granted, it can affect how the divorce terms are resolved.

No-fault divorces are a more straightforward process in which neither spouse blames the other for the dissolution of the marriage.

Contact an Experienced Fairfax Family Law Attorney Near You

The best divorce attorneys at Curran Moher Weis in Fairfax, Virginia, focus their practice on skillfully protecting the parental and financial rights of clients like you – throughout the divorce process. Your case is important, so please don’t wait to contact or call us at (571) 328-5020 for more information today.

What To Know When Modifying Spousal Support

Spousal support – or alimony – is less common in Virginia divorces than it once was, but it can play an important role for spouses who are left without the financial ability to support themselves upon divorce. The State of Virginia recognizes that life’s circumstances sometimes change and that modifications of divorce terms, including spousal support, are sometimes necessary.

If you’re in a situation in which you believe a spousal support modification is in order – or if your ex-spouse is seeking a modification – it’s time to consult with an experienced Fairfax divorce attorney.

Specifications

In the State of Virginia, there are specific guidelines for when a party can request a spousal support modification. If there is sufficient reason for doing so, either spouse can request that the amount of spousal support is increased or decreased, that the duration be extended or abbreviated, or that the support is ended altogether – unless the original order specifically states that it is not modifiable.

The Basis for Modifications

Virginia courts can terminate spousal support for any of the following primary reasons:

1. The recipient remarries – in which case, he or she is required by law to inform the payor
2. Either party dies (unless stipulated otherwise)
3. The recipient cohabitates with someone else in a relationship that is analogous to marriage for a year or more (unless stipulated otherwise or deemed unconscionable, which is rare)

Reasons the court may increase or decrease the amount of spousal support – or alter its duration – include:

1. Either party – or both parties – experienced a change in circumstances that was not anticipated at the time the support was determined.
2. An event that the court expected to happen, which would have changed one or both parties’ circumstances, failed to occur.

When the Matter of Modification Is Addressed in the Terms

When the original divorce terms themselves stipulate that spousal support modifications can’t be made, the court lacks the jurisdiction to modify the matter. If the divorce decree, however, does not address the matter of spousal support modifications (or stipulates when modifications can be addressed), the court has the authority to make modifications in accordance with whatever parameters are set forth (if any).

The Court’s Stance

When the court addresses the matter of spousal support modifications, it generally explores each party’s overall financial situation – in terms of their current incomes and their reasonable monthly expenses. Spousal support is intended to strike a balance between each spouse’s income in relation to his or her reasonable expenses, and if either ex’s financial circumstances – or both exes’ financial circumstances – have changed significantly, the court may determine that a spousal support modification is in order.

An Experienced Fairfax Divorce Lawyer Can Help

If you need a spousal support modification – or your ex is seeking one – the best divorce attorneys from Curran Moher Weis in Fairfax, Virginia, have an abundance of experience successfully guiding challenging cases like yours toward favorable resolutions that support our client’s best interests. We’re here for you, so please don’t hesitate to contact us online or call us at (571) 328-5020 for more information today.

Curran Moher Weis Proudly Sponsors the 2022 Fairfax Law Foundation Heroes vs. Villains 5k

For the 8th consecutive year, Curran Moher Weis will sponsor the annual Heroes vs. Villains Run for Justice 5K, and for 2022 we are serving as the main Superhero-level sponsor of the event. And we are looking forward to getting back on the course after a two-year hiatus due to the pandemic!

This race is one of the most important fundraising events for the Fairfax Law Foundation which supports pro bono legal service programs for Fairfax County residents who could not otherwise afford representation. The Foundation’s program also provides legal education programs and interactive activities for area students.

Curran Moher Weis has sponsored the event every year since our inception in 2012, as part of our effort to give back to the Northern Virginia community we serve. Our exceptional attorneys and staff will be out in full force at the event – running, volunteering, and cheering on race participants.

Stop by the Curran Moher Weis table for even more fun, including games and activities to keep children – and adults – occupied before and after the race! And follow us on Twitter (twitter.com/curranmoherweis) or Instagram (instagram.com/curranmoherweis) for the latest news and photos leading up to and on race day.

