Question: I owned a house when I got married. Now I am getting divorced and my spouse wants half of the house. Do I get to keep the house?
Answer: Section 61.075 of Florida Statutes governs distribution of assets and liabilities in divorce cases. The statute requires equitable distribution of marital assets and liabilities and lists factors to be considered by the court in determining distribution. The statute requires a judge clearly identify marital and non-marital assets. Non-marital assets are generally assets owned before marriage and gifts or inheritance received during marriage. Marital assets are generally income after marriage and increased value of assets from personal effort or contribution of marital funds.
If non-marital assets passively increase in value, the increase is non-marital. But, when the increase is related to action of the owner or investment of marital monies, the appreciation may be marital. The statute specifically provides that marital assets include enhancement in value resulting from the efforts of either party during the marriage or from contribution to or expenditure thereon of marital funds or other forms of marital assets.
Many cases involve dispute over whether appreciation in value is due to the efforts of a spouse or not. One of my favorite cases on this area is Robbie v. Robbie. In that case, Michael Robbie was given a 9.5% share of the corporation which owned the Miami Dolphins. Michael was General Manager of the Dolphins. During his marriage, the value of his stock ownership increased considerably. His wife claimed half of the appreciation in their divorce.
Michael argued that although he held the title of General Manager, he had no real authority and made no command decisions. Testimony indicated he did work in the business, carrying out duties like changing season ticket holders from the Orange Bowl to Joe Robbie stadium. The judge found his efforts contributed to the franchise and its overall success and that the increase in value of his stock ownership was marital property.
In a more recent case, Florida's Supreme Court settled a dispute between appellate courts as to whether market-driven appreciation of property that accrues during marriage is a marital asset, when marital funds are used to make monthly mortgage payments. In the Mitchell case, Florida's Second District Court of Appeal the court ruled that increase in equity resulting from marital funds paying down a mortgage balance is a marital asset but appreciation due entirely to passive inflation was not. In the
Stevens case, the First District ruled that all appreciation during the course of the marriage was marital when marital funds were used to make mortgage payments and pay taxes.
Florida' Supreme Court settled the dispute by applying section 61.075 Florida Statutes in the case of Kaaa v. Kaaa and ruled that where marital funds are used to pay the mortgage, passive appreciation during the marriage is a marital asset.
When marital funds are contributed to pay a mortgage, the issue is clear. The issue is not so clear when it is argued that the owner's spouse has contributed time and effort to the asset and therefore appreciation and value is marital. That can most easily be seen in retirement accounts that exist at the time of the marriage. Contributions to the account during marriage are marital as is appreciation in value on those contributions. But, the original account and any appreciation of the account will be non-marital if the owner takes no action to manage or otherwise supervise the account. Where the owner is involved in buying and selling financial investments for the account, all of the appreciation may be marital.
This can be a complex area and good legal advice will be important. Before proceeding further, you should consult with an experienced attorney.
By: William G. Morris, Esquire