Tag: Equitable Distribution premarital home

A Fast and Furious Divorce Property Division

Jordana Brewster’s divorce got expensive. The Fast and Furious star’s property division comes at a steep price as she has to buy out her ex-husband from their Los Angeles former marital home.

Fast & Furious 5,000,000

According to news reports, Brewster, 41, agreed to pay her ex-husband, Andrew Form, $5 million as part of their divorce settlement, The figure represents his half of their marital home in Los Angeles, which she will keep.

Additional details of the divorce settlement include that any income Brewster makes from the latest “Fast and Furious” movie is her separate, non-community property.

Her producer ex-husband also agreed that any income either earns “as a result of their personal and professional effort” from May 13, 2020 and beyond “shall be the separate property of the earning party.”

Neither Brewster nor Form will receive or pay spousal support. While a judge still needs to sign off on their agreement, Brewster and Form are legally single and co-parenting their two sons.

Florida Divorce and Property Division

I’ve written about houses and property divisions before. California is a community property state, but Florida is an equitable distribution state. In Florida, every divorce requires the court has to set apart nonmarital property, and distribute the marital property.

Florida judges always begin with the premise that the property distribution should be equal, unless there is a reason for an unequal distribution based on several factors.

One of the factors the court has to consider is the desirability of keeping the home for the kids or a spouse, if it’s equitable to do so, if it’s in the best interest of the child, and financially feasible.

Some spouses decide to sell but schedule the sale months or years into the future. This happens when a couple has kids, and both parents agree that the house shouldn’t be sold to preserve the school district or allow for easier timesharing.

There are other problems in a keeping a house in which your name is still on title. In the even that your ex-spouse does not pay the mortgage timely, your own credit will suffer the late notices.

And, if someone invited to your old home is hurt, that person will sue the record title owners for their damages. If your name is on title as an owner, that’s you! Making sure you have decent insurance on the house may be in order.

Many communities are experiencing a red hot real estate market. If you can’t wait for years, and need to sell immediately, there’s a silver lining in addition to this being a seller’s market. A fresh start and new beginning after a complete division of all of the assets tying you together with your Ex is the best way to go forward for some people.

However, there’s a cost of sale. When you sell your house, you pay a commission, and other expenses, like taxes, title expenses, repairs which can average about 10 percent of the sale price.

The California Marriage Massacre

Brewster and Form met while working on “The Texas Chainsaw Massacre: The Beginning.” Form was a producer on the film.

“We started dating in secret — you know, hanging out in my trailer — because it would have been unprofessional otherwise,” she previously told InStyle Weddings (via People). “But every day, Andrew wore these work boots to the set, and if I was lying down in the shot or there was equipment in the way, I’d look for his shoes. It was comfortable just to know he was nearby.”

They called it quits after 13 years of marriage in June 2020, and the actress filed for divorce the following month. In a deeply personal essay she wrote for Glamour, Jordana says she was compelled to divorce Andrew due to their vastly different schedules.

‘Most of why my marriage didn’t work was not my ex-husband’s fault,’ she said. ‘He loves work. He loves being on set, on location. I knew this from ages 27 to 32, but it became a problem for me once the kids were older. I wanted a partner.’

‘So, toward the beginning of the pandemic, Andrew and I decided to separate. The combination of being apart for most of the year for many years and growing apart emotionally took its toll.’

Just days after their separation, Jordana would reconnect with her current boyfriend Mason Morfit, whom she first met a few years earlier when they were both still married to other people.

‘Four days after I separated from Andrew, I was on a plane to San Francisco to visit this man I had met only once but who had stayed on my mind. I knew he’d been separated for two years. I wanted to see him, to confirm whether the image I’d built up in my mind matched reality. What I got was far more than I expected.’

During a time when the world avoided all contact, when it was mandated that everyone stay six feet apart, Mason and I blended into each other.’

The couple shared a five-minute long embrace and a kiss when they reunited at the airport. As far as Andrew, the movie producer has since moved on with actress Alexandra Daddario, who debuted their romance in May 2021 with a kissing snap.

‘I love you . . . and even that is an understatement,’ she captioned the photo.

The Fox News article is here.

Modern Family Problems Divorce and the Home

Divorce and what to do with the home is in the news now that Modern Family actress, Julie Bowen, has listed her home for sale. Although she finalized her divorce from ex-husband Scott Phillips a few years ago, her case raises the issue of housing again.

Home Divorce

Hollywood Hills Home

According to many reports, the couple reached an agreement to split their assets of $25.3 million directly down the middle. In the divorce agreement, Bowen, who first filed for divorce in February, will receive more than $13 million while the real estate investor will receive $12.3 million.

In their marital settlement agreement, Bowen got to keep the Hollywood Hills house, worth $3.1 million at the time. Bowen had purchased the property after the separation.

Phillips, on the other hand, got to keep the couple’s $5.4 million marital home. Details of custody, child support and spousal support were filed in a private settlement agreement.

House and Divorce

I’ve written about the marital house during a divorce before. Generally, the home remains a marital asset, which is subject to equitable distribution, regardless of who lives there during the divorce process.

If a home is marital then both parties have equal rights to buy – out the other’s share. Both may also be on the hook for liabilities.

Until a divorce parenting plan in place, if you are interested in maintaining a meaningful relationship in your child’s life, leaving the home before a timesharing agreement is entered may show a lack of real interest in the child’s daily life.

Moving out can create the appearance of a new ‘primary residential parent’ by default. Worse, if the process takes a long time, it creates a new status quo.