More Information:
Fairfax Law Foundation Heroes vs. Villains Run for Justice 5K
Sunday, April 24, 2022 (Kids’ Fun Run: 8:30 a.m. | 5K: 9 a.m.)
Fairfax Corner (4100 Monument Corner Drive | Fairfax, VA 22030)

How to Get a Divorce in Virginia

The 6 Steps To Prepare Yourself For a Divorce

1. Don’t wait to protect yourself! Know your rights early.

Clients often come to see me in the early stages of separation and divorce. Sometimes a client is just looking to know “what if” scenarios if one of them decides to divorce.  These clients almost always leave saying something like “wow, I never knew that – thank goodness I met with you,” or “I will definitely take the steps you recommended if we decide to separate.”  I have also had clients come to me months or even a year or more after they or their spouse made the decision to divorce.  Sometimes that delay has put them in a bad position as they have made decisions I would have cautioned them against had they met with me sooner.  If you are considering separation or divorce (or you think your spouse is), speak with an experienced attorney as soon as you can.  There are almost certainly things you can do to put yourself in a better situation when it comes time to divorce.  These may include dividing bank accounts, opening new bank accounts, collecting information and documentation on your spouse’s financial and personal situation, and a whole host of other things.

2. Be prepared when you meet with an attorney.

There are several things you can do to maximize your first meeting with an attorney:

• Create a list or spreadsheet of the assets and debts you know exist. Sometimes people don’t have all this information and that’s fine, but having a list of what you do know about is often very helpful.  Be sure to let your attorney know if you believe your spouse may be hiding assets, or has been keeping you in the dark about what they have;
• Prepare a list of questions you have. The attorney you meet with should be able to answer your questions at the initial consultation, or if a question cannot be answered at that time, explain why that is;
• Determine what your priorities are and communicate them. Also, give thought to what you would like your post-divorce life to look like.  Do you intend to relocate?  Do you see yourself as being the primarily caretaker of the children, or more of a shared parenting arrangement?  Do you want to stay in the marital residence or have it sold?  Do you expect to retire soon, or make an employment change, like starting a business?

3. Live separately.

In most circumstances you and your spouse must live separately for one year before either of you can apply to the court for a divorce.  Separation generally means one of two things: 1) that someone moves out of a shared residence and either or both parties have the intent to pursue a divorce; or 2) the parties live separately in the same residence and either or both parties have the intent to pursue a divorce.  Moving out is a clear demarcation for separation, but living separately in the same residence can be more challenging.  If you are considering living separately under the same roof, you can see our checklist of things you should be doing (if possible) to ensure that you truly are living separately here: https://www.curranmoher.com/blog/2017/02/02/in-house-separation-virginia/

4. Get important things out of the house.

If there are any valuables or sentimental items that you would be very upset to lose, it is generally a good idea to get them out of the house.  Store them at a trusted friend or relative’s house, or in a storage facility.  You may also want to download copies of family photos and videos onto a cloud service or external hard drive.

5. Know that the date of separation is the date of financial separation and act accordingly.

In Virginia, the date of separation is the date of financial separation.  Everything that is earned before the date of separation is presumed to marital property.  Every debt that is incurred before the date of separation is presumed to be a marital debt.  Conversely, after the date of separation all income earned is presumed to be the separate property of the party who earned it, and all debt is presumed to be the separate debt of the party who incurred it.  What does this mean in the real world?  It means that in most cases, it will be a good idea for you to open new credit cards and bank accounts after the date of separation to keep your separate property separate, and marital property marital.  Consult with an attorney on how best to use the accounts created.

6. Consider the process you want to use.

In Virginia besides litigating in court, there are several processes you can use to get from a separation to a completed divorce.  They are negotiation, mediation, and Collaborative Law, and information about them can be found here:  https://www.curranmoher.com/blog/2020/04/17/divorce-without-court-options-for-a-less-cumbersome-stressful-process/.  It would be a good idea to review these options and discuss with your attorney which process option you believe may best fit your situation.

When you’re considering separation and divorce, it can be a challenge just figuring out where to start!  Fortunately, at Curran Moher Weis, we have the experience and expertise to help you navigate these waters.

Love in a Time of Podcasts

By: Jason Weis, Esq.

Two incredibly popular podcasters recently weighed in on marriage and divorce with some thoughtful advice.  

First, Dennis Prager, provocative American talk show host and conservative commentator, recently published a “Fireside Chat” proposing the most important question couples should ask themselves prior to marriage is: “Do you actually enjoy each other’s company?”  He postulates that some unhappy marriages arise where couples love each other, but do not actually like each other.  “Ask yourself:  do you miss the person when you are not together?”  Whatever your political leanings or thoughts about Mr. Prager, there very well could be something to the old adage “marry your best friend.”  Love, while beautiful, can sometimes create feelings of obligation or even burden that, in turn, could create negative momentum over time.  Of course, not liking a person (or not loving a person) is not grounds for divorce in Virginia. 

