Boca Raton Divorce Lawyer Blog

Married couples acquire many things together over the course of their marriage, including homes, vacation homes, bank accounts, automobiles, and stock portfolios. They frequently start businesses together as well.

What happens to the family business after divorce? How does it get valued, how does it get divided, who gets to continue to run the business .... these are just a few of the questions that need to be addressed in this situation.

Generally speaking, the courts do not like to keep the parties together in a business after a divorce. That being said, the business would have to be valued by a professional, and one party would have to make arrangements to buy out the other party's interest. This is the scenario which plays itself out most often.

There are those rare occasions when divorcing couples can, however, continue to operate a business together if they can agree on that arrangement. A story was reported today in the New York Post that dealt with the continuing operation of the Philadelphia Eagles by the divorcing owners, Jeffrey Lurie and his wife.

Although their particular situation is not generally the norm, it does occur. If you have questions about your particular business, professional practice, or any other jointly owned enterprise, it would be a good idea to obtain some professional advice from an attorney experienced in these matters.

Why is a prenuptial agreement important and what purpose does it serve? A prenuptial agreement is a contract between two adults, and it can cover a myriad of issues, limited only by the imagination of the contracting parties.

A prenuptial agreement most definitely, and frequently will, alter the rights of the parties should a divorce subsequently occur. Many agreements provide for the complete waiver and relinquishment of alimony and other support obligations from one party to the other. However, under Florida law, a waiver of temporary alimony under an agreement is unenforceable. You may wish to confer and consult with an experienced divorce attorney regarding this, as well as any other aspects of a prenuptial agreement.

Valuable property rights can also be given up under the provisions of a prenuptial agreement. In Florida, marital assets are most frequently divided 50-50 upon a divorce, so if one party feels that they will be contributing to the marriage in a greater proportion, they might want to provide for that contingency.

The actress Courteney Cox, who is involved in a divorce proceeding with David Arquette, apparently overlooked the importance of a prenuptial agreement. You can read her story now by following the link to her story in Forbes.

Although a marriage is considered a "partnership", that partnership does not necessarily have to be an equal partnership. This, in essence, is what a prenuptial agreement is all about. Courteney Cox may learn an expensive lesson in failing to participate in the execution of a prenuptial agreement.

Prenuptial agreements must, at a minimum, include complete financial disclosure by both parties; be executed without duress; and each party should have independent legal advice. Many times the validity of agreements are challenged, so a financial sanction should be assessed against the challenger who does not succeed in their endeavor to void an agreement.

Further information may be obtained on this area of the law by contacting Alan R. Burton, Esq. directly. Appointments are available in Boca Raton and Fort Lauderdale.

A person claiming entitlement to any credits or set offs fom the marital home must provide for these items in their marital settlement agreement.

If there is no agreement, and this issue is to be resolved by the court, the court will consider the factors in Florida Statute 61.077.

Among those factors are the following:

Whether exclusive use and possession of the home is being awarded
Whether or not alimony is being awarded
Whether child support is being awarded
The value of the use and occupancy to the person in possession
The value of the loss of use and occupancy to the person not in possession
Which party will be able to claim the deductions associated with the property, such as
Taxes, interest, etc
Capital gains taxes
Any other factor necessary to do equity

Many of these items can be overlooked when you are involved in the mediation process, and considering the disposition of the marital home. Don't overlook the importance of having a competent, well qualified attorney to represent your interests in your divorce case. There are many issues that an inexperienced litigant can easily overlook.

Generally speaking, a divorce should be a private matter. The proceeding often times involves sensitive and personal issues, which should not be made public. However, in Boca Raton, Fort Lauderdale and in other courtrooms throughout south Florida, contested divorce proceedings are conducted everyday.

Many times someone will say something, in a fit of anger or for other reasons, and then their statement comes back to haunt them in court. Never say anything that you do not want repeated in open court.

Not only are your statements admissible in court, but all of your postings, photographs and comments that you place in the public arena on social networks, such as Facebook and Twitter, become open game. Be careful what you say or do during a divorce....it could harm your case and significantly impact the outcome.

