SPLITTING UP THE ASSETS AND DEBTS-“EQUITABLE DISTRIBUTION”

•  Florida is termed a “no fault” divorce state
• Judges generally do not want to know the reasons of why the marriage ended
• Instead, courts want to make sure that the children are taken care of, and then divide marital assets and debts in a fair way.
• The legal term used in Florida is, equitable distribution
• As a general rule all assets and debts acquired during the marriage are subject to being divided equally.
• Examples of Marital Assets include: retirement accounts, stocks, bonds, annuities, IRAs, 401k plans, the house, rental property, condominiums, and other assets acquired during the marriage
• Examples of Marital Liabilities include: credit card debt, the mortgage on the house, loans, etc.

HOW CAN ONE SPOUSE FIND OUT WHAT THE ASSETS AND DEBTS ARE?

Frequently one spouse takes care of all of the financial dealings in the marriage and the other party has very little if any idea of what the assets or debts really are.  In order to get around that problem both sides are required to provide a financial affidavit and an extremely detailed financial disclosure (tax returns, checking account records, 401k information, IRA information, etc.).  This is called mandatory disclosure.

WHAT IS A MARITAL ASSET AND LIABILITY?- Florida Statutes § 61.075(5)(a)

• assets obtained and liabilities incurred during the marriage, individually by either spouse or jointly by them
• the enhancement in value and appreciation of non-marital assets resulting either from the efforts of either party during the marriage or from the contribution to or expenditure thereon of marital funds or other forms of marital assets
• interspousal gifts during the marriage
• all vested and non-vested benefits, rights, and funds accrued during the marriage in retirement, pension, profit sharing, annuity, deferred compensation and insurance plans and programs
• all real property held by the parties as tenants by the entireties whether acquired prior to or during the marriage

WHAT IS NOT A MARITAL ASSET OR LIABILITY?- Florida Statutes § 61.075(5)(b)

• 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
• assets acquired separately by either party by non-interspousal gift, bequest, devise or descent and assets acquired in exchange for such assets
• all income derived from non-marital assets during the marriage, unless the asset was treated, used or relied upon by the parties in exchange for such assets and liabilities

WHAT IF AN ASSET OR DEBT DOES NOT FIT INTO EITHER OF THESE CATEGORIES?

• Florida Statutes § 61.075(7) all assets and debts incurred by either spouse subsequent to the date of and not specifically categorized as marital or non-marital are presumed to be marital assets and liabilities.  This presumption can be overcome. However if, for example, marital assets and non-marital assets are put in the same account can make those funds marital.

HOW DOES A COURT DETERMINE THE AMOUNT OF THOSE ASSETS AND LIABILITIES?

• the value of a particular assets or debt can be determined from testimony of experts, such as appraisers and dealers, or the amount can be determined from what the owner of the property says it is.
• Florida Statutes § 61.075(6) states that the date the value of an asset or debt is determined on the day the spouses either into either a settlement agreement or the day the divorce proceedings are filed.

ONCE A COURT DETERMINES WHAT THE ASSETS AND LIABILITIES ARE HOW DOES IT THEN DISTRIBUTE THOSE ASSETS AND LIABILITIES?

• Florida follows something called equitable distribution, and it does not mean that everything will necessarily be divided 50/50, but equal is where a court starts.
• The factors a court looks to for an unequal distribution are located in Florida Statutes § 61.075

1. the contribution to the marriage, including the services as a homemaker.

2. economic circumstances of the parties

3. interruption of personal careers or education

4.  the contribution of one spouse to the career or educational opportunity of the other

5. the desirability of having an asset free from any claim or interference from the other party

6. the desirability of maintaining the marital home for the kids if it is feasible

7. intentional waste of assets

8. any other factors necessary to promote justice or equality