In Virginia, the fault-based grounds of divorce remain: 

1. Adultery, sodomy, buggery; 
2. Felony conviction resulting in confinement for more than one year;
3. Cruelty; and 
4. Willful desertion.

Explorations of Virginia Fault-Based Grounds for Divorce and Virginia No-Fault-Based Grounds for Divorce can be found elsewhere on our site.

Second, Jordan B. Peterson , a controversial author, intellectual, and clinical psychologist, recently interviewed Warren Farrell, a best-selling author and notable advocate for both men’s and women’s rights.  In their near-three hour discussion, titled “The Four Dos and Don’ts of Divorce”, Jordan offers his view that marriage is mostly about children, not adults:  if adults exercise their free choice to have children, marriage effectively binds those adults together to raise their children.  Warren then posits four “must do’s” if parents want children of divorce to do as well as children of “intact families.” 

He believes divorcing parents should: 

(1) Strive to ensure the children have an equal amount of time with each of them; 

(2) Live within about 20 minutes’ drive time of one another; 

(3) Not expose the children to any bad-mouthing or negative body language directed toward the other parent; and 

(4) Effectively manage the administrative aspects of child-rearing, possibly with the assistance of a third-party.  

Each item above roughly aligns with Virginia’s Best Interest of the Child Statute in one way or another, but, like most issues in divorce, there are always important exceptions.  Child custody and child visitation are delicate and often highly contested matters.  Explorations of Virginia Child Custody and Virginia Child Visitation can be found elsewhere in our blog.  After adultery, perhaps no other family law issue evokes a “burn the boats – do whatever it takes at whatever the cost” response from clients than contested parenting time and contested parenting behaviors.  Divorce can be a positive or negative for your children and selecting the right family law attorney may help each parent maintain a healthy relationship with his/her children following divorce.  

Behavioral Economics and Its Impact on Divorce Negotiations

By Steven Goldman, Esq.

Stemming from my background in finance and business, combined with an interest in psychology, I have always been enamored by the field of Behavioral Economics – the study of psychology as it relates to economic decision-making. Over time, reading and studying Behavioral Economics became a hobby of mine and something I would apply in daily financial decisions.

I eventually began to think about how the field of Behavioral Economics, and understanding how people make decisions generally, could help me in my practice as a family law and divorce attorney. After reading several books written by pioneers in the field (Thinking Fast and Slow, Daniel Kahneman; Misbehaving, Richard Thaler; Predictably Irrational, Dan Ariely; etc.) and wanting to dive further into the subject matter, I enrolled in – and recently completed – a Behavioral Finance course through the University of Chicago.

In this blog, I will provide a few lessons about how Behavioral Economics can be utilized in matters of divorce and family law.

First, a primer on Behavioral Economics. An online search will tell you that the average adult makes more than 35,000 decisions per day, with 90% of those decisions made subconsciously. Daniel Kahneman describes two systems for decision-making: System 1, which is instinctual, automatic, and does not require effortful thought processes (e.g., driving, eating); and System 2, which is deliberate, controlled, and requires significant mental energy (e.g., mathematical calculations, deciding on an expensive purchase such as a house or car).

To conserve energy, our minds complete as many decisions with System 1 processing as possible.  Because System 1 acts without deep thought, it relies on heuristics, or biases, which act as shortcuts to influence our decision-making processes. Some examples of biases that I will show in relation to divorce negotiations are as follows:

• Status Quo
• Loss Aversion
• Anchoring
• Endowment Effect
• Confirmation
• Overconfidence

It is impossible to ignore or eliminate our biases, but we can recognize the way they operate and use that to think more clearly with System 2. We can also use what is called Choice Architecture – designing choices and options in ways that influence the decision-making process.

Example 1 – Custody Negotiations

Custody issues are always one of the most difficult to negotiate. One reason is that both parties are strongly impacted by their Status Quo biases. Prior to a separation, each parent is accustomed to living in the same home as the child and now there is a necessary adjustment to two households. Any schedule, regardless of the split, will feel like a loss of time. Loss Aversion is the principle that drives people to protect and preserve what they already have. In this scenario, the entire family used to live in the same home and both parents will feel a strong sense of loss as soon as the child’s time is divided. Parents often have a hard time negotiating a parenting time schedule because it all feels like a loss of time and, therefore, the negotiation will feel like a loss regardless of the outcome.

