florida equitable distribution | Artemis Family Law Group PLLC

When Is an Unequal Distribution Available in a Divorce?

February 21, 2024 by Paul Shafranski

The Factors

Equitable Distribution is premised on the starting point that equal is equitable. (See prior post, “How Is Property Divided In A Florida Divorce?”) In other words, Florida statutes specifically instruct the trial courts to begin analyzing equitable distribution with “with the premise that the distribution should be equal”; however, that same statute permits the courts to provide for an unequal distribution of assets and liabilities based upon certain enumerated factors:

The contribution to the marriage by each spouse, including contributions to the care and education of the children and services as homemaker;
The economic circumstances of the parties;
The duration of the marriage;
Any interruption of personal careers or educational opportunities of either party;
The contribution of one spouse to the personal career or educational opportunity of the other spouse;
The desirability of retaining any asset, including an interest in a business, corporation, or professional practice, intact and free from any claim or interference by the other party;
The contribution of each spouse to the acquisition, enhancement, and production of income or the improvement of, or the incurring of liabilities to, both the marital assets and the nonmarital assets of the parties;
The desirability of retaining the marital home as a residence for any dependent child of the marriage, or any other party, when it would be equitable to do so, it is in the best interest of the child or that party, and it is financially feasible for the parties to maintain the residence until the child is emancipated or until exclusive possession is otherwise terminated by a court of competent jurisdiction. In making this determination, the court shall first determine if it would be in the best interest of the dependent child to remain in the marital home; and, if not, whether other equities would be served by giving any other party exclusive use and possession of the marital home;
The intentional dissipation, waste, depletion, or destruction of marital assets after the filing of the petition or within 2 years prior to the filing of the petition;
Any other factors necessary to do equity and justice between the parties.

These factors seem to encompass practically any circumstance, especially when the final catch-all factor is thrown into the mix. Fortunately, The Florida Bar Journal recently published a helpful article which discusses this subject in great detail, with an interesting report on the history of the law leading to where we are now, “Is An Unequal Equitable Distribution Equitable?” While there are plenty of circumstances in which an unequal distribution may be appropriate, it remains the exclusion to the rule of equal distribution. It must be emphasized that the circumstances leading to an unequal distribution are incredibly fact-specific and no one scenario is “guaranteed” to result in an unequal distribution.

Equitable Distribution and Spousal Support Are Different Pieces of the Divorce Pie

Divorce Pie has multiple slices, including Equitable Distribution and Alimony (along with Child Support and Parenting Issues and more).

Many of the equitable distribution factors overlap with the factors that go into a determination of alimony. Alimony is based on one spouse’s need and the other spouse’s ability to pay, after which various factors are analyzed to figure out what kind of alimony is appropriate, what amount, and for how long. Unlike in the alimony context, the courts are instructed by the law to begin with the premise that equitable distribution of the marital assets and liabilities should be equal. This means that if you are seeking an unequal distribution of assets or liabilities, you will have to overcome with mandated starting point and presumption against an unequal distribution. While only certain kinds of alimony are available for marriages of a certain length, there is no presumption against alimony as a concept in the statutes; instead, it is a mathematical determination of needs and ability to pay.

Furthermore, if you are seeking alimony and an unequal distribution, understand that they exist within the same context, meaning if you are successful in your alimony claim, you are less likely to succeed in your request for unequal distribution, just as if you are successful in your request for an unequal distribution, you are less likely to receive alimony or there is a good chance you will be awarded less alimony. It would be rare, but not unheard of, to receive alimony and an unequal distribution, particularly if they are both based on the same or similar factors. But it cannot be emphasized enough that each case is unique, as are its circumstances. A particularly compelling case for unequal distribution may also be similarly compelling in the alimony context.

