Divorce and Property Improvements in Florida

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 How Does Florida Divide Property in Divorce?

Divorce, or dissolution of marriage, is the legal process of terminating a marriage, which is overseen by a court of law in the state in which one or both of the divorcing spouses reside. The process for obtaining a divorce and acceptable grounds for divorce depend on the state.

Florida is a “no-fault” divorce state. This means that a spouse does not need a reason to seek a divorce in Florida and does not have to prove any grounds. It is enough for the spouses to state that they no longer want to be married. However, proving adultery may affect other issues in a divorce, e.g., child custody and property division.

Under Florida divorce laws, a divorce can be completed on average within a minimum of 200 days. The state has divorce residency requirements; the spouse filing for the divorce in Florida has to have lived in the state for a minimum of 6 months.

Furthermore, in Florida, the issues of property and debt distribution that come up in a divorce are often settled between the parties in a marital settlement agreement. But when parties cannot reach an agreement, a Florida court is tasked with dividing up a couple’s assets and liabilities.

Even though many property settlements are decided outside the courtroom, the factors judges consider in dividing property affect the relative strength of each side’s bargaining position. So, understanding how a court allocates a couple’s property upon the dissolution of a marriage is critical for any party to a divorce.

Generally, in the absence of an effective marital agreement, upon divorce:

  • Each spouse keeps their non-marital, separate assets;
  • A couple’s marital assets are subject to equitable distribution;
  • The wealthier spouse may also have to pay alimony to the less wealthy spouse calculated based on the wealthier spouse’s income and;
  • One spouse may also have to pay child support to the other in some circumstances.

What Property Is Characterized as Marital or Non-marital Assets?

Marital assets include assets acquired during the marriage by the spouses, either individually or jointly. Marital assets include the following as well:

  • The increase in value and appreciation of non-marital assets achieved through the efforts of either spouse during the marriage or by the expenditure of marital funds or assets;
  • The paydown of the principal of a mortgage secured by non-marital real property if the paydown has been paid down with marital funds;
  • A portion of the passive appreciation of non-marital property;
  • Gifts between the spouses made during the marriage; and
  • All vested and unvested interest accrued during the marriage in retirement, pension, profit-sharing plans, annuities, deferred compensation, and insurance benefits.

Non-marital assets include the following:

  • Assets acquired by one spouse as an inheritance;
  • All income generated by non-marital assets unless the couple treated the income as a marital asset;
  • Assets characterized as non-marital by a valid prenuptial or ante-nuptial agreement; and
  • Assets acquired in exchange for non-marital assets following the Florida guidelines.

Florida law expresses a presumption that marital assets should be distributed equally in a divorce unless there is a justification for an unequal distribution based on all relevant factors.

What Is Equitable Distribution?

The law states that “the court shall set apart to each spouse that spouse’s non-marital assets and liabilities, and in distributing the marital assets and liabilities between the parties, the court must begin with the premise that the distribution should be equal unless there is a justification for an unequal distribution based on all relevant factors.”

As noted above, Florida follows “equitable distribution” in dividing marital property upon divorce. Under Florida’s equitable distribution law, the starting presumption is that each party usually receives half of marital assets and liabilities regardless of fault.

However, each spouse’s financial situation is considered in adjusting the distribution, as are certain other specific exceptions to the definition of marital and non-marital property.

Moreover, “equitable” does not always necessarily imply “equal.” Some allegations need to be made in the initial divorce pleadings for the court to apply the equitable distribution statute to divide assets and liabilities. Any requests for unequal distribution should be requested specifically and then substantiated during the discovery process with documentary evidence. Further assistance can be sought from a local Florida lawyer.

What Factors Are Considered by the Court in Equitable Distribution?

One of the main tasks of a Florida divorce court is to classify which property and debt are marital and which non-marital. Generally, all property acquired by either spouse before the marriage is considered non-marital property. At the same time, all property acquired during the marriage is marital property, as stated earlier.

