Division of the marital assets and liabilities in the State of Florida is called Equitable Distribution. According to Florida Statutes 61.075, the Court begins with the premise that the distribution should be equal unless there is a justification for an unequal distribution. Only “marital assets and liabilities” are subject to equitable distribution.
1. What assets and liabilities are “marital assets and liabilities”?
a. All assets acquired and liabilities incurred during the marriage individually by either spouse or jointly by them.
Example: Husband and Wife buy a house during the marriage and they use their earnings from their employment to purchase the home. The home is a marital asset.
Example: During the marriage, both Husband and Wife both have credit cards in their own names. The values of these credit cards as of the time of filing of the divorce are marital liabilities.
b. The enhancement in value and appreciation of nonmarital assets resulting from the efforts of either party during the marriage or from the contribution to or expenditure of marital funds
Example: Husband owns a home before the marriage. During the marriage, the parties use their earnings from their employment to pay down the mortgage on the home. A portion of the value of the home is a marital asset.
c. Interspousal gifts during the marriage
Example: Each year during the marriage, the parties on their anniversary exchange gifts of jewelry. These items of jewelry are marital assets.
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.
Example: During the marriage, both Husband and Wife contribute to a 401k incident to their employment. The parties’ contributions to their respective 401k’s are marital assets.
2. What are “nonmarital assets and liabilities”?
a. 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
Example: Before the marriage, the Wife owned an investment account in her name. During the marriage, the Wife did not add any funds to the account nor did she put the Husband’s name on the account. During the marriage, she purchased a car with the funds in this account. The Wife’s car is a nonmarital asset.
b. Assets acquired separately by either party by noninterspousal gift, bequest, devise, or descent, and assets acquired in exchange for such assets;
Example: During the marriage, the Husband’s brother passes away and leaves him a bank account which he keeps in only his name. Also, during the marriage, the Wife’s sister gives her a car as a gift. Both the bank account and car are nonmarital assets.
c. 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-
Example: The parties sign a prenuptial agreement which designates that all property in their own names are their separate, nonmarital property.
d. Any liability incurred by forgery or unauthorized signature of one spouse signing the name of the other spouse.
Example: During the marriage, the Husband, in order to get a credit card forges the Wife’s name. The Husband then spends $5,000 on this card. This credit card is a non-marital liability.
3. What happens if prior to the divorce, my spouse decides to pull all of the money from our bank accounts and take a cruise with their new partner?
You might have a claim for dissipation of marital assets. If the spouse uses the marital assets for personal purposes unrelated to the marriage, then depending on the timing of the purchase and the purpose to which such funds were used you might have a claim for dissipation of marital assets. If a spouse does engage in the dissipation of marital assets, then this is grounds for the Court to award an unequal equitable distribution.
4. My spouse owns a very successful business, what happens to the business in the divorce?
It is likely that the spouse who owns and operates the business would be entitled to keep the business. However, if the business has a value, then this value would be a marital asset. Often times we employ business valuators, who specialize in valuing business for purposes of determining their value in a divorce. If the value of the business is derived solely from the name and reputation of the spouse, then the business is likely to have a low value for divorce purposes. If the business has substantial assets or its value is derived from its reputation apart from the individual spouse, then the business could have a substantial value for divorce purposes. The latter would be best exemplified if the spouse owned a chain restaurant franchise.
5. During the marriage, my spouse worked for the same company and he is entitled to a pension when he retires, do I receive a portion of the pension when he retires?
Yes, interests in pension earned incident to employment are marital assets. The Court can order that you receive a portion of the pension when your spouse’s retires. How much you will receive will depend on how many years your spouse worked for the company and how many of those years were during the marriage.