One way that I support clients through Loss Aversion is to redirect the conversation around the issue of time. Working with a Divorce Coach or Child Specialist, as we often do in the Collaborative Divorce process, provides the parties with an experienced mental health professional to focus on the benefits of co-parenting. An expert is there to guide the parents and explain that a child will benefit from positive co-parenting and that the co-parenting relationship will have a greater impact on a child than a particular schedule. The schedule will still be an important component to the negotiation, but it can be viewed as one piece of the puzzle to address the child’s needs.

Example 2 – Expectations and Financial Negotiations

One of the biggest obstacles in divorce negotiations is overcoming expectations. Expectations are developed as early as a client’s initial consultation that includes a sales pitch and a promise. Unfortunately, legal advice can and usually does shift when more objective information becomes available.

The problem is that the initial expectations become Anchors from which it may be difficult to deviate. Receiving anything less than initially expected will seem like a loss, even if it is an objectively reasonable and likely outcome.

Another issue arises when there are drastic disagreements over subjective financial matters, such as valuation of property. People typically overvalue their belongings, which is known as the Endowment Effect. As a result, it may be difficult to settle a buyout of a house, which carries history, memories, and sometimes serves as a home base for custody-related reasons. In financial negotiations, parties are expected to be rational and value a home based on an objective financial analysis. In reality, one person must receive less than what he or she believes it is worth due to the Endowment Effect. That person then typically uses the money to purchase a new property unaffected by those same biases. The result is the feeling that the person received less for the marital home and acquired something worth less.

One way to assist in financial negotiations is to implement the aforementioned Choice Architecture, which is another way of saying that we can frame choices to influence decisions. One way I have accomplished this in a negotiation is by providing multiple options that account for the biases parties bring into their decision-making.

Example of Choice Architecture:

Mr. and Mrs. Smith are negotiating the issues surrounding their house and the amount of spousal support to be paid by Mr. Smith.

The goal is for my client, Mrs. Smith, to get the marital home and receive as much support as possible. My client is aiming for Option 3 in this offer.

• Option 1: Mr. and Mrs. Smith sell the house and each receive $80K ($40K in closing costs, divided equally). Mr. Smith pays $2,000 per month for 36 months in spousal support
• Option 2: Mrs. Smith buys the house for $100K. Mr. Smith pays $2,000 per month in support for 30 months
• Option 3: Mrs. Smith buys the house for $100K. Mr. Smith pays $1,800 per month in support for 36 months

Option 1 is completely unacceptable under any objective analysis, but it is valuable because:

1. The presence of Option 1 shows that a buyout is better for Mr. Smith (an extra $20K), which will immediately narrow the focus between Options 2 and 3;
2. Even though Option 1 is the higher amount of support for the longer period, it serves as an anchor for both numbers.
   • Option 2 “saves” 6 months of support for Mr. Smith
   • Option 3 “saves” $200 per month for Mr. Smith

There are different benefits to each option, but my guess is that most people would choose $1,800 per month because all support payments are perceived as losses and it is easier to picture a smaller loss for a longer period (Present Bias).

We have therefore constructed options that are aimed at Mr. Smith selecting Option 3, which provides for $4,800 in additional support as compared to Option 2.

Compare the above choices to a typical offer – I want $1,800 per month for a period of 36 months. $1,800 will not feel like $200 savings and 36 months will still seem too long. If I go even higher with my only offer, as most clients wish to do in order to give “negotiating room,” you run the risk of the offer coming across as unreasonable and not advancing the negotiations.  Alternatively, you are negotiating all of the terms and slowing the negotiations to a crawl.

That is not to suggest that Choice Architecture will guarantee success, but that it is designed to account for our biases and instinctual decision-making processes.

Example 3 – Timing of Negotiations

Lastly, whether due to a lack of time, distractions, or even for perceived strategic advantage, settlement negotiations are often saved until just prior to a trial. Objectively and behaviorally, this is one of the worst times to settle a case for several reasons – mainly the following:

• Confirmation Bias: Through Confirmation Bias, we seek ideas and evidence that confirm our beliefs while reacting negatively to anything that contradicts our beliefs. As a client and attorney prepare for trial, they analyze the information in a light most favorable to their argument. It is likely that they ignore or even overlook the counterarguments. The positions become even more ingrained and the case becomes harder to settle.

