Property Division Attorneys | Vazquez & Stockmar, PLLC

Equitable Distribution In Florida Divorces

Equitable distribution, also known as property settlement, is a process by which the assets and liabilities of marriage are allocated to divorcing parties. Property settlements can either be through a marital settlement agreement or by court order after a divorce trial. Florida law requires an equal distribution of marital assets and liabilities unless there is a justification for an unequal distribution based on all relevant factors.

Parties should understand that property settlements are a separate financial aspect of divorces, along with alimony and child support.

Child Support – The amount that one parent will pay the other parent every month to roughly equalize the support for the children of the marriage. Child support is the child’s right, not the parent’s right, and therefore can always be modified based on a change in circumstances.
Alimony – Court-ordered financial support granted from one spouse to the other following a divorce. Depending on the type of spousal support awarded, alimony may or may not be modifiable.
Property Settlement – This is generally a one-time division of assets and liabilities at the time of the divorce.

The key to property settlements or division of assets is determining what property is marital and what property is nonmarital. Marital property is all the assets and liabilities accumulated by the Parties during the Marriage.

Property settlement can be extremely complicated when considering the multitude of financial factors that can comprise a settlement. The simplest property settlements are in uncontested divorces where both parties agree on keeping their assets and debts, and there is no marital property to divide. However, family businesses, debt, investments, co-mingled marital and non-marital property, marital waste, tax liabilities, and hiding assets can complicate property settlements. Such issues are often discovered throughout mandatory disclosures.

Contact Vazquez & Stockmar, PLLC today to request a free consultation with a skilled property division attorney!

Marital Assets & Liabilities In Florida Divorce

It is important to highlight that not all your assets are considered a “marital asset” of the marriage. Florida Statutes Chapter 61.075 defines marital assets and liabilities in divorce actions. This statute states that marital assets and liabilities include the list below.

Assets acquired and liabilities incurred during the marriage, individually by either spouse or jointly by them.
The enhancement in value and appreciation of nonmarital assets resulting from either party’s efforts during the marriage or from the contribution to or expenditure thereon of marital funds or other forms of marital assets, or both.
The paydown of the principal of a note and mortgage secured by nonmarital real property and a portion of any passive appreciation in the property if the note and mortgage secured by the property are paid down from marital funds during the marriage. The portion of the passive appreciation in the property characterized as marital and subject to equitable distribution is determined by multiplying a coverture fraction by the passive appreciation in the property during the marriage.
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.

Thus, let’s say you inherit an expensive piece of jewelry prior to your marriage, this would be considered a non-marital asset. However, if you and your spouse decide to buy a piece of artwork together during the marriage, it would be considered a marital asset. How to divide assets and liabilities can become quite complex and emotional between the parties. The family law attorneys at Vazquez & Stockmar, PLLC take these types of equitable distribution matters seriously and use our keen legal skills to perform a thorough analysis of the division of assets and liabilities.

Nonmarital Assets & Liabilities In Florida Divorce

Nonmarital assets and liabilities are those assets and liabilities that will not be split between the parties in a Florida divorce action. Nonmarital assets and liabilities include the following.

Assets acquired by either spouse prior to the marriage.
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 nonmarital assets during the marriage unless the income was treated, used, or relied upon by the parties as a marital asset.
Assets and liabilities excluded from marital assets and liabilities by valid written agreement of the parties and assets acquired and liabilities incurred in exchange for such assets and liabilities.
Any liability incurred by forgery or unauthorized signature of one spouse signing the name of the other spouse.

Relevant Factors To Justify Unequal Distribution Of Assets

Equitable Distribution of Assets under Florida law contains a presumption towards equal distribution of marital assets. However, Florida Courts have wide discretion to distribute assets unequally based on certain factors, including the contributions of each party to the marriage, such as homemaking, the economic circumstance, length of the marriage, career hiatus, support of spouse’s career, marital waste by a spouse, and other necessary factors.

For your information and review, we have included Florida Statute 61.075, which lists the relevant factors for unequal distribution.

“The contribution to the marriage by each spouse, including contributions to the care and education of the children and services as homemaker.
The economic circumstances of the parties.
The duration of the marriage.
Any interruption of personal careers or educational opportunities of either party.
The contribution of one spouse to the personal career or educational opportunity of the other spouse.
The desirability of retaining any asset, including an interest in a business, corporation, or professional practice, intact and free from any claim or interference by the other party.
The contribution of each spouse to the acquisition, enhancement, and production of income or the improvement of, or the incurring of liabilities to, both the marital assets and the nonmarital assets of the parties.
The desirability of retaining the marital home as a residence for any dependent child of the marriage, or any other party, when it would be equitable to do so, it is in the best interest of the child or that party, and it is financially feasible for the parties to maintain the residence until the child is emancipated or until exclusive possession is otherwise terminated by a court of competent jurisdiction. In making this determination, the court shall first determine if it would be in the best interest of the dependent child to remain in the marital home; and, if not, whether other equities would be served by giving any other party exclusive use and possession of the marital home.
The intentional dissipation, waste, depletion, or destruction of marital assets after the filing of the petition or within 2 years before the filing of the petition.
Any other factors necessary to do equity and justice between the parties.”

