Last week, we discussed active effort in the appreciation of non-marital assets. Going hand in hand with the appreciation of non-marital assets is the next part of our service series, equitable distribution.
Equitable distribution is the distribution of marital assets and debts accrued during a marriage.
The general rule in Florida is that marital assets and debts will be divided equally between the parties upon divorce. It is important to note that even if an asset or debt is only in one name, the asset or debt is still considered marital if accrued during the marriage.
Examples of marital assets include:
- Real property ;
- Personal property;
- Gifts from one spouse to another;
- Insurance benefits acquired during the marriage;
- Any appreciation or enhancement in the value of non-marital assets;
- Retirement accounts established and/or contributed to during the marriage;
- Pension benefits, workers’ compensation benefits, social security income, interests in pending lawsuits, and stock options acquired during the marriage.
In summary, assets include any real estate, bank accounts, retirement accounts, stock options, businesses and business interests, and tangible personal property (such as jewelry, boats, automobiles, and even pets).
Liabilities include any kind of debt such as a mortgage, credit card debt, automobile loans, tax liens, etc.
Non-marital property are assets and/or liabilities acquired BEFORE the marriage, and remain the sole and separate property of the spouse upon divorce, with the exception of contributions made during the marriage and equity accrued during the marriage if marital funds are used to increase the value of an asset.
Unless steps are taken to change the title or the value of the property during the marriage, the following types of property are considered non-marital assets:
- Assets or liabilities that a party came into the marriage with ;
- Assets or liabilities acquired by an exchange for a non-marital assets;
- Assets or liabilities acquired by noninterspousal gift or inheritance;
- Income derived from non-marital assets during the marriage (unless the income was used by the parties as a marital asset);
- Any assets and liabilities excluded from being considered marital property pursuant to a valid written agreement (for example, a valid prenuptial agreement); and
- Any liabilities incurred where one spouse forged the other spouse’s name without permission.
There are instances where non-marital property is converted into marital property. This can occur when the non-marital property is retitled with the addition of the other spouse’s name. This also happens upon the commingling of assets, or the combining of marital and non-marital assets. An example of combining marital and non-marital assets includes when a married couple open a joint bank account and add non-marital funds to the account (such as their pay checks).
A third type of conversion occurs when the value of a non-marital asset is enhanced due to the labor or financial contribution of either spouse during the marriage.
Courts allow for unequal distribution of marital assets in instances of marital misconduct along with an intentional dissipation of marital assets. These situations can arise in instances where marital funds have been spent on an extramarital affair, were gambled away, or used to support a drug addiction.
It is extremely important to note that equitable distribution cannot be modified.
If you're going through divorce or planning to, schedule a complimentary consultation to see how we can help you with equitable distribution.