A Division of Property and Assets case was recently decided by the Florida court of Appeal. In a case captioned Ramos v. Ramos, the Court ruled that, under Florida law, the appreciation in the value of a nonmarital asset that results from the expenditure of marital funds or from marital labor is a marital asset. For example, if a $500,000 home is owned by one of the parties prior to the marriage and the value of that home is increased to $1,000,000 as a result of marital efforts, the increase in the value of the home is considered to be a marital asset subject to division by the Court.
In the Ramos case, the parties married in 2000, and the Husband filed for divorce in 2014. The Husband maintained that his vending machine business was a nonmarital asset because the business was started ten years prior to the date of the marriage. The Husband contended that because the business was a nonmarital asset, it was not subject to equitable distribution by the Court. The Wife contended that the business was a marital asset. The evidence at trial showed that the Husband's business lost value during the course of the marriage. The trial court agreed with the Wife and found that the business was a marital asset. The Husband appealed the trial court's ruling. The Florida Court of Appeal agreed with the Husband and reversed the trial court.
Regarding the Division of Property and Assets, the Florida Court of Appeal ruled that the business was a nonmarital asset. Since it was a nonmarital asset, only the enhanced value of the business during the marriage was subject to equitable distribution by the Court. The enhanced value of a premarital asset that results from efforts by either party during the course of the marriage is marital property. Since the Husband proved that the business was formed ten years prior to the date of the marriage, the burden of proof shifted to the Wife to prove that the business became partially marital through the efforts of the Husband during the course of the marriage. Since the value of the business actually went down during the course of the marriage, the Wife was unable to meet this burden of proof. Accordingly, the business was found to be a nonmarital asset that was not subject to equitable distribution.
To speak with a Division of Property and Assets attorney in West Palm Beach, Florida, contact Matthew Lane & Associates, P.A. at (561) 651-7273.