Recently in Non marital property Category

March 26, 2012

Are engagement rings marital property and subject to equitable distribution?

698266_rings.jpgThe 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.

December 27, 2010

The importance of the valuation date in dissolution of marriage actions

desktop stock screen board.jpgIn 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.

September 20, 2010

Are personal injury settlements marital assets?

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.
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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.