In a Florida divorce, the court will divide “marital” assets and liabilities. The law refers to this as “equitable distribution.” In distributing the assets, the court is expected to treat both spouses fairly and equitably, although not always equally or the same. Each party should receive a similar value of marital the marital assets.
The first step in equitable distribution is to determine what assets and liabilities are marital, and what is not marital. Florida courts have a great deal of discretion to do what they believe is fair and just in divorce cases.
Florida Statute § 61.075 describes what constitutes marital property. It includes:
- Assets. If a particular property or asset was acquired (in most cases) during the marriage, it is generally considered marital property and subject to distribution. Notably, it does not matter how if the asset was purchased in one party’s name or the other.
- Enhancement in Value or Appreciation of Non-Marital assets. If a non-marital asset (discussed below) increases in value because marital effort (action taken by either party during the marriage), the increase in value can be deemed marital by the court. At court, it is crucial to have valuation evidence to verify the increase in value so the judge will know what value is subject to equitable distribution.
- Interspousal Gifts. When one spouse gives another spouse a gift, that gift is generally treated as marital property.
Non-marital property is not subject to division by the court. Whichever party owns the non-marital asset will keep that asset. Non-marital property includes:
- Pre-Marital Assets. Assets acquired by either of the spouses before they were married are not subject to distribution.
- Assets Acquired by Inheritance or Gift (Noninterspousal). If you inherit assets from 3rd parties, or your family, the assets are not subject to distribution by the court.
- Income from Non-Marital Assets. So long as the spouse who owns the asset keeps the proceeds separate from marital property or joint accounts, the income will be considered non-marital property and it will not be subject to distribution.
- Assets Identified in a Prenuptial or Postnuptial Agreement. Spouses can exclude assets and property from equitable distribution by agreement, as long as there is full disclosure and the agreement is validly executed.
Commingling of Property
When non-marital assets and funds are combined with marital assets, the non-marital character is lost and the asset is subject to distribution. This frequently occurs when one of the spouses puts nonmarital funds in a joint bank account, or uses nonmarital funds to purchase a marital home. The court has discretion to identify a share of a marital asset as nonmarital, but it does not have to, and can treat the entire asset as marital.
Marital liabilities are also subject to distribution, pursuant to the same rules discussed above. As with assets, liabilities are classified as either non-marital or marital, depending on who incurred the debt and when it was incurred. If a debt is non-marital, then the spouse who incurred the debt will be individually responsible for the debt. If the liability is found to be marital, the court may assign it to either party in the divorce or order the parties to continue their joint responsibility for the debt.
Getting the Most from your Equitable Distribution
Florida law states that equitable distribution is final. In other words, it cannot be modified after it is ruled upon by the court. As a result, it is crucial to hire experienced counsel to get it right the first time. Once you obtain counsel, you should take sever steps:
- Disclose Everything. Hiding assets is never a good idea. If caught, you will lose credibility and, potentially, be sanctioned by the court.
- Discuss how the property was acquired and used during the marriage. This information can be used by your attorney to obtain a certain distribution that could benefit you after the divorce.
- Discuss your goals in the equitable distribution. You probably have a priority of assets and liabilities. Make sure your attorney knows what you want, and don’t want, in your equitable distribution so your attorney can shape his or her arguments to suit your goals.
CONTACT US TODAY TO DISCUSS YOUR RIGHTS TO ASSETS IN A FLORIDA DIVORCE
If you have questions about your rights, we would be happy to provide the answers. Give us a call at (850) 613-6923 to schedule a consultation or contact us today to discuss your rights.