The person leaving during a divorce may still have to contribute for the expenses of the home while also paying for a new home. It can be costly, and prohibitive expensive when you know that the process will take a long time.

Staying in the same home could create an incentive to negotiate a final settlement because living with your soon to be ex-spouse is very uncomfortable. However, if someone moves out, the person remaining in the home is sitting pretty and may be less inclined to settle.

Before moving out, there should be some discussions about maintaining the home and who is paying for which expenses, an inventory should be made of the personal property, artwork, silverware etc., and the boundaries for when the ‘out-spouse’ can use and enjoy the home after vacation

A Modern Family Home

The designer Hollywood Hills pad she purchased in 2017 shortly after splitting from her ex-husband was reportedly worth $3.1 million during the divorce because that was what she paid for it. The mid-century modern time capsule home just off iconic Mulholland Drive is now on the market for $3.85 million.

Designed by architect Thornton Abell, the glass-walled structure is made up of four bedrooms and three baths and spans over 3,200 square feet. Built in 1959 for prominent heart surgeon Augustus Bakos, the home was later acquired by the son of Beach Boys co-founder and guitarist Carl Wilson, who renovated the home and expanded it.

Pegged as “exceedingly private,” the property sits on a long, gated driveway and boasts pastoral canyon and treetop views. Interior features include floor-to-ceiling walls of glass, which are complemented by Palos Verdes stonework, terrazzo floors, custom divider screens and teak cabinetry.

Other interior finishes include a granite and stainless steel kitchen, an expansive master suite with a fireplace, a large walk-in closet and a terrazzo master bath with a glass ceiling.

It also boasts separate guest quarters, a small detached gym in the backyard, a poolside living room and a lush garden atrium. Bowen, 51, had been married to Phillips, a real estate investor, for over 13 years before calling it quits. They share 14-year-old Oliver and 12-year-old twins John and Gustav.

The New York Post article is here.

 

The Ultrawealthy Divorce Differently and there’s more Good News on Coronavirus

Locked out of your $88 million Manhattan condo? The rich are different when it comes to equitable distribution. As the Wall Street Journal reports, how ultrawealthy couples divorce is becoming much harder as financial portfolios become more complex. There’s also good news on the coronavirus.

Ultrawealthy Divorce

Enter the Badlands

Many ultrawealthy people in a divorce are having trouble finding assets, like the front door keys to their $22 million Hawaii home. A big reason for the complexity is the widespread use of trusts. Trusts can play a big role in divorce depending on your circumstances.

Setting up a trust may allow you to safely transfer ownership of your non-marital property into a separate trust. If you divorce, a trust like this may make the entire property, and its appreciation, out of equitable distribution.

South Dakota is becoming a hotspot for trusts, holding almost a trillion dollars in trust assets because state laws have made South Dakota more favorable for trusts. Generally, trust assets are managed by a Trustee for the benefit of beneficiaries.

A trust can be drafted with a variety of different provisions in order to accomplish a variety of different goals. In every trust, the Trustee must account to the beneficiaries about its actions, and it must be fair and prudent in dealing with the trust and beneficiaries.

So, what happens if one spouse is named as the beneficiary of a trust, and that spouse benefits from the trust during the marriage? The answer to questions like this is not always straightforward in every state.

Florida Equitable Distribution

I have written about Florida equitable distribution during divorce before. In Florida, the legislature has created a statutory scheme to guide family courts in the equitable distribution of assets upon dissolution of a marriage.

Under Florida’s equitable distribution statute, marital assets include assets acquired during the marriage, individually by either spouse or jointly by them. Nonmarital assets include assets acquired by either party prior to the marriage, and assets acquired in exchange for such assets.

The equitable distribution statute also creates a rebuttable presumption that assets acquired by either spouse during the marriage are presumed to be marital assets: “All assets acquired … by either spouse subsequent to the date of the marriage and not specifically established as nonmarital assets … are presumed to be marital assets …. Such presumption is overcome by a showing that the assets … are nonmarital assets ….”

That’s where trusts come in. Although your home became a marital asset when you purchased the home and jointly titled it in you and your spouse’s names, the home can cease in character to be a marital asset upon its transfer into a trust.

At that point, the home can become part of the assets of the Trust, an entity distinct from either a Husband and Wife. Transferring a home into a Trust has the possibility to place the home beyond a family court’s reach for purposes of equitable distribution in a divorce.

In South Dakota We Trust?

As the Wall Street Journal reports, Texas financier Wilbur Bosarge and his wife of 22 years, Marie Bosarge, conducted business affairs through various trusts. For instance, they used a trust to buy a $45 million dollar flat in London’s “Billionaire Square.”

After Marie flew back and forth between Texas and London decorating and hand selecting furnishings for the new London flat, she never got to see it finished.

By the time it was complete, her husband left her for a 20-something Russian mistress who moved into the flat instead.

Owning the flat through a complex network of trusts and limited liability companies, the husband is using the ownership structure to eliminate her stake in the property. The wife may be stuck, because a family court may not be able to decide property rights of a nonparty to a divorce, like a trust or limited liability company.

Good News on Coronavirus

Let’s face it, the media has a tendency to give extra coverage to bad news, because readers find negative stories more eye-catching.

But, from lower toxic fumes to more time spent with family, there is always good news to report during the high point of the novel coronavirus pandemic.

  • First, there are tentative signs of infection curves flattening. Concentrate on statistics about the tendency of curