Dividing property is often one of the most complicated parts of ending a marriage. From the family home and retirement accounts to vehicles, investments, business interests, and outstanding debts and just stuff, spouses may have questions about what they are entitled to keep and how courts determine a fair outcome.
In Florida, marital assets and debts are divided according to the principle of equitable distribution. This does not mean that property is divided equally or that each spouse will get half of every piece of property. Instead, Florida courts identify marital and nonmarital property, determine the value of marital assets and debts, and evaluate a range of factors to decide how to divide property between spouses.
At Luhrsen Goldberg, we understand that property division involves more than simply assigning dollar values to assets. We work hard to help our clients work out agreements about how to split property with their ex whenever possible, while preparing to advocate for our clients in court if necessary. Contact our law firm today to schedule a free consultation with a Florida property division attorney.
What Is Equitable Distribution in Florida?
Equitable distribution is the process Florida courts use to divide marital assets and liabilities during a divorce. Under this principle, Florida courts start with the assumption that marital property should be divided equally. However, a court may order an unequal distribution based on the circumstances of the case.
The distinction between equal and equitable is important. Equal distribution means dividing the marital estate into two equal shares. Equitable distribution means following the legal framework to reach a fair result, which will generally be an equal split unless there is a reason for a different allocation.
For example, imagine a situation where a couple has $600,000 in marital assets and $100,000 in marital liabilities. This gives them a net marital estate of $500,000. An equal distribution would give each spouse a share of the marital estate worth $250,000, while an equitable distribution may vary based on the unique facts of the case.
Of course, this doesn’t mean that each spouse will receive exactly half of a marital asset. One spouse might keep the marital home while the other receives a larger share of retirement funds and other investments. If the overall allocation is appropriate, the distribution can be equal in value even though the spouses receive different property. In other situations, one party may owe another party an equalization payment so as to effectuate the division of marital property.
The court’s task is to identify the property, determine which assets and liabilities are marital, establish appropriate values, and distribute the marital estate according to Florida law. In many cases, the parties are able to work out an agreement about property division on their own. As long as the agreement complies with Florida law, a court will approve the agreement when it finalizes the divorce.
What Property Is Divided in a Florida Divorce?
One of the first steps in equitable distribution is classifying property as marital or separate property. The distinction between the two can significantly affect the financial outcome of a divorce.
Marital Property
Marital assets include most property acquired by either spouse during the marriage, whether the property is held individually or jointly, other than separate property. Common examples of marital property include:
- Real estate purchased during the marriage
- Bank accounts and investment accounts funded with money earned during the marriage
- Retirement benefits and contributions accumulated during the marriage
- Vehicles, furniture, jewelry, and other personal property acquired during the marriage
- Business interests acquired or developed during the marriage
- Certain increases in the value of separate property
Marital property isn’t limited to assets that were purchased in both spouses’ names. Indeed, an asset that was acquired by one spouse during the marriage is likely to still be considered marital property, eventhough the other spouse never appeared on the title or account.
For example, if one spouse earns a salary during the marriage and uses those earnings to purchase investments in a brokerage account in their own name, those investments are likely still marital property. Similarly, if one spouse purchases a vehicle during the marriage using their salary, the vehicle is still considered marital property even if only one spouse’s name is on the title.
Separate Property
Nonmarital or separate property generally belongs to one spouse. Separate property is not subject to equitable distribution during a divorce. It can include:
- Property owned before the marriage
- Certain gifts received individually from someone other than the spouse
- Inheritances received individually and maintained separately
- Property deemed separate through a valid prenuptial or postnuptial agreement
- Certain income derived from nonmarital assets
- Assets exchanged for qualifying separate property
Classifying assets as separate property isn’t always as simple as determining when it was acquired. How the asset was handled during the marriage, whether marital money was used to improve it or mixed into it, and whether the spouses maintained clear financial records can all play a role in how an asset is characterized.
For example, one spouse owned a condominium before getting married. If the couple uses marital funds to pay down the mortgage or make substantial improvements on the condo, some of the property’s value or appreciation may be considered marital property. The spouse’s original interest in the condo may not become marital property, but some portion of the value of the asset may be subject to equitable distribution.