For instance, if parties were married for over 19 years, and one spouse was the homemaker for and spent the majority of the marriage raising the children in the marital home supporting their spouse’s career, the court will consider these factors when making an unequal equitable distribution. After the dissolution of marriage legal process has begun, the homemaker spouse still resides with the minor children in the marital home and is seeking the marital home as part of unequal distribution. It is up to the court’s discretion to determine if it would be in the best interest of the minor children to stay in the marital residence and whether it would be financially feasible for the parties to maintain the residence until the children are emancipated. An unequal equitable distribution is not a guarantee, and thus you can reach out to the divorce attorneys at Vazquez & Stockmar, PLLC should you have questions regarding these types of matters.

Mediating & Negotiating Property Settlements

Mediating a property settlement in Florida divorces can be a complicated process. Assets in a Florida divorce often are not cut and dry. A bank account or stock account is easy to divide, but an investment property in litigation with a general contractor is much more difficult to value. Deciding what to do with a condominium that is not worth the value of the Mortgage, but is being used by a relative, is difficult to value and split. How do you value a business that has assets but has been realizing losses for the last few years? Astute and creative approaches to asset and liability division are key to successful negotiation.

Having a clear understanding of the values of the assets and the liabilities and a creative plan for reaching an agreement can be key to a successful settlement. Any party with a complicated financial picture must be represented by an attorney, experienced and skilled in financial matters. Unfortunately, many lawyers within family law practice have no formal training in financial matters. Here at Vazquez & Stockmar, PLLC, our divorce attorneys pride themselves on taking on complex divorce action that requires in-depth financial analysis.

Keeping The Marital Home In Your Divorce

The home you and your spouse resided in during the marriage is considered the marital home if the property was bought. When a home was bought during the marriage, the property is considered “tenancy by the entirety” and is a marital asset regardless of who’s name is reflected on the deed. When a property is held this way, it cannot be devised, sold, or mortgaged without the other spouse’s consent. For these reasons, the marital home will be an asset of the marriage and distributed as such during the divorce.

The court may award exclusive possession of the marital home to one of the parties for a specific period of time if it is in the best interest of a minor child and financially feasible. The courts want to provide stability for minor children during the divorce process. This may be carried out by awarding exclusive possession of the marital home to a parent that has a majority of the timesharing or has been the parent primarily caring for the child during the marriage.

Keeping the marital home in a Florida divorce is often the most significant marital asset. The marital home differs from other assets in that there are often other considerations that factor into the disposition of the home beyond providing equal distribution to the parties. Florida Courts have the discretion, particularly with the marital home, to take equitable considerations in fashioning a property distribution, even if it results in unequal distributions.

The marital home can be awarded to either spouse, sold, or in some cases, be surrendered to the mortgage holder.

Are There Minor Children Still In The Marital Home?
Will The Lower-Income Spouse Be Able To Afford The House?
What Is The Equity In The Marital Home?
Can One Or Both Spouses Afford The Marital Home?
Are Other Assets Available To Make An Equalizing Payment If That Is Necessary?
Is There A Loan Or Mortgage On The Home?

Inheritance In Florida Divorce Actions

Inherited property is not considered marital property under Florida law. According to the Florida statutes, non-marital assets are acquired by gift, bequest, devise, or descent. Therefore, non-marital inherited assets will keep their non-marital classification unless they are co-mingled with marital assets. If kept separately, they will retain their non-marital status. For example, if you inherited a piece of jewelry prior to your marriage, it would not be considered a marital asset.

Parties that inherit assets during a marriage that wish to retain their non-marital status must be careful in managing the assets. For example, a party inheriting a stock account would not want to combine that account with another, co-titled with their spouse.

To safeguard pre-marital assets, such as trust property, financial accounts, stocks, real property, or other inheritances, we recommend our client enter into a prenuptial agreement and clearly define pre-marital assets and how they are property will be treated should their marriage end.

Pension & Retirement Accounts In Florida Divorce Property Settlements

Pension plans and retirement accounts are considered marital assets in Florida divorces if acquired during the marriage. Their division is based on the increase in value of said account during the marriage term. Amounts included in pension plans that predate the marriage are non-marital. For example, if a party had a retirement account worth $50,000 prior to marriage, and that account increases by $60,000, then just the $60,000 (increase in value during the marriage) is considered a marital asset.

Typically, courts will order a Qualified Domestic Relations Order (QDRO) to divide retirement and pension accounts.

A Qualified Domestic Relations Order is an order that provides for the division of pension and retirement accounts without triggering tax consequences for either party. Without a proper QDRO, the division of assets would be deemed an early distribution and be subject to tax and early withdrawal penalties.

Many family law firms are not qualified to prepare QDROs because they lack the financial expertise and generally outsource this work to a qualified law firm. However, Vazquez & Stockmar, PLLC is experienced and qualified to prepare QDROs and has been preparing these orders for over a decade.

Calculating QDRO’s In Florida

Pension plans and retirement accounts are considered marital assets in a Florida divorce. The amount of a pension plan or retirement account that will be divided is often a complicated process that includes the following factors:

What was the value of the asset before the marriage?
What was the growth of the nonmarital portion of the asset during the marriage?
What contributions were made to the asset during the marriage?
What reductions in the value of the assets did the parties voluntarily make during the marriage?
What contributions were made after the date of filing for dissolution of marriage?

Vazquez & Stockmar, PLLC is a law firm serving Central Florida. Our attorneys offer dependable services in several legal disciplines, including probate, estate planning, and family law. Get in touch with us today to request a free consultation!