Assets and Liabilities
In Florida, property is divided in a divorce proceeding pursuant to “equitable distribution.” Florida law requires that the division of marital assets and liabilities in a divorce case is equitable, or fair, in value. Real, tangible and intangible property, such as a house, bank accounts, retirement accounts, art collection, stocks, jewelry accumulated during the marriage, all constitute “marital assets.” Debts, such as a mortgage, loans, taxes, and credit cards accumulated during the marriage, are all considered to be “marital liabilities” and must be divided between the parties so that each person receives the equitable value of the marital estate.
The first step in equitable distribution is to identify which assets and liabilities are marital and which are non-marital. Separate, non-marital property is not subject to distribution in a divorce proceeding. As a general rule, assets and liabilities acquired prior to the marriage are considered separate, non-marital property, while assets and liabilities acquired during the marriage are considered marital property. Other types of separate, non-marital property include gifts acquired by one spouse (which are not gifts from the other spouse), an inheritance during the marriage, income derived from non-marital assets during the marriage, unless treated or used by the parties as marital funds, assets and liabilities deemed to be separate based upon a written agreement of the parties, such as a pre-nuptial or post-nuptial agreement, and any liabilities incurred by forgery of one spouse signing the name of the other spouse. In addition to property acquired during the marriage, marital property includes any enhancement or appreciation in value of non-marital assets during the marriage due to the efforts of either party during the marriage or the spending of marital funds, inter-spousal gifts, vested and non-vested benefits associated with stock- options, retirement, pension, and insurance plans accrued during the marriage, jointly titled personal property, and real property held as tenants by the entireties.
The second step is to value each asset and each liability. Depending upon the complexity of your marital assets and liabilities, we may be required to use a forensic accountant or property appraiser to provide actual values. Once we know the actual value of the assets and liabilities that you and your spouse accumulated during the marriage, we then discuss your “wish list” of preferred assets and liabilities that you would like to receive in your divorce. Our goal is to allow you to keep those assets and not have to liquidate them to pay attorneys’ fees and costs of litigation.
The third step is to divide the property based upon the valuations. The parties can negotiate their own division of property or the court may equitably distribute such marital property between the parties. Under certain circumstances, an unequal distribution can be made by the court after considering relevant factors, including the length of the marriage, each spouse’s economic situation, the spouse who will be primarily caring for the children and the ability of the children to reside in the marital home, spousal contributions to the marriage, interruption of a career for the sake of the marriage and/or the children, and whether either spouse wasted marital assets two years prior to the filing of the petition for dissolution of marriage or after the filing of the petition.