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08/29/14 It's The Law: Surprises When Property is Divided in Divorce

It's The Law

Surprises When Property is Divided in Divorce

(08/28/14)

Question:

I am getting divorced. I inherited a lot of money from my father and do not think my spouse should get any of that. Somebody told me Florida law divides property in divorce 50/50. If that's true, I have a problem. Can you explain?

Answer:

Florida statutes require marital assets be equitably distributed in a divorce. That is the first issue addressed by the judge in a divorce case. After the court determines what assets will be owned by each party after the divorce, it can address issues like alimony and child support. Section 61.075 Florida Statutes establishes the procedure for judges to follow in equitable distribution.

The statute mandates that the court begins with the premise that distribution should be equal, but unequal distribution is allowed if there is justification. Factors to justify unequal distribution include contribution to the marriage by each spouse, economic circumstances of the parties, interruption of personal career or educational opportunity of either party, and desirability of retaining any asset (most often a business or professional practice) intact and free from any claim of the other party. That mean, there is not an automatic 50/50 division of marital assets.

Marital assets are defined by the statute. They generally include assets, incomes and liabilities acquired or incurred during the marriage, individually or jointly. Assets owned prior to marriage or gifts from others to one of the spouses during the marriage are generally non-marital. These rules seem simple, but they end up riddled by acceptations as the courts strive to reach a correct result.

Marital assets are divided between the parties; non-marital assets are not. That means the court must determine what assets are marital and what assets are non-marital. Then, it values the substantial marital assets and decides who gets what.

The statute also has some surprises. Increase in value of non-marital assets can be marital if the increase is due to effort of one or both parties or expenditure of marital funds. In that case, the court must determine what portion of the value of an asset is marital and what portion is non-marital, and then divide the non-marital portion. Inter-spousal gifts during the marriage are marital assets. Real property or personal property titled jointly by the parties as tenants by the entireties is presumed marital, but that presumption can be overcome by clear and convincing evidence. One way of overcoming the presumption is to establish agreement that the asset is titled jointly for survivorship purposes only and not as a gift. That can be difficult if the agreement is not in writing.

Pre-marital gifts between the parties are not considered marital assets. That includes the engagement ring.

Until July 1, 2008, Florida recognized a concept known as "special equity." Special equity was created when one spouse contributed non-marital assets to acquisition of property held as tenants by the entireties, unless the other spouse could prove a gift was intended. In 2008, the legislature abolished special equity and replaced it with the opportunity for a contributing spouse to establish that contribution warrants unequal distribution. That concept has proven difficult when financial accounts are involved. The recent case of Sorgen v. Sorgen is a good example.

In that case, the wife inherited a home with her sisters before she was married. The wife and her sisters rented the home and deposited the rent in a separate account. After the wife married, the wife bought out her sisters. The wife and husband renovated the home using joint funds. Rental income from the home was deposited in a joint account. The home was sold and the proceeds were placed in a joint account.

The husband filed for divorce. The wife claimed the proceeds from sale of the house were non-marital, but the court disagreed. As noted by the court, when a spouse deposits funds in a joint account where they are commingled with other funds and become untraceable, a presumption is created that the spouse made a gift to the other spouse of an undivided one-half interest in the funds.

Your inheritance may be non-marital if you placed it in an account owned solely by you and did nothing with it. If you invested the money it appreciated in value, the appreciation is probably a marital asset. If you put the inheritance in a joint account, you are probably going to be very unhappy when the judge divides assets.

The facts and circumstances of your specific situation will determine the outcome. You should discuss those facts with an experienced attorney before proceeding further.

By: William G. Morris, Esquire.

William G. Morris is an attorney with offices at 247 North Collier Boulevard on Marco Island, Florida. His practice covers a broad range of subjects, including civil litigation, real estate, business and corporate law, estate planning and probate, domestic relations and contracts. He writes this column periodically with respect to legal matters that frequently affect non-lawyers. The information contained in this column is not intended as legal advice and, of necessity, is generalized. For questions about specific circumstances, the reader should consult a qualified attorney.

Questions for this column can be sent to: William G. Morris, e-mail: wgmorrislaw@embarqmail.com or by fax, (239) 642-0722 or

The Marco Island EagleOther articles of interest can be viewed at our website, www.wgmorrislaw.com

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