Most recently there has been a barrage of public divorce cases and separations involving celebrities, including Tom Cruise, Stevie Wonder, and Kristen Stewart, just to name a few.

You do not want to achieve your notoriety in the context of your divorce case.

Equitable distribution of retirement accounts in Florida, including 401(k) accounts, is governed by Florida Statutes 61.075.

To first determine if in fact a particular retirement account is a marital asset, you first have to understand the definition of a marital asset. A marital asset is defined as any asset acquired during the marriage, either individually or in joint names. Although there are other aspects to this definition, this is the primary definition.

Marital assets also include 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.

We can see that retirement accounts, including a 401(k) account, even if it is in the name of one party, it will be considered as a marital asset if all of it or a portion of it was acquired during the marriage.

Giving up any portion of a retirement account that was accumulated during the course of a marriage can be a "difficult pill to swallow." The usual reaction by an individual is that "I worked hard my whole life for that money", and "I'm not going to give up one penny of of it."

You may not necessarily have to give up a portion of the asset, but you most certainly will have to give up 50% of the value, and offset it against other assets.

Psychologically, I know it is difficult to surrender an asset many consider to be very personal. A recent article from a Jamaican Newspaper demonstrates the global aspects of an individual's view of his or her retirement accounts. They will fight to the end to protect what they perceive as their own individual assets.

The age old question, which invariably comes up time and time again. The answer to this question is determined by examining the reason why an engagement ring is given by one party to the other.

An engagement ring is a gift made upon the implied condition that a marriage is to occur. If a marriage does in fact occur, the courts will most likely follow the general rule that engagement rings are not marital assets subject to equitable distribution. Rather, they are the separate property of the recipient.

In the event a marriage does not occur, the chances are much better for recovery of the ring, since it was conditioned upon the subsequent marriage.

An interesting twist to the engagement ring story occurred in the case of Randall v. Randall, 56 So3d 817 (Fla. 2nd DCA 2011). In the Randall case, the judge treated the engagement ring as a family heirloom, and provided that the husband could hold the ring, as long as he delivered the ring to his children as he saw fit.

The wife promptly filed an appeal of this ruling, and she easily prevailed on her appeal. The appellate court followed the general rule that an engagement ring is a gift, in contemplation of marriage, and once that marriage occurs, the ring belongs to the wife.

An engagement ring is simply not subject to equitable distribution, and the trial judge has no jurisdiction over the ring.

We all know that divorce is an extremely difficult time for people to experience. Emotions run high, and often time, all sense of reason and reasonableness vanish during divorce proceedings.

Some people like to amicably resolve their differences, and move on with their lives. Others, however, would prefer to make their soon to be ex-spouse's life a miserable experience for months and years ahead.

Lawyers have an ethical obligation to represent their clients as zealously as possible, within the bonds of the law. Apparently one divorce attorney in New Mexico decided that there were no boundaries under the law, and that he was at liberty to take matters into his own hands in a divorce proceeding. He gives no meaning to zealously representing his client.

Aggressive representation was given a whole new meaning when this attorney took control of his client's affairs. This is not the best way for an attorney to proceed in a divorce case or any other case for that matter.

Check it out! Watch the New Mexico divorce attorney go to work. You will be shocked.

Military retirement benefits are marital assets and subject to equitable distribution. Florida Statute 61.076. The exception is that military retirement benefits that are based on a disability are excluded from equitable distribution. Abernethy v. Fishkin, 699 So2d 235 (Fla 1997).

Disability pension and benefits are not marital assets, and are not subject to equitable distribution. See Hanks v. Hanks, 553 So2d 340 (Fla. 4th DCA 1989). The reason for this is because the benefits are personal to the employee; it represents compensation for injuries or lost wages sustained on the job.

Federal social security benefits are not divisible as marital assets upon a divorce. Johnson v. Johnson, 726 So2d 393 (Fla. 1st DCA 1999). Social security represents social insurance, and it is not considered a property interest under the law.

A portion of workers' compensation benefits and personal injury claims are marital assets. The portion of the award representing past lost wages, loss of earning capacity, and medical expenses is a marital asset. The portion of the award, which represents future lost wages, loss of earning capacity, and future medical expenses is the separate property of the spouse who was injured. See the case of Weisfeld v. Weisfeld, 545 So2d 1341 (Fla. 1989) for a more detailed analysis of this particular subject.

