Articles Tagged with division of property

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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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Florida’s laws are quite clear about the fact that all assets acquired and liabilities incurred during the marriage should be considered marital property. Since Florida is an equitable distribution state, Florida divorce courts divide marital property according to the needs of each spouse. It is rare for a judge to classify an asset or liability taken on during the marriage as non-marital property. In the Mills v. Mills case, the former wife successfully convinced the appeals judge to re-classify a home equity loan as a non-marital liability, on the grounds that her then-husband had forged her signature on the loan documents.

Details of the Mills v. Mills Case

During the 37 years that he was married to his wife Brenda, Barry Mills entered into a number of investments, many of which turned out to be profitable. In 2007, Barry and several other investors attempted to form a startup bank. In order to cover his share of the startup capital, Barry took out a home equity loan in the amount of $100,000 dollars; as per the terms of the loan agreement, he pledged the couple’s house as collateral to secure the loan. Certain that Brenda would refuse to sign for the home equity loan, and knowing that he would not have sufficient funds to participate in the startup bank project without the loan, Barry signed Brenda’s name on the loan documents without her knowledge. When the startup bank applied for a state charter, the state refused to issue one, meaning that Barry lost his investment, which totaled more than $245,000. When the lenders required the Mills family to repay the loan, they repaid it using money from Barry’s retirement funds.

When the couple divorced, the trial court classified the loss resulting from the startup bank project as a non-marital liability. The court’s reasoning was that, except in cases of misconduct, all assets and liabilities taken on during the marriage count as marital property. Brenda appealed the decision, arguing that a forged signature qualifies as misconduct.  Barry did not deny forging Brenda’s signature on the loan documents. The appeals court sided with Brenda and re-classified the loss as a non-marital liability. Continue reading

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The longer a couple has been married, and the more assets they have, the more complicated the case tends to be if they divorce. Perhaps the most bitter divorce battles center around the physical custody of minor children and the right to make decisions related to their upbringing. When a couple does not have minor children, the biggest disagreements usually have to do with the division of property. Florida courts have clear rules about what is marital property and what is non-marital property, but there is still room for complicated situations to arise in which each spouse can make a claim to a certain asset. For example, if one spouse earned a lot more money than the other during the marriage, how should that money be divided? If one spouse used the couple’s money irresponsibly, how does that affect the court’s decision about how to divide the property?

Florida’s Equitable Distribution Doctrine

Florida courts divide divorcing couples’ property according to the principle of equitable distribution. In other words, they go by what is fair. They do not always divide marital property evenly, and they do not simply take into account how much income each spouse brought in and then let each spouse keep only the money he or she earned. Florida law also considers unpaid contributions to the marriage as reasons a person is entitled to a certain share of the marital property. For example, time spent as a stay-at-home parent also counts as a contribution. The logic is that, when taking care of the children full time, the stay-at-home parent spouse was freeing up the other spouse to concentrate more on earning money.

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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