Dividing Your Assets and Debt
Marriage is as much an economic relationship as anything else, love and children aside. When you divorce you need to unwind that economic relationship. In Florida the process of unwinding your financial affairs is called equitable distribution. Just like unwinding of a business partnership, dissolving of a marriage starts with full financial disclosures. Once the cards are laid out on the table the process of divvying up the assets and debt (liabilities) can begin.
Equitable distribution of marital assets and debt (liabilities) has its legal roots in the dissolution of marriage statutory law found at Section 61.075, Florida Statutes. The gist of the equitable distribution law is that in order to do equity – fairness – between the parties (husband and wife), the court should first set apart to each party that spouse’s nonmarital assets and debt (liabilities). Then the court should distribute the marital assets and debt (liabilities) equally – 50/50 – unless there is a justification for an unequal distribution. Always a catch.
The starting point is to identify all assets and debt (liabilities) that exist on the date the dissolution of marriage case is filed, which is called the cutoff date. The cutoff date can be another date the parties agree to, such as in a prenuptial agreement. However, typically the cutoff date is the date of filing the petition for dissolution of marriage with the clerk of court, wherever the case is filed.
One good way to identify all of the assets and debt is by creating a personal financial statement or completing a personal financial affidavit. These tools will identify income, living expenses, assets and debt. Not all assets are marital and subject to equitable distribution so it is important to properly identify and characterize each one. Nonmarital assets get assigned to the party who owns them. Same with nonmarital debt. Marital assets and marital debt – the things left on the table, are then valued and divided equally, i.e. equitably distributed or divided.
The court should always consider and decide the issue of equitable distribution in a Florida dissolution of marriage case before deciding whether alimony is appropriate and, if so, how much is to be paid and for how long.
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1. Assets acquired and liabilities incurred by either party prior to the marriage, and assets acquired and liabilities incurred in exchange for such assets and liabilities;
2. Assets acquired separately by either party by noninterspousal gift, bequest, devise, or descent, and assets acquired in exchange for such assets;
3. All income derived from nonmarital assets during the marriage unless the income was treated, used, or relied upon by the parties as a marital asset;
4. Assets and liabilities excluded from marital assets and liabilities by valid written agreement of the parties, and assets acquired and liabilities incurred in exchange for such assets and liabilities; and
5. Any liability incurred by forgery or unauthorized signature of one spouse signing the name of the other spouse. Any such liability shall be a nonmarital liability only of the party having committed the forgery or having affixed the unauthorized signature. In determining an award of attorney’s fees and costs pursuant to s. 61.16, the court may consider forgery or an unauthorized signature by a party and may make a separate award for attorney’s fees and costs occasioned by the forgery or unauthorized signature. This subparagraph does not apply to any forged or unauthorized signature that was subsequently ratified by the other spouse.
Marital Assets and Liabilities
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a. Assets acquired and liabilities incurred during the marriage, individually by either spouse or jointly by them.
b. The enhancement in value and appreciation of nonmarital assets resulting either from the efforts of either party during the marriage or from the contribution to or expenditure thereon of marital funds or other forms of marital assets, or both.
c. Interspousal gifts during the marriage.
d. All vested and nonvested benefits, rights, and funds accrued during the marriage in retirement, pension, profit-sharing, annuity, deferred compensation, and insurance plans and programs.
2. All real property held by the parties as tenants by the entireties, whether acquired prior to or during the marriage, shall be presumed to be a marital asset. If, in any case, a party makes a claim to the contrary, the burden of proof shall be on the party asserting the claim that the subject property, or some portion thereof, is nonmarital.
3. All personal property titled jointly by the parties as tenants by the entireties, whether acquired prior to or during the marriage, shall be presumed to be a marital asset. In the event a party makes a claim to the contrary, the burden of proof shall be on the party asserting the claim that the subject property, or some portion thereof, is nonmarital.
4. The burden of proof to overcome the gift presumption shall be by clear and convincing evidence.
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(a) The contribution to the marriage by each spouse, including contributions to the care and education of the children and services as homemaker.
(b) The economic circumstances of the parties.
(c) The duration of the marriage.
(d) Any interruption of personal careers or educational opportunities of either party.
(e) The contribution of one spouse to the personal career or educational opportunity of the other spouse.
(f) The desirability of retaining any asset, including an interest in a business, corporation, or professional practice, intact and free from any claim or interference by the other party.
(g) The contribution of each spouse to the acquisition, enhancement, and production of income or the improvement of, or the incurring of liabilities to, both the marital assets and the nonmarital assets of the parties.
(h) The desirability of retaining the marital home as a residence for any dependent child of the marriage, or any other party, when it would be equitable to do so, it is in the best interest of the child or that party, and it is financially feasible for the parties to maintain the residence until the child is emancipated or until exclusive possession is otherwise terminated by a court of competent jurisdiction. In making this determination, the court shall first determine if it would be in the best interest of the dependent child to remain in the marital home; and, if not, whether other equities would be served by giving any other party exclusive use and possession of the marital home.
(i) The intentional dissipation, waste, depletion, or destruction of marital assets after the filing of the petition or within 2 years prior to the filing of the petition. (j) Any other factors necessary to do equity and justice between the parties.