Unvested or contingent options are also marital assets. Florida law is replete with cases on this subject matter. These assets were created by marital labor that are capable of valuation and distribution in the event that monies are realized in the future upon the sale of the options.

Jewelry is clearly a marital asset if acquired during the course of the marriage, and it is therefore subject to equitable distribution.

Placing a value on jewelry is a more difficult question. There is ample case law that sets forth the principle that valuations must be based upon competent evidence. Noone v. Noone, 727 So.2d 972, (Fla. 5th DCA 1998); see also Knecht v. Knecht, 629 So.2d 883 (Fla. 3d DCA 1993).

In Lassett v. Lassett, 768 So.2d 472 (Fla. 2d DCA 2000), the husband tesified that his wife's jewelry was valued at $10,000. There was no other evidence. The trial court stated that this was not competent evidence as to value. His unsupported opinion as to the value of the jewelry is not sufficient to warrant the distribution of that amount to the wife.

The only evidence the wife had as to the value of the husband's jewelry in the Noone case was that apparently he had told her it was worth $10,000 at some point in time. This was not considered competent evidence by the court. Alternatively, the husband valued his own jewelry at $1,500 on his financial affidavit, which the court deemed to be competent evidence.

In every dissolution of marriage action filed in Boca Raton, Fort Lauderdale, or anywhere else throughout the state of Florida, the parties are required to file a financial affidavit which details their income, expenses, assets and liabilities. The importance of filing this document in an accurate manner cannot be over emphasized.

What happens when assets are not disclosed by a party to the divorce proceeding?

In Romero v. Romero, 959 So.2d 333 (Fla. 3DCA 2007), the husband failed to disclose stock options he had received over the course of the marriage, and which the wife was unaware of. They were ultimately discovered by her after the proceedings concluded, and she subsequently tried to reach them through the use of a constructive trust.

The trial court concluded that these options were marital assets because they were awarded to the husband based upon his past qualifications and experience over the course of the marriage.

The wife testified that had she known about them, she would have wanted half; that she would have exercised them; she would have sold them, and would have used the proceeds to reduce the mortgage on her home.

The decision of the trial court, awarding the wife half of the options, was ultimately reversed on appeal. The appellate court ruled that the wife failed to establish the elements of fraud, and "impermissibly stacked inference upon inference, with the full benefit of hindsight, culminating in a final judgment based solely upon speculation."

What makes this case rather interesting is the fact that neither party completed a thorough examination of their assets when they drafted their marital settlement agreement. Given theses circumstances, the court concluded that the husband did not commit any fraud in not disclosing his stock options.

It is important to recognize that a petition to set aside a final judgment in a divorce case cannot be done simply because of non-disclosure on a financial affidavit. There must be more. The moving party must still establish a ground for setting aside the judgment pursuant to Florida Rules of Civil Procedure, Rule 1.540(b)(3).

In other words, a movant must show not just that the affidavit contained a false statement of a material fact, but also that it was fraudulent, i.e., that the person making the false statement knew that it was false, that the false statement was made with the intent that the other party would rely on the false statement, and that the other party actually relied on the false statement and was thereby prejudiced. Ward v. Atl. Sec. Bank, 777 So.2d 1144, 1146 (Fla. 3d DC 2001).

The moral of the story is to exercise due diligence in not only completing your financial affidavit, but to also conduct your own extensive investigation into discovering the nature and extent of all marital assets. For more valuable information regarding this subject or any other subject that you may have an interest in, please click the following link which will take you over to my site, www.alanburtonlaw.com.

In every dissolution of marriage action, marital assets must be identified and valued. The critical question that is in dispute often times becomes as of what date are those assets to be valued?

Section 61.075(6), Florida Statutes (2004), provides a bright line rule for classifying marital assets and liabilities. Absent a valid separation agreement, the cut-off date for classifying marital assets is the date of filing the petition for dissolution of marriage. Schmitz v. Schmitz, 950 So.2d 462, 463 (Fla. 4th DCA 2007).

