Virginia Family Law Appeals

PROPERTY DIVISION — SOURCE OF FUNDS AND GIFT — BUSINESS VALUATION AND INCOME — INCREASE IN PROPERTY VALUE.

Apparently the Court of Appeals is deeply offended by the Source of Funds Statute and its 1991 amendment concerning gifts, and has sworn eternal hostility to the idea of trial courts' applying it. It has set up multiple new requirements to assure that no case which might arise under the laws of Virginia will be a legitimate one for application of the statute recognizing partially separate and partially marital property. In Rowe v. Rowe, ___ Va. App. ___, ___ S.E.2d ___, 11 VLW 855 (2/4/97), it holds that a trial court erred by recognizing even a part of the husband's contribution from separate property to the marital real estate as separate.

GOOD WILL VALUATION: VIRGINIA'S UNIQUE POSITION

On December 11 of 1990 the Virginia Court of Appeals decided a very important case, Russell v. Russell, 399 S.E. 2d 166. Successful counsel in that appeal, Ron Evans of Richmond, is a member of the Family Law Section Board of Governors, and can explain the case from the viewpoint of a successful litigant elsewhere in this issue. Others would argue that Russell is a strangely-reasoned case that places Virginia in a minority of one on this important nationwide issue. Although the opinion says a few things to the contrary, it appears to take the position that good will of a professional practice can be equated with the entire earning capacity and reputation of a sole practicioner, rather than excess earnings; and that such earning capacity can be the basis of both a property-division and an alimony award. A reading of the Russell opinion, and Ron Evans's article, is strongly recommended to anyone practicing in the area of equitable distribution.