Evidentiary Standard: It’s Not Enough to Merely Make a Claim

When making a final decision regarding equitable distribution, Florida statutes instruct the court as follows: “any distribution of marital assets or marital liabilities shall be supported by factual findings in the judgment or order based on competent substantial evidence with reference to the factors enumerated [above].” This means that the court must make written findings of fact in the final judgment and those findings of fact must be based on competent substantial evidence which relate directly to the equitable distribution factors listed above. Thus, any equitable distribution decision, including one that is unequal, must be based on competent substantial evidence. This means more than just a claim that something happened. There must be actual, admissible evidence presented to the trial court to justify a decision. Failure of the trial court to include these findings of fact in the final judgment is reversible error on its face.

Equitable distribution starts off on a pretty straightforward presumption that everything will be split equally when all is said and done. While the process of identifying and valuing all marital assets and liabilities can be an arduous one, it is typically somewhat predictable, especially to seasoned family law attorneys. However, the strength of a claim for unequal distribution is much more complicated than simply reading the relevant statutes and factors. Only an attorney who understands the plethora of case law discussing various scenarios over the decades in Florida, like at Artemis Family Law Group, can accurately gauge whether a claim for unequal distribution should be attempted or if legal efforts and fees should be directed toward a different direction that has a better chance of success. When you are ready to discuss your options, please schedule a consultation with our office today.

How Is Property Divided In A Florida Divorce?

January 24, 2024 by Paul Shafranski

This is one of the most important questions in a divorce. While a marriage, and its undoing, can be fraught with complex and difficult emotions, the legal process of a divorce mostly comes down to who gets what and how to handle parenting issues. The first question, who gets what, is decided through the process known as “equitable distribution.”

What Is Equitable Distribution?

Equitable Distribution is the process by which all of the marital assets and liabilities, also known as all of the marital stuff you’ve accumulated over the years and all of the marital debt that is left, is distributed to both spouses. The concept comes from section 61.075 of the Florida Statutes, which outlines the entire process. The first step in determining equitable distribution is determining what is a marital asset/liability and what is a nonmarital asset/liability.

Marital vs. Nonmarital Assets and Liabilities

The simple rule is that assets that were obtained before a marriage are nonmarital, meaning they belong to one of the spouses individually and independent of the marital bonds, and the same goes for debts that were incurred before a marriage. For example, if you purchased an antique sports car before the marriage, that is presumed to be nonmarital and not part of the equitable distribution process. Similarly, student loans that you took out before you got married are presumed to be nonmarital and will remain your sole responsibility after the divorce.

The same analysis applies when determining whether something is a marital asset. If that antique sports car was purchased three months into your marriage, it is presumed to be a marital asset. If you took out student loans three months into your marriage that is presumed to be marital debt.

That’s the quick and easy way to determine what are marital assets and liabilities and what are nonmarital assets and liabilities. However, like many things in the law, it is never really that easy.

Common Issues in Equitable Distribution

Equitable Distribution can be complicated by a number of circumstances that families regularly encounter. While these are exceptions to the rules, they are not uncommon.

Valuation

One of the trickiest issues in Equitable Distribution is determining the value of certain assets. How much is your home worth? Are you having the home appraised? Do you and your spouse agree to the appraiser or will you each have your own appraisal performed? Are you using an online listing option, such as Zillow, to get a feeling for what your house could be worth? Or are you both simply agreeing to a value? The answer to these questions will directly impact what number gets placed in the Equitable Distribution Spreadsheet (see below). If you have a family business, it can be very tricky to determine the appropriate value of the business for Equitable Distribution purposes.

Pensions and Retirement Accounts

Another problematic area is with pensions and retirement accounts. It is very common for a spouse to come into a marriage with an existing retirement account that was established pre-marriage, which they then continue to contribute to after the marriage has begun. The pre-marital contributions, and interest derived therefrom, would be nonmarital, while any contributions and interest on those contributions after getting marriage would be considered a marital asset. Calculating the nonmarital portion of the retirement account and any interest derived from those pre-marital contributions can be complicated and requires expertise to determine.