Often times, it is a much easier task to identify those assets which are marital, then it is to value them. The case of Odak v. Vitrano, 35 Fla. L. Weekly D1957a (2010) is instructive on this point.

Another point of contention in this case involved the severance payment received by the husband. That payment was substantial. However, since the right to receive the payment did not come into existence until after the date the petition for dissolution of marriage was filed, the court had properly classified the severance payment as a non marital asset.

In this case the husband was an expert in "turning around" troubled companies. He was hired by Wild Oats Markets, Inc. as its president and chief operating officer for a number of years. He had received stock options from the company which he exercised during the marriage. The trial court chose to value those assets as of the date of the trial, as opposed to the date of filing the petition for dissolution of marriage.

The stock that the husband received apparently grew in value by a considerable amount between the date of filing the petition for dissolution of marriage annd the date of trial. The husband had argued that the increase in the value of the stock was occasioned by his post petition efforts to make the company more efficient and profitable, and therefore the proper valuation date should have been the date of filing the petition for dissolution of marriage, rather than the date of trial. It would have been unfair for the wife to benefit from his efforts made after the date of filing.

Although his arguument was very logical, the court sided with the wife with this issue, since there was conflicting evidence presented at trial as to what exactly was the cause of the stock rising in value. The trial court is afforded a wide latitude of discretion, and unless that discretion is abused, the decision cannot be reverersed on appeal.

Generally speaking, the answer is no. Settlements from personal injuries are the separate property of the injured person. A portion of an award, if itemized to cover lost wages, or if awarded for loss of consortium, may be considered as a marital asset. Rarely is a settlement itemized, breaking down how the total was derived. See Mazzorana v. Mazzorana, 703 So. 2d 1187, 1189 (Fla. 3d DCA 1997).

When a personal injury settlement is commingled with other funds which are marital, or which are placed into a joint account, the situation becomes much more challenging for a trial judge. This was the very situation which presented itself in the case of Valentine v. Van Sickle, 35 Fla. L. Weekly D1663a, 2d DCA 2010.

In the Valentine case, when the husband was out of town, the wife created a new joint account and deposited the personal injury settlement check into the joint account. A portion of the funds were used to pay marital debts. At some point down the road, the wife transferred all of the money into a bank account in her own name.
The trial judge apparently felt that because the award was deposited into a joint account, and were utilized, at least in part to pay marital debt, that the funds became a marital asset.

The appellate court, upon further review, determined that the trial court had applied an incorrect legal standard when deciding if the award was marital or not. The fact that funds are deposited into a joint account does not necessarily convert separate property into a marital asset. The court needs to "dig a bit deeper" and find out exactly why the funds were placed into a joint account. If the other party's name was on the account, the funds may have been placed in the particular account for convenience only, and the funds would not lose their separate character. Grieco v. Grieco, 917 So. 2d 1052 (Fla. 2d DCA 2006.

Extreme caution must be exercised when one receives funds which could be considered as separate property, and they become commingled. There is a high risk of those funds losing their separate character, so exercise caution.

More often than not, a divorce requires one to re-group and to start fresh. Usually, starting over is on a scaled down, reduced standard of living. No so with Tiger Woods.

In spite of the massive financial settlement he recently paid to his wife Elin Nordegren, which was reported to be in excess of $100million, he appears to have come out of his divorce unscathed, at least as to his finances.

South Florida Boca Raton attorney Alan R. Burton knows how a divorce can negatively impact the lives of individuals, especially when they were involved in long term marriages. It is generally more difficult for a family to maintain the same standard of living, when living apart, then when they were living together.

Tiger Woods has apparently been unaffected by this principle. He is nearing completion of his $50million mansion, with its own sports facilities, a golf course, what else?

Tiger Woods has become one of the wealthiest sportsmen of all time, earning in excess of $105million last year alone, as reported by Forbes magazine.

Although he apparently has unlimited wealth, that wealth alone did not bring him happiness in his marriage. The Tiger Woods saga adequately demonstrates the old adage that "money can't buy happiness".