• Overconfidence: Related to and often resulting from Confirmation Bias is Overconfidence. If we continue to support and confirm our beliefs while simultaneously devaluing contradictory information, we become overconfident in our chances of success. A client is less likely to negotiate a fair outcome if he or she is overconfident about his or her chances in Court.

• Sunk Cost Effect: The Sunk Cost Effect occurs when a person continues his or her behavior because of previously invested resources. Once we are invested in something, we have a hard time giving up on that investment. I have had clients openly admit that they would probably have accepted an offer if it came earlier in the case, but now that so much was spent on attorney fees, they feel it is “worth it to roll the dice” at trial.

  Objectively, the amount spent on attorney fees should have no bearing on whether to accept the deal. Additional attorney fees have no effect on the outcome of the case. Even more puzzling is that proceeding to trial will cost even more money to take the same risks.

If attorneys are aware of these biases, they should be making a concerted effort to gather the necessary data and proceed to negotiations much earlier in the litigation process. Doing so would lessen the impact of these biases on the negotiations and increase the chances of success.

Behavioral Economics clearly plays an important role in the way we think about money and make financial decisions, but its principles also guide the way we make decisions in many other areas of life.

In matters of family law, it is important to have an attorney who accounts for our natural tendencies and considers those in his or her counsel. If you have questions about a Virginia divorce or other family law issue, or wish to discuss a fresh approach to your case, Curran Moher Weis has experienced family law attorneys who can assist you through the process.

Please check out our reviews. You can request a consultation on our website or by calling us at (571) 328-5020.

I Made (or Lost) Money on GameStop Stock ($GME): What Happens in a Virginia Divorce?

By Steven Goldman, Esq.

Over the past week, GameStop (NYSE: GME) and other “meme stocks” (e.g., AMC and Nokia) have dominated headlines as hordes of retail traders attempted to squeeze hedge funds and other high profile short sellers, creating a highly volatile market. Within a matter of weeks, shares of $GME rose from approximately $20 to nearly $500 per share before almost immediately crashing back down to less than $100 per share. Fueled by easier and cheaper methods of investing with apps like Robinhood and TD Ameritrade, along with free trades becoming ubiquitous, nearly everyone has a friend or family member that got in on the action. Naturally, some people earned a lot of money in a short period of time while others lost just as much.

As a family law attorney, I expect to receive a lot of questions from clients as to who gets the “winnings” or, unfortunately, what to do about the losses in asset division and other matters of divorce. The following is a primer as to how investment gains and losses are generally treated under Virginia law:

Overview

In a Virginia divorce, investment accounts (including all stocks and other forms of investments held within the account) are assets subject to division if they are deemed to be marital property under Virginia Code §20-107.3. Irrespective of which spouse is the account holder, an account is considered marital property if it was acquired or contributed to during the marriage (with limited exceptions). As with all other marital assets, they are subject to “equitable distribution,” which is to say that they will be divided “fairly and equitably” after considering the factors listed in Virginia Code §20-107.3(E). Booth v. Booth, 7 Va. App. 22, 27-28 (1988).

If an investment account is held in the name of only one of the parties, the statute provides for a “monetary award” that may be payable to the other party in lieu of dividing the account.

How Should the Investments Be Divided?

Generally, passive appreciation from investments is divided in the same percentages as the rest of the account. For example, if an investment account is to be divided equally, then any investment gains would be divided equally as well. This is true even if those investment gains occurred after the parties’ separation because passive appreciation did not necessarily require any additional contributions by either party to earn that additional money.

However, Virginia Code §20-107.3(E)(2) demands consideration of, “the contributions, monetary and nonmonetary, of each party in the acquisition and care and maintenance of such marital property of the parties.” Although every situation is unique, the amount of money earned through active investing post-separation should be considered.

For example, let us imagine that Spouse A had $1 Million in an investment account as of the date of the parties’ last separation and the entire account was marital at that point in time. In January 2021, Spouse A actively traded on the account and earned another $1M from the purchase and sale of $GME. Although Spouse A utilized marital funds to invest in the market, it is at least worth considering the “contributions…in the acquisition and care and maintenance” of such marital property in awarding a greater percentage of the gains to Spouse A. This could potentially result in Spouse A receiving more than 50 percent of the assets from the account.

