Marital and Non-Marital Property

Rental Property

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IN FLORIDA DIVORCE CASES, the court is required to make an equitable distribution of marital property. Florida is not a “community property state.” In community property states, like California, the courts are required to distribute marital property equally. In equitable distribution states, like Florida, marital property distribution may or may not be equal, but must be equitable (fair).

Further, the court is required to distinguish between marital and non-marital property, as non-marital property is not required to be distributed between the parties. Generally, marital property includes all assets and liabilities that has been acquired during the marriage and/or property that has been used for the benefit of the marriage and the married parties, like a house, bank accounts, retirement accounts and any personal property (like household furniture, for instance). The property need not be jointly titled to be considered marital property, and putting the property in only one person’s name, does not make it non-marital property.

Non-marital property could be property acquired by one of the parties before the marriage or, perhaps property inherited by, or gifted to, one of the parties during the marriage. It also could be property the parties agree (in writing) to keep separate. However, for property to remain classified as “non-marital” it must not have been commingled (mixed) with marital property at any time.

For example, commingling may occur when one of the parties purchases a house before the parties are married, and then, after the parties are married, the purchasing party rents the house out, but then takes those rents and uses them for the benefit of the marriage, perhaps to pay household expenses where the couple resides or to pay off marital debt. Another example could be that, during the marriage, one party inherits property from another person, perhaps a parent. If the person keeps that property entirely separate from marital assets, then the property may be considered non-marital upon divorce. However, if the inheriting party commingles the assets, perhaps by putting inheritance funds into a bank account he or she owns jointly with his or her spouse, or by using the funds to pay marital obligations, then, under Florida law, the inheriting spouse is considered to have “gifted” a share of those assets to the non-inheriting spouse.

What many people do not realize is that the increase in value of non-marital assets during the marriage by use of marital funds or other marital contribution could cause the non-marital property to lose its special status. So, using our rental house example, again, let’s say martial funds are used to remodel the house, or even just maintain it to keep it in habitable condition, then the property may be considered by the court to have been converted from a non-marital to marital asset. Likewise, if the spouse who previously did not have claim to the non-martial property has devoted considerable time and resources to enhancement of the property, it may have the effect of converting the property to a marital asset.

The burden of proof in proving an asset (or liability) is marital rests on the spouse who desires to change the status.

When determining equitable distribution of martial property, Florida courts start with a presumption that the property will be equally distributed, but may consider many factors to ensure equitable distribution. These could include:

1. The length of the marriage.

2. The economic circumstances of each spouse.

3. Who plans to live in the marital home, particularly if minor children are involved.

4. Each spouse’s contribution to the marriage, such as income, carrying for the children and/or the home, etc.

5. Whether one spouse contributed to the education of the other spouse.

6. The debts and liabilities of the parties (including whether there was reckless spending or marital waste by either of the parties).

7. Whether one of the parties delayed or halted his or her career for the purpose of caring for children of the marriage.

8. The difficulty of dividing assets (for example, a family business largely run by one party or the other).

Parties may choose, through written agreement, such as pre-nuptial or post-nuptial agreement to divide property any way they choose. However, the court has an obligation to ascertain whether assets and liabilities are actually distributed as agreed. Ultimately, the court may even make a judgment as to the validity of the agreement, if challenged.

Distribution of property in a divorce often is one of the most challenging aspects, even in seemingly amicable divorces. Only issues regarding minor children are more challenging. If you and your spouse have acquired considerable assets and/or liabilities during the marriage, you think you might have issues with regard to non-marital assets, or you are uncertain about how the property will be distributed–and whether your needs will be adequately met, we encourage you to consult with an experienced family lawyer. Sandy Ambrose has 27 years experience in guiding divorcing parties through the process. Call today to schedule an appointment to discuss the particulars of your case.