Defining Marital and Nonmarital Property

Understanding a little about Florida’s equitable distribution statute will help you protect your premarital assets from being wrongly divided. In Florida marital assets and liabilities include assets acquired and liabilities incurred during the marriage, individually by either spouse or jointly by them.

Many people forget that marital assets also include the enhancement in value and appreciation of nonmarital assets resulting either from the efforts of either party during the marriage or from the contribution to or expenditure thereon of marital funds or other forms of marital assets, or both.

Another area of transforming nonmarital assets into marital one is by gifts. Under Florida law, marital assets include gifts between spouses during the marriage.

Conversely, nonmarital assets and liabilities include things like assets acquired and liabilities incurred before the marriage, and assets acquired separately by either party by non-interspousal gift, bequest, devise, or descent. For example, an inheritance may initially be considered nonmarital property absent anything else.

Before a court will classify your assets as either marital or nonmarital, the court will consider numerous factors. One of the factors a court will look at is the title of the property. A court will also consider whether you commingled your marital funds with your nonmarital funds. Were there any increases in the value of your nonmarital stock accounts because of marital efforts, or control of the funds? If so, a court may consider that too. They will also look at the length of the marriage, and your intent concerning the marital or nonmarital status.

Transforming Marital Property

In a recent case in Florida’s panhandle, a husband and wife divorced. During the trial, the family judge added to the equitable distribution schedule one of the husband’s Certificate of Deposit accounts. However, there was no evidence that the CD account, which was acquired ten years before the marriage, had transformed into a marital asset.

On appeal, the appellate court reversed the decision. The appellate court found that there was no evidence at the trial that there was any enhancement of the CD account through the husband’s efforts. The court also noted that there was no evidence that the husband commingled his nonmarital funds with marital funds. Lastly, there was no evidence that he had given to his wife the CD account as a gift.

Gifts between spouses are an important and frequent way in which a nonmarital asset becomes a marital asset. Believe it or not, there are even cases in Florida where spouses accidentally gifted non-marital homes to their spouse by birthday card, not realizing they would be found to have the proper donative intent.

Florida’s New Anti-Gift Law

This year the law changed in Florida. The revised equitable distribution statute now prohibits interspousal gifts of real estate unless there is written documentation that complies with the provisions for conveyance of real property under the statute governing deeds to property.

The mere inference of a gift of real property will now not meet the threshold required for an interspousal gift unless there was written documentation for a conveyance.

The new law in Florida also makes it clear that when a spouse merely signs a deed for the sole purpose of conveying a homestead property – other than the other spouse or both spouses jointly – the deed does not change the character of the real property from nonmarital property to marital property.

Finally, the new amendment to the equitable distribution statute changes the definition of nonmarital assets and liabilities so that real property acquired separately through non-interspousal gift, bequest, devise, or descent and in which legal title has not been transferred to both parties as tenants in the entireties, remains non-marital property.

The appellate decision is here.

Is it 1883 at the Yellowstone Ranch? Recently, a Montana legislator proposed a new bill that would turn the clock back on no-fault divorce by allowing family courts to consider adultery when deciding on a property division. The bill would also allow the court to award attorneys’ fees and costs of a divorce in cases of adultery.

Adultery Property Divorce

Dividing the ‘Oro y Plata’

The bill says in considering how to divide up assets and property during a couple’s divorce, a court “shall” consider “physical abuse or adultery that substantially contributed to the irretrievable breakdown of the marriage” along with a host of other things, like how long they were married, their income levels, health and more.

Under House Bill 237, which saw its first hearing Friday, if a court finds the abuse or cheating “substantially” contributed to the deterioration of the marriage, it “may” order the abuser or cheater to pay “a reasonable amount” of the other spouse’s attorney’s fees.

The bill further adds that “physical abuse or adultery alone” could allow the court to split the couple’s assets disproportionately. The measure would also apply to orders in which one spouse has to cover ongoing living costs for the other.

Current law says courts have to make that decision “without regard to marital misconduct.” Under the new bill proposed:

In a case in which the court finds physical abuse or adultery substantially contributed to the irretrievable breakdown of the marriage, the court may order the offending party to pay a reasonable amount for the cost to the other party of maintaining and defending any proceeding under this chapter and for professional fees, including sums for legal and professional services rendered and costs incurred prior to the commencement of the proceedings or after entry of judgment. The court may order that the amount be paid directly to the professional, who may enforce the order in the professional’s name.

One of the proponents who testified was a woman who said she ran a domestic violence program on the Hi-Line. She said perhaps adultery and physical abuse needed to be defined, though she said she believed physical abuse included adultery.

The sponsor said he was open to a possible amendment defining each.

Florida Adultery and Property Division

I’ve written about property and adultery before. Adultery can be the cause of a divorce, but can it impact the outcome? Since Florida became a no-fault state, the fact that Beth may have cheated on Rip would not be a drama played out in court.

Interestingly, while anyone can file for divorce in Florida without proving grounds, there is still a Florida statutory basis for adultery to be an issue in your divorce proceedings. But not in the way most people think.

Florida is an equitable distribution state, and it is presumed that property should be evenly divided. This presumption may be overcome by proof that one spouse intentionally wasted marital assets. This waste is sometimes known as dissipation. Paying for expensive jewelry, foreign trips, rent, car payments, and dinners for girlfriends and boyfriends is considered wasting marital assets. The court has the power to reduce an adulterer’s equitable distribution to credit the marital estate for waste.

Adultery alone would not really be grounds for an unequal distribution if there was no dissipation. The rationale is that dealing with allegations of marital misconduct, such as adultery, would be a step back to 1923: before our no-fault system was enacted.

Big Problems in Big Sky Country

Many are opposing the bill: “This bill is giving abusive partners a legal tool to use allegations of adultery in a public forum against their spouse to harass, humiliate and intimidate them into staying in a violent relationship,” said a Missoula family law attorney who testified in opposition to House Bill 237.

An attorney who said 90% of their caseload involves survivors of domestic violence, told the House Judiciary Committee the bill, if passed, “would be devastating for survivors.”

Abusers often accuse their spouses of adultery to “exercise power and control” over them and the bill would help them utilize the justice system to continue the cycle.

The attorney also said the measure would encourage parties to litigate who is at fault for the breakdown of the marriage, which would exacerbate already costly divorce proceedings. It would also further overburden courts where half of the cases involved family law\.

A domestic violence prosecutor for the City of Billings, said he was concerned judges might believe:

“The question we always get is why doesn’t she just leave? Well, this bill will help answer that question if it passes.”

The prosecutor also explained how domestic abusers – who are usually men, he said – see their wives as property and expendable resources and themselves “almost always (as) the victim.” He said the bill treats violence and adultery as the “exact same thing. Leveling accusations of domestic violence requires some sort of proof, and remember, one of these things is illegal; the other is not.”

The Daily Montanan article is here.

Tag: adultery property division

Transforming Nonmarital Property Into Marital Property