Pensions can be even more difficult to calculate because of the nature of how they pay out. There is usually not a value that a pension can be traded in for until the time comes for one to retire. Pensions will state a current payout amount based on projections, anticipated age of retirement, and other factors. Even more complicated, if the pension was started before the marriage and continued throughout the marriage, it can be very difficult to find the precise nonmarital and marital values of the pension for Equitable Distribution purposes.

Active vs. Passive Appreciation

Another difficult area that can complicate Equitable Distribution is determining whether the increase in value of a nonmarital asset is due to active or passive appreciation. Generally speaking, if a nonmarital asset appreciates in value during the marriage due to the active efforts of one or both spouses, that increase in value is considered “active” appreciation and is likely considered a marital asset subject to Equitable Distribution. If, however, a nonmarital asset increased in value due to market forces, inflation, or other methods that neither spouse had any active involvement in, that increase in value is considered to stay nonmarital and not subject to Equitable Distribution. This is common in real property and in investment accounts in which one or both spouses spent considerable efforts during the marriage to manage the investments.

Inheritances

Inheritances are a big exception to the ordinary marital vs. nonmarital rules. Generally, if a spouse receives an inheritance or a gift that is not from the other spouse, that is considered nonmarital. Also nonmarital are any assets exchanged for such nonmarital assets. In other words, if you spend your inheritance while married on a yacht, that yacht is likely nonmarital even though it was purchased during the marriage. However, if an inheritance or gift is comingled with marital assets, they can lose their nonmarital nature. Thus it is very important if you receive an inheritance or non-spousal gift during the marriage and you would at least like the option to keep it nonmarital, to be careful how it is stored and what you do with it.

Equitable Distribution, Not Necessarily “Equal”

It is important to note that the term we use for the distribution of marital assets and liabilities is “Equitable” Distribution, not “Equal” Distribution. While the courts are instructed to start the process “with the premise that the distribution should be equal,” the court is also permitted to perform an unequal distribution of assets based on certain enumerated factors, which we will discuss in another post.

Gathering Information

Typically, the longer a marriage, the more assets and liabilities a couple has accumulated. It can be a very overwhelming process to gather all of this information into one place. How does one organize all of this financial information? A good place to start is an Equitable Distribution Spreadsheet. The Ninth Circuit in Central Florida has a helpful Equitable Distribution Spreadsheet which one can use to input all information about a couple’s marital assets and liabilities. If you are in litigation, your lawyer should prepare this form for you based on the information you and your spouse provide. While one would think financial information is cut and dry and the answers clear, it is not uncommon for both attorneys to have differences in their Equitable Distribution Spreadsheets (usually regarding whether an asset or liability is marital or nonmarital or the value of an asset or liability). If you are pursuing a collaborative divorce, the financial neutral will gather all of your financial information into their own Equitable Distribution Spreadsheet for the team to analyze and build options with together. In the collaborative process, this spreadsheet is a joint document that both spouses and their team members work together to create and ensure it is accurate.

Equitable Distribution, along with parenting issues, makes up the vast majority of issues to figure out during a divorce. It can be very helpful to talk to a lawyer about this process to figure out what, if any, issues might arise during the Equitable Distribution process and how to resolve them efficiently and fairly. Please schedule a consultation with our office today to discuss these and any other questions you might have. We look forward to hearing from you.

Navigating Divorce with P.E.A.C.E.: A Comprehensive Guide to Methodical Resolution

November 14, 2023 by Paul Shafranski

Introduction:

Embarking on the journey of divorce necessitates a comprehensive understanding of the many issues involved. Family law attorneys often use a structured approach encapsulated in the PEACE acronym, wherein each letter represents a critical aspect of a divorce in a specific order: Parenting Issues, Equitable Distribution, Alimony, Child Support, and Everything Else. In this thorough exploration, we will delve into each component of the PEACE acronym, explaining why addressing these issues in a specific order is not only mathematically sound but also immensely beneficial for organizing your thoughts during the overwhelming divorce process.