There are several exceptions. As noted above, property acquired by gift or inheritance is generally non-marital property. When marital and non-marital property has been mixed or commingled, a court may be able to untangle the assets, but sometimes combined property can become marital property.

Florida law provides that non-marital property that has been titled in joint tenancy becomes marital.

Moreover, the relevant statute states that there is a presumption that the distribution of marital assets and liabilities should be equal unless there is justification for an unequal distribution based on other factors that may be relevant.

For example, one of the factors that justify unequal distribution is the contributions to the marriage by each spouse. These can include financial contributions but encompass care and education of the couple’s children and sacrifices made by one spouse who has acted as a homemaker.

Furthermore, the economic circumstances of each party are considered. A spouse who has greater financial need may receive a larger distribution of marital property than a spouse who has a lesser need. The duration of the marriage is also a factor that is considered.

The judges examine whether the educational goals of either spouse have been interrupted and whether one spouse personally contributed to the other spouse’s achievement of their educational or career goals. These factors affect how the Florida courts divide the property.

Keep in mind that plans for property can be significant, too. For example, one spouse may want to keep certain assets, e.g., a business, in the same form without any interference from the other spouse. One spouse may want to keep their interest in a business free from interference by the other party.

Or a spouse may want to keep the marital home as a residence for dependent children. A court may look favorably on these types of requests.

Another factor is the relative contribution of each spouse to the acquisition, enhancement, and production of income or the improvement of both the marital assets and the non-marital assets of the parties.

The Florida statute warns spouses against the intentional dissipation, waste, and depletion of marital assets after the filing of the divorce petition or within two years before filing one. A court is likely to make an award of property with a value of one-half of the dissipated marital funds to the aggrieved spouse to compensate them for the loss of their share of the assets.

Lastly, Florida’s equitable distribution statute has a catch-all provision that permits the courts to consider any other factors necessary to do equity and justice between the parties. However, this typically does not include considering adultery or other issues of fault as the grounds for divorce, according to the Florida Supreme Court.

The purpose of equitable distribution is not to punish adulterous behavior. The only way infidelity is relevant to the financial situation is if it can be demonstrated that adulterous behavior has depleted marital resources.

There are a couple more aspects to keep in mind when considering property distribution factors. Marital debt must also be divided between the parties, and a court will examine the same facts in deciding which spouse will be responsible for the debt.

How Are Property Improvements Treated in a Divorce?

In a divorce, an issue may arise as to whether separate property retains its non-marital character if marital funds are used in connection with separate property or commingled with separate funds.

Both case law and statutory law in Florida provide that appreciation of a separate, non-marital asset that is solely the result of market forces, such as inflation, is not a marital asset. It is not subject to division between the parties in a divorce.

Appreciation of non-marital property that is active is appreciation that occurs when those who do not own the non-marital property take active steps to increase the value of it. The following example may help to demonstrate how this works:

  • Party A buys a condo on the shoreline in Cocoa Beach;
  • Party A meets Party B one year later, and they marry;
  • The market for real estate causes the property’s value to increase substantially;
  • During their marriage, the spouses use funds from a joint bank account to pay down the mortgage on the condo;
  • Party A and Party B separate a few years later and file for divorce.

Per Florida law, marital assets include the increase in value and appreciation of non-marital assets resulting either from the efforts of either party during the marriage or from the contribution of marital funds.

Contributions by either spouse to the increased value of the other spouse’s non-marital property may create a legal right to the equitable distribution of the property in divorce.

However, it is important to recognize that improvements paid for by marital funds or the expenditure of marital funds to a non-marital asset do not transform the entire asset into a marital asset. Only the increase in value becomes a marital asset.

So, in the example above, the value of part of the mortgage paid with marital funds would be marital property. The rest of the property would remain non-marital property.

Do I Need the Help of a Lawyer for My Property Division Issue?

If you reside in Florida and expect to have issues regarding the division of your property in your divorce, you want to consult a Florida divorce attorney to help you with your case. Your attorney can provide you with guidance and representation in your case.

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