Source: Daily Mail Reporter, September 6, 2010

This question frequently arises in the context of a subsequently filed bankruptcy proceeding. Generally, the obligor, or person who is obliged to make the lump sum alimony payment, seeks to have the payment or payments discharged through a bankruptcy proceeding.

The resolution of these types of situations is of course dependent upon the intent of the parties. The intent is ascertained by examining the language used in the parties agreement. Although the language used in an agreement is not conclusive, the words are given weight in determining the intent of the parties. Howell v. Howell, 207 So.2d 507 (Fla. 2d DCA 1968); Woodworth v. Woodworth, 385 So2d 1024 (Fla. 4th DCA 1980).

If the court ultimately determines that an obligation, which is labeled as alimony in an agreement, is in fact alimony, the alimony, which is lump sum, payable in installments, is is a vested right and not subject to modification. Such a determination would preclude the obligation from being discharged in bankruptcy, and would further subject the obligor to the contempt powers of the court if the obligation is not paid. Zuccarello v. Zuccarello, 429 So.2d 68 (Fla. 3d DCA 1983); McCombes v. McCombes, 440 So.2d 683 (Fla. 1st DCA 1983).

However, if the parties to an agreement had agreed that payments required under an agreement were for settlement of property rights, and not intended as alimony, those payments could not be enforceable by contempt, and would therefore be dischargeable in bankruptcy. Pabian v. Pabian, 480 So.2d 237 (Fla. 4th DCA 1985).

The contempt powers of the court simply cannot be used to punish someone for contempt, when the payments required from that individual are not support related. In Veiga v. State of Florida, 561 So.2d 1335, (15 Fla. L. Weekly D1487), the husband was found in criminal contempt for failing to pay his wife $25,000.00 as "lump sum alimony for purposes of equitable division of the interest in his business." Having determined that the obligation was for property settlement issues, rather than support, the contempt order was reversed. The payment then becomes a dischargeable obligation in bankruptcy.

It is very clear from the cases that emanate from Boca Raton, Palm Beach County, South Florida as well as throughout the state of Florida, that the only remedies for non payment of property obligations are those that are available to creditors against debtors. Underwood v. Underwood, 64 So.2d 281 (Fla. 1953); Hine v. Hine, 558 So.2d 496 (Fla. 3d DCA 1990); Carlin v. Carlin, 310 So.2d 403 (Fla. 4th DCA 1975); and Howell v. Howell, 207 So.2d 507 (Fla. 2d DCA 1968).

In conclusion, the lump sum alimony payments will only be dischargeable if the intent was to treat those payments as property rights versus a true alimony obligation. Extreme caution must be exercised in drafting any agreements so as to establish clearly the true intent of the partes.

Equitable Distribution of marital assets is governed by the provisions of Florida Statute 61.075(1). That section provides that, in distributing marital assets and liabilities, a 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...."

What factors then, would entitle the court to deviate from an equal distribution, and award one party more than the other?

When one spouse engages in conduct which results in the dissipation of marital assets, the court is warranted in making an unequal distribution. Hood v. Hood, Case No. 5D09-593, decided on July 30, 2010. Dissipation has been defined in the domestic relations context as "where one spouse uses marital funds for his or her own benefit and for a purpose unrelated to the marriage at a time when the marriage is undergoing an irreconcilable breakdown."

Adultery can be considered as a factor when the court is fashioning an unequal distribution of the marital assets and liabilities of the parties, to the extent that marital misconduct depleted marital resources. As an example, the wife, in the case of Rabbath v. Farid, 1st District, Case No. 1D07-6583 had alleged in her petition that her husband had dissipated over $383,551.00 in marital funds while engaging in an extra-marital relationship.

The husband gave evasive answers and failed to adequately account for his various banking records. A combination of the husband's evasive answers and other competent evidence presented by other witnesses justified the court in making an unequal distribution of marital assets.

Other cases make it very clear that when a party contributes and commingles substantial non- marital assets to the relationship, that factor alone is not a basis for an unequal division of marital assets. In Hitchcock v. Hitchcock, 4th District, Case Nos. 4D06-4743 & 07-1049, decided on October 22, 2008, the court made just such a finding. A presumptive gift occurs when non-marital assets are commingled with other marital assets.