Parenting Issues:

At the epicenter of any divorce lies the pivotal matter of parenting, a facet that extends far beyond legal agreements. Addressing parenting issues early in the process is not merely advisable; it is integral. This phase involves determining time-sharing arrangements (formerly known as “custody”), constructing a comprehensive time-sharing schedule, and making decisions that profoundly impact the child’s education and healthcare. By dedicating time to resolve parenting matters first, a foundational structure is laid for other aspects of the divorce. Decisions made in this phase have a cascading effect, influencing child support calculations and impacting equitable distribution. Furthermore, an early focus on parenting fosters cooperative co-parenting, contributing significantly to a healthier environment for the children involved. Finally, children should come first in any divorce, so deciding issues related to parenting first just makes good sense. It also ensures that the time-sharing schedule, which should be based on what it in the best interests of the children, is not being impacted by financial decisions in Equitable Distribution or Alimony.

Equitable Distribution:

Equitable Distribution, the next step in the PEACE acronym, involves the fair division of marital assets and liabilities. This stage necessitates a meticulous examination of financial contributions to the marriage, essentially everything that a couple owes and owns. Addressing equitable distribution after parenting issues enables a more accurate assessment of the financial needs of both parties, especially when considering the financial responsibilities associated with raising children. The process may involve appraising property, evaluating complicated financial documents, and negotiating a fair division of assets. This systematic approach ensures that financial considerations align with the responsibilities outlined in the parenting plan, fostering transparency and fairness.

Alimony:

Alimony, or spousal support, emerges as a critical aspect after addressing parenting and equitable distribution. This phase seeks to ensure a more accurate assessment of each party’s financial situation, acknowledging the complexities that arise after the dissolution of a marriage. The decisions made regarding alimony can significantly impact child support calculations, emphasizing the need to tackle this issue in a systematic order. Factors such as the duration of the marriage, the financial needs of each party, and the standard of living during the marriage are considered when analyzing alimony. This careful consideration plays a pivotal role in crafting a fair and sustainable financial arrangement for both spouses post-divorce.

Child Support:

Child support, a cornerstone in divorce proceedings, ensures that the financial needs of the children are met post-divorce. Addressing parenting, equitable distribution, and alimony before delving into child support calculations enhances accuracy and avoids potential complications. Child support calculations involve considering each parent’s income, the number of children, and specific expenses related to the children’s well-being, as well as the specific time-sharing schedule that the parents have agreed to use. A thoughtful approach to child support ensures that the financial responsibilities align with the parenting arrangements established earlier in the process. This systematic progression, guided by the PEACE acronym, not only streamlines the divorce process but also safeguards the best interests of the children involved.

Everything Else:

The final stage in the PEACE acronym encompasses addressing any remaining issues that were not covered in the preceding steps. This includes the division of personal property, considerations regarding adult children, and the finalization of the legal details of the divorce. By saving these miscellaneous issues for the final phase, individuals can focus on the core aspects of the divorce first, making the entire process feel more manageable. This deliberate approach allows for a comprehensive resolution, ensuring that no important details are overlooked in the rush to conclude the divorce process. Addressing everything else after resolving the core issues also provides a smoother transition into post-divorce life for both parties, fostering a sense of closure and allowing individuals to embark on their new chapter with clarity.

Conclusion:

In conclusion, the PEACE acronym stands as a guiding beacon, providing a structured and logical approach to navigating the complicated landscape of divorce. By systematically addressing Parenting Issues, Equitable Distribution, Alimony, Child Support, and Everything Else in a specific order, individuals not only follow a mathematically sound progression but also gain a profound sense of organization and control over the myriad decisions involved in divorce. This methodical approach reflects a commitment to guiding clients through the divorce process with empathy and efficiency, ultimately paving the way for a more peaceful and sustainable post-divorce life. As individuals traverse this challenging terrain, the PEACE acronym serves as a roadmap, facilitating a comprehensive and thoughtful resolution for all parties involved. When you are ready to discuss the divorce process, please schedule a consultation today.