A division of property and assets case involving a husband's pension was recently decided by the Florida Court of Appeal. In this case, the husband and wife were married for thirteen years. When the divorce was filed, the husband had been working for the City of Delray Beach as a firefighter for 16 years. The Husband's pension accrued at a rate of 2.5% per year. Once the husband had served for 25 years, his retirement benefits increased to 3% per year. When the divorce was filed, the husband was eligible for the 2.5% multiplier. The Florida Court of Appeal pointed out that there are two methods to distribute pensions. The first method is the immediate offset method. Under this method, spouses receive the present value of their interest in the other spouse's pension either in cash or as a share of marital distribution. The second method is the deferred distribution method. Under this method, the judge determines the amount of the employee's benefit as of the date of the final hearing (without any early retirement penalty).
The division of property and assets in a divorce proceeding cannot include property that was previously conveyed to the parties' children. In a recently decided case captioned Perez v. Perez, the parties were married for twenty-three years. The husband and wife owned several pieces of real estate. During the course of the marriage, they conveyed four pieces of real estate to their sons. As part of the final judgment in the divorce proceeding, the trial court awarded some of the real estate that was conveyed to the children to the husband and some of this real estate to the wife.
A division of property and assets case involving the valuation of a start-up company was recently decided by the Florida Court of Appeal. In a case captioned Soria v. Soria, the husband and wife were married in 1988. The parties were married in April 1988. The husband was the founder of a start-up limited liability company. At the time of trial, the company was carrying approximately $400,000 of debt. The company's liabilities varied from $9000 to $76,000 and the company's assets varied from $147,000 to $190,000. The husband testified that he was essential to the operation of the business and that the business could not operate without him. The husband owned approximately 64% of the business and investors owned the remaining 36% of the business. After the divorce was filed, the husband transferred 30,000 of his shares in the company to his girlfriend in order to compensate her for her work for the company.
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.
The Division of Property and Assets statute in Florida classifies property as marital assets and nonmarital assets. A divorce court divides marital assets between the parties. However, nonmarital assets are retained by their owner. When a nonmarital asset is enhanced in value by marital labor or by marital money, the enhancement in value itself becomes a marital asset. In a recently decided case captioned Higgins v. Musso, the wife received a home as part of her divorce from her first husband. She borrowed money from her parents to buy out her first husband's interest in the property. The wife's mother filed a lien on the property which proved that the wife borrowed money to purchase and renovate the home. The wife also utilized marital funds to fix the property after it was damaged by two hurricanes. The wife painted the ceiling, installed new carpet, and put in a new roof. Insurance proceeds paid for some of the repairs. The parties took out a line of credit to build the marital home and took out a loan to repay the line of credit. The home sold for over a million dollars. The sale proceeds were deposited into a bank account. The trial court ruled that the entire proceeds from the sale of the home were marital assets.
In a recent division of property and assets case, captioned Gotro v. Gotro the Florida Court of Appeal held that a trial court should not include expended assets in an equitable distribution scheme unless these assets were dissipated as a result of one of the parties' misconduct. In this case, the parties had a 39 year marriage and had 4 adult children. The husband was the primary breadwinner. The husband had a number of bank accounts which were marital assets. The significant bank accounts, for purposes of this appeal, were two accounts at BBVA Compass Bank. By the time that the final hearing took place, the balances in these two bank accounts was significantly lower than they had been at the time of the filing of the divorce. The husband testified that he had used the money in these accounts for his living expenses. The husband requested that the trial court distribute these accounts based upon their value at the time of the final hearing and not as of the date of the filing of the dissolution of marriage. In fashioning its final judgment, the trial court used the values in the accounts as of the date of the filing of the divorce.
The division of property and assets in a Florida divorce begins with the division of the parties' assets into two categories, marital assets and liabilities and nonmarital assets and liabilities. Marital assets are those assets accumulated during the marriage by the parties from their work, earnings and services. In determining whether property is a marital asset, the question is not which party holds title to the asset. The trial court divides the marital assets and liabilities between the parties. In a recently decided case captioned Hooker v. Hooker, the Florida Supreme Court stated that although the trial judge possesses discretion to reach an equitable distribution of the parties' marital assets, there is a presumption that an even division is equitable, unless one of the parties shows otherwise.
The division of property and assets in a Marital Settlement Agreement can be contested in two ways. The first basis to challenge a Marital Settlement Agreement is for fraud, coercion or misrepresentation. The second basis to challenge a Martial Settlement Agreement is for unfairness. In a recent case captioned Hall v. Hall the Florida Court of Appeal stated that a Marital Settlement Agreement could be set aside for fraud, duress, misrepresentation, or coercion. The second basis for setting aside a Martial Settlement Agreement contains three elements. First, the spouse that wants to set aside the agreement must prove that the Martial Settlement Agreement is unfair to the recipient spouse in light of the parties' financial circumstances. The trial court will then look at the financial situation of the parties, their ages, their education and their health. The trial court may then decide that the agreement is unfair to the recipient spouse in light of the payor spouse's financial circumstances.
In making a division of property and assets in a divorce proceeding, who gets to keep the property that they inherited?
In a division of property and assets case, gifts from your parents may end up belonging to your spouse if the proceeds are comingled with marital assets. In Dravis v. Dravis the Florida Court of Appeal recently stated that: Although non interspousal gifts and inheritances, like those from a parent, are usually treated as nonmarital assets, see § 61.075(6)(b)(2), this can change. Nonmarital assets may lose their nonmarital character and become marital assets where they are commingled with marital assets. This is especially true with respect to money because money is fungible, and once commingled it loses its separate character. Money loses its nonmarital character when it is commingled with marital money. Where gift proceeds are commingled with proceeds that are marital assets, the gifts may lose their nonmarital character and, as a matter of law, become marital assets subject to equitable distribution.