Articles Posted in Marital assets

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News stories about the complicated divorce proceedings of high-powered couples are nothing out of the ordinary in Florida. In many cases, the main complicating factor is the couple’s wealth.  It is not simple to divide a couple’s assets when they own many millions of dollars of property together. In the divorce of Alan Grayson (D-FL), a former member of the United States House of Representatives, from his ex-wife Lolita, division of property ended up being the least of the complicating factors in the case. In 2015, their marriage ended by annulment, not by divorce.

The Marriage(s) of Alan and Lolita Grayson

Alan Grayson and Lolita Carson married in 1986; it was a second marriage for both. The couple went on to have five children together. In 1990, Lolita Grayson applied for United States citizenship, and Alan Grayson saw her citizenship application before she submitted it. On the application, she listed her marital status as “separated.” More than 20 years later, during the couple’s divorce proceedings, it was revealed that Lolita was still legally married to her first husband at the time that she married Alan Grayson. In 2015, a judge annulled their marriage, declaring it void because of bigamy. In other words, the court declared that the couple had never been legally married because Lolita was legally married to someone else when she and Alan Grayson married each other.

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The question frequently arises in a divorce case as to whether or not an inheritance is a marital asset or non-marital asset.  The Florida equitable distribution statute which deals with the distribution of assets, both marital and nonmarital, clearly sets forth that assets acquired separately by either party by non interspousal gift, bequest, devise, or descent, and any asset acquired in exchange for such assets, are non-marital.  See Florida Statute 61.075(6)(b)2.

The initial determination as to whether an asset received as an inheritance is marital or nonmarital is rather straightforward.  The issue can become more complex as the years go on in a marriage, and the separate nature of the inheritance becomes clouded.

In order for an asset to maintain its separate, non-marital status, it is very important not to commingle marital assets with non-marital assets.  Therefore, in order to preserve the integrity of the inheritance being a non-marital asset, the inherited funds should be maintained in a separate bank account, in your own name, and you should never, ever deposit or commingle marital funds into your separate account.

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Equitable distribution of marital assets comes in many forms.  One such form is the enhanced equity that one party obtains when his non-marital mortgage is paid down during the course of the marriage with marital funds.  Support for this proposition is found under Florida Statute 61.075(6)(a)(1)(b).

In the case of Somasca v Somasca, 171 So3rd 780 (Florida 2nd DCA 2015), the former husband owned commercial real property encumbered by a mortgage.  A substantial portion of the mortgage was paid down during the marriage by utilizing marital funds obtained when the wife refinanced the marital residence.  The wife was claiming 50% of the amount of the mortgage reduction as a marital asset and as a portion of her equitable distribution.

The husband responded by claiming that his separate property depreciated substantially in value during the marriage, which essentially “washed out” or canceled any claims that the wife was making in reference to a pay down of his non marital mortgage.

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In a dissolution of marriage action, the court is required to identify all the marital assets and to establish the value for those marital assets.

Stock is just one example of what might be considered a marital asset in a divorce case.  Stocks which are traded routinely on an exchange have a value that is easily determined.  What do you do however when you are dealing with stock in a privately held company, or stocks commonly referred to as penny stocks?  How do you go to go about valuing these types of stocks?

Bring your valuation experts to court, and present their full testimony.  For certain, a trial judge should not make a finding of value until all the evidence has been presented to the court regarding valuation.  Additionally, if both parties to the proceeding offer evidence of differing valuations, it is not appropriate for a court to take an average of the two conflicting valuations in order to assign a value to the stock.

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A trial court in a divorce proceeding lacks the legal authority to order the sale of jointly owned real property, unless there was a specific pleading asking for partition of the real property.

Partition is a request that is made by one of the parties to sell jointly owned real property.  The court in the case of Martinez v. Martinez, 573 So.2d 37 (Fla. 1st DCA 1990) specifically held that a court has no authority to partition or order the sale of  jointly held real property in the absence of an agreement between the parties or a specific pleading filed in the case requesting partition.

The court does, however, have the right to award a 100% interest in a parcel of real property to one party or the other in a dissolution of marriage case, as part of the equitable distribution ordered by the court, as provided under Florida Statute 61.075.

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It is understandable that some spouses who are divorcing are not necessarily in the mindset to cooperate with one another. After all, fighting and disagreements have likely played a role in the decision to end their marriage. However, refusal to come to an agreement regarding one or more issues in a divorce can cause serious delays and can increase the cost of a divorce.

Before a court will grant your divorce, you and your spouse must settle numerous issues including:

  • Property and debt division;
  • Child support;
  • Time-sharing and visitation;
  • Parenting plans;
  • Alimony.

