In Wright v. Wright, Nos. 0947-12-2, 0958-12-2, 2013 Va. App. LEXIS 53 (Feb. 19, 2013) (combined opinion), the Court addressed numerous issues on appeal stemming from the parties’ final decree of divorce. The husband argued that the trial court erred in awarding the wife a reservation of rights to spousal support and a portion of his supplemental retirement plan (SRP) and in deriving the marital share of his law practice. The wife appealed the trial court’s use of the trial date instead of the separation date to value certain accounts for equitable distribution, approval of the husband’s use of marital funds post-separation, and four-year spousal support award after a twenty-two year marriage.
The Court of Appeals upheld the trial court’s classification of husband’s SRP as marital property when and if it vests, but reversed and remanded its award to wife of twenty-five percent of the SRP’s value as a whole. Under Virginia Code section 20-107.3(G)(1), the court may award a portion of the marital share of such a benefit plan, not a portion of the entire share.
On the issue of spousal support, the Court of Appeals upheld the trial court’s award of four years of spousal support with reservation of spousal support rights to the wife. Although she was out of the workforce for most of the marriage, wife has an M.B.A. and worked during the beginning of the marriage. The trial court accepted the husband’s vocational expert’s testimony regarding her potential employment options. The Court of Appeals reversed and remanded the issue of the duration of the reservation because the trial court failed to specify how long it would last.
The Court of Appeals also affirmed the trial court’s acceptance of the wife’s expert’s valuation of the marital value of the husband’s interest in his law firm. The parties’ experts were more than $900,000 apart in their respective valuations. The trial court accepted wife’s expert’s “bottom-up” approach; the Court of Appeals noted that this strategy was approved previously in Howell v. Howell, 31 Va. App. 332 (2000). The same expert, Robert Raymond, C.P.A., was responsible for the successful bottom-up valuation of a financial interest in a law practice in Wright and Howell.
Lastly, the Court of Appeals declined to adopt wife’s position that the trial court should not have approved of husband’s depletion of marital accounts during the parties separation, even if it was to pay taxes filed jointly by the parties, tuition for their daughter’s school, the mortgage on the marital home, attorney’s fees, and spousal support. Due to the husband’s use of marital funds to pay for such expenses, two accounts were worth substantially less on the date of trial than on the date of separation. At trial, the wife argued that the court should use the date of separation to value these accounts, but it did not agree. The Court of Appeals upheld the trial court’s decision regarding the valuation date and the husband’s use of marital funds to pay for various expenses during the parties’ separation. The Court agreed with the trial court that the husband did not commit waste.
This case is bound to have significant implications for future family law cases. It will be interesting to see how attorneys use the Wright ruling to argue issues related to spousal, valuation, and marital waste.