What About Investment Losses?

Once again, generally, passive losses from investments will not affect the division of an asset. However, let us now imagine that Spouse A had the same $1M in an investment account as of the date of the parties’ last separation, but that Spouse A then loses $500K from the purchase and sale of $GME.

Under the same statute, it could be argued that Spouse A made a “negative” monetary contribution to the acquisition and care and maintenance of marital assets. Spouse A was in control of the assets and took tremendous risk with Spouse B’s share of the funds. As a result, an equitable division of assets may result in Spouse B receiving a greater percentage of the remaining assets.

Further, it could be argued that marital assets were “wasted” or “dissipated” as a result of the risky investments. In considering such an argument, “once the aggrieved spouse shows that marital funds were either withdrawn or used after the breakdown, the burden rests with the party charged with dissipation to prove that the money was spent for a proper purpose.” Clements v. Clements, 10 Va. App. 580 (1990). Gambling and speculative stock trades, in anticipation of divorce or after the date of the parties’ separation, are oft-cited examples of marital waste.

Who Pays the Taxes?

At the end of each year, financial institutions issue a Form 1099, which states the gains or losses incurred throughout the course of a year. All investment income is then claimed on the individual’s tax return for that year. The financial institution will not know whether the account holder is married or getting divorced and so if the parties are to file taxes separately, then only the account holder will be liable for any taxes owed.

“Meme stock” activity saw a lot of people buying and selling their investments in the same month. Any stocks held for less than one year result in “short-term” capital gains and losses, which are taxed at the same rate as ordinary income. For high-earners, the tax consequences for short-term capital gains will be substantial.

Once again, Virginia Code §20-107.3(E) provides that “tax consequences to each party” is a factor to be considered in the division of marital assets. This is to say that if Spouse A is required to pay a monetary award for Spouse B’s share of the investments, capital gains taxes should be calculated into the award because Spouse A will be left with the entire tax liability.

Conversely, capital losses will have been accrued in the scenario where Spouse A lost $500K from the purchase and sale of stock. Capital losses may be quite valuable because they are used to offset gains from the sale of other assets or, if there is a net loss that year, deductible against ordinary income up to $3,000 per year. See I.R.C. §1211

For example, let’s consider that Spouse A lost $500K from the purchase and sale of $GME but the parties also have $100K in capital gains from the sale of investments in a joint brokerage account. During that year, the capital losses can be used to offset the $100K in capital gains so that no taxes are paid on the investment income from the joint account. Spouse A will also have $400K in “capital loss carryover,” which can be used to offset gains in future tax years.

Capital loss carryover, especially in a situation described above, is a significant asset that must be considered when dividing assets in a divorce. See Attiliis v. Attiliis, 2009 Va. App. LEXIS 261 (2009). If the capital loss carryover is not considered, Spouse A will have $400K in losses to offset future gains, which has the potential to be worth well over $100K in future tax savings if Spouse A is a high-income earner.

Conclusion

If you or a spouse have engaged in volatile stock trades, it is important to consider the consequences this may have in the division of the assets used for trading – whether that be tax implications for capital gains or how to consider the value of capital losses.

If you have questions pertaining to your Virginia family law issues, it is recommended that you obtain legal and financial advice from professionals prior to and throughout the divorce process. Curran Moher Weis has experienced family law attorneys who are skilled in financial matters and can work with your financial advisors to plan for your best course of action.

You can request a consultation here on our website or by calling us at (571) 328-5020.

All investments involve risk of loss. Nothing contained in this website should be construed as investment advice. Any reference to an investment’s past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit.

The information contained within this article is provided for informational purposes only and should not be used as a substitute for obtaining accounting, tax, or other guidance from a licensed tax professional.

Curran Moher Weis Promotes Nicole Grejda, Esq., to Partner

We are pleased to announce that Nicole Grejda, Esq., has been promoted to partner at Curran Moher Weis. Ms. Grejda has been with us since 2017 and has since successfully represented our clients in multiple complex, high net-worth divorce cases, earned a certification in collaborative law, and, as of this past summer, is a trained professional mediator.

Our Managing Partner Grant Moher, Esq. said it best, “Ms. Grejda is a highly effective attorney. She is sharp and focused, both in court and at the negotiating table. She also cares deeply for her clients, and it shows in her work. We are proud to add her as a partner to our firm.”

Read the official press release here, and learn more about Ms. Grejda’s background and how to book a consultation with her here.