If any one of those issues cannot be settled out of court, the divorce can be delayed as the court will have to decide for you. You and your spouse will have to present evidence to support your arguments for how you want to resolve the issue at trial and the judge will rule on the matter.

A recent divorce case demonstrates just how much a divorce case can be affected by adversarial disputes instead of cooperation. After 25 years of marriage, the wife of the founder of Cancer Treatment Centers for America filed for divorce. The filing occurred in 2009 and the case is still dragging on due to several disagreements regarding a prenuptial agreement, custody, and division of their millions of dollars in assets. The case has involved numerous hearings, appellate hearings, changes of lawyers, contempt orders, and other complications, and is now finally going to trial over asset and property division. In the meantime, both spouses have likely spent an enormous amount of money, stress, and time dealing with the divorce proceedings and have been unable to remarry since their marriage is not yet dissolved after more than six years. Continue reading

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When two people get married, it often makes sense to combine finances. Spouses open joint bank accounts and combine their incomes to help each other pay off debts–both pre-existing debts and new ones acquired during the marriage. In many situations, spouses may depend on one another to be able to cover their monthly bills. This can all lead to a messy situation if the spouses decide to get divorced.

During a divorce, Florida law requires the fair and equitable division of all jointly-owned property and this law applies to debts, as well. However, dividing up debts can be complex, especially if some debts are owned individually and others jointly. The name on the debt does not always mean that person will be solely responsible for the payments, however, and it is important to discuss debt division with an experienced divorce attorney who understands the relevant law. The following is some brief information regarding the division of certain debts in divorce:

Student Loans

Student loans are often individual debts unless the spouses cosigned on the loans or the loans were acquired during the marriage. In such cases, the loans would be considered marital debt and you may be held responsible for sharing the payment unless you and your spouse can agree otherwise. However, even if you agree that your spouse will be responsible for the loans, your name will likely remain on the loans and any failure to repay could affect your credit. Continue reading

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Many people have heard of the term “common law marriage” and may use it to describe couples who have lived together for many years. Couples may consider themselves to be basically married or in a common law marriage if they have been together for a long time but simply never tied the knot. However, Florida law does not afford the same marital rights to couples unless they have legally married, no matter how long they have been together. This can cause serious complications should the couple decide to get “divorced.”

States laws can vary and some states recognize common law marriages, meaning a couple will have marital rights if they consider themselves to be husband and wife for a certain period of time. Florida law, however, specifically states that any common law marriages that started after January 1, 1968 are void and invalid. In some cases, Florida courts may recognize common law marriages that started in another state if that allows common law marriage, though no couple can enter into one of these marriages within the state and have it be recognized as a legal union.

Property Rights for Unmarried Couples

No matter how long you are together, if you did not get a marriage license and have a legal ceremony, you are not afforded the same rights to equitable division of property under the law as married couples. This can cause disputes for couples who have been together a long time and have comingled their property or have purchased real estate together. Similarly, debts will not be equitably divided either and each partner will generally be held liable for debts in their name. Continue reading

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Dividing money and property in a divorce can always be complex. However, the process can become more complicated if one or both spouses have retirement accounts. Like any other assets, investments, or property, the state of Florida requires equitable distribution of the retirement accounts between the spouses. The process of dividing retirement accounts can require additional paperwork, calculations, and more, so it is important to have an attorney on your side who understands how to negotiate for the fairest division of these accounts in accordance with Florida law.

One important tool in dividing rights to retirement accounts is the Qualified Domestic Relations Order, commonly called the QDRO. When a person owns a retirement account, he or she will likely initially be the only payee who will receive the proceeds of that account. However, retirement funds saved and invested during a marriage are considered to be marital property, even if the funds only came as a result of the job of one spouse. In the event of a divorce, one spouse may obtain the rights to also be an alternate payee for the retirement account.

However, certain plans such as those under the Employee Retirement Income Security Act (ERISA) will not simply pay the funds to an alternate payee without the appropriate paperwork. In such situations, a QDRO is needed to ensure the divided funds go to the former spouse or other dependent. Continue reading

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Celebrity divorces can be difficult, not only because of extensive media coverage but also because one or both of the spouses may have a significant amount of wealth. In one recent divorce, a wife is attempting to obtain a large portion of her husband’s $85 million fortune as well as a large amount of additional ongoing support.

The wife of songwriter, singer, and successful music producer Timbaland filed for divorce at the end of June. She previously filed in 2013 though that case was dismissed as they attempted to reconcile. Apparently that attempt at reconciliation was not successful, as now she has not only filed again but requested many different types of financial support, including the following:

  • Child support for both their biological daughter and her son from a prior relationship