What Happens When Separate and Marital Property Are Mixed?
Commingling occurs when separate property and marital funds become mixed in a way that makes their ownership or classification more difficult to establish. Consider a spouse who inherits money and deposits it into a joint bank account that is used to pay household expenses, mortgage payments, and family bills. The spouse may argue that the inheritance should remain separate property; the law generally treats such commingling as a transforming of what was originally separate property into marital property.
Commingling does not mean that every asset becomes marital. Keeping separate accounts, preserving inheritance documents, maintaining records of premarital assets, and documenting transfers can help clarify the source and ownership of funds. When substantial assets are involved, a Florida family law attorney can help determine what documentation may be necessary to argue that an asset is separate property.
How Are Debts Divided in a Florida Divorce?
Equitable distribution applies to liabilities as well as assets. A divorce court must consider marital debts when determining each spouse’s overall share of the marital estate. Marital liabilities may include:
- Mortgages on the family home or other marital real estate
- Credit card balances incurred during the marriage
- Car loans
- Personal loans used for marital expenses
- Certain business debts
- Other qualifying financial obligations incurred during the marriage
As with assets, the name on an account does not necessarily determine whether a debt is marital. A debt held in one spouse’s name may still be classified as marital depending on when and why it was incurred.
For example, if one spouse used a credit card that was in their name for family expenses during the marriage, the balance on the card would be considered a marital debt. However, if that same spouse used a credit card to purchase gifts for their affair partner, that debt would likely be considered separate property.
It’s important to understand that dividing marital debt in a divorce does not release a spouse from their obligation to pay the debt if their name is on it. For example, if both spouses signed a mortgage, a divorce judgment that assigns responsibility for the payments to one spouse does not remove the other spouse from the loan. A Florida divorce attorney can advise you of the steps necessary to remove one spouse from a mortgage, loan, or other debt.
How Do Courts Divide Property in Florida?
Once a court determines which assets are marital property and which are separate property, the next step is to value these assets and debts. Obtaining a valuation is necessary to ensure that the debt is divided equitably. While valuation is often straightforward, financial experts may be necessary to determine the value of more complex assets, such as business interests.
Florida courts generally start with the premise of an equal division of marital property. However, courts will consider a variety of factors related to the circumstances of the marriage when deciding how to distribute marital property. This may lead to an unequal allocation of marital property.
The court will consider:
- Each spouse’s contributions to the marriage, including financial contributions as well as non-financial contributions (such as raising children and maintaining the household)
- The parties’ economic circumstances
- The duration of the marriage
- Career or educational sacrifices made by one spouse to help the other
- The preservation of a business or professional practice (i.e., the need to avoid dividing a business or other entity to avoid interfering with its operation)
- Each spouse’s contribution to marital assets
- Whether the marital home should be retained for dependent children
- Any intentional dissipation of marital assets
- Other factors necessary to achieve equity and justice
These factors do not mean that one spouse is automatically entitled to a greater share because they earned more money, stayed home with the children, or because the other spouse behaved badly during the marriage. The court will evaluate all relevant evidence to determine how marital property should be divided.
For example, if one spouse has a gambling problem, that may raise concerns that marital assets have been wasted. However, ordinary spending or financial decisions won’t be considered dissipation. If a party believes that there should be an unequal distribution of marital property, they should be prepared to explain the legal and factual basis for the request.
Keep in mind that these factors are what a court will consider if a divorce case goes to trial. It is possible (and in many cases, preferable) for spouses to work out their own property settlement agreement. Our Florida marital property division lawyers can help you negotiate an agreement that protects your financial interests.
How Luhrsen Goldberg Can Help
Property division can have lasting consequences for your financial future. The legal team at Luhrsen Goldberg helps clients navigate Florida divorce and property division matters based on their individual circumstances and long-term goals. We can help identify and classify assets, evaluate disputed property claims, address complex financial issues, and negotiate settlements that account for the full marital estate.
Our team also considers the full impact of a property settlement, and identify potential issues related to the tax consequences of certain types of property division. We will help you understand your options and work towards a resolution that protects your financial future. Reach out to our law offices today at 941-265-1513 or fill out our online contact form to schedule a free evaluation with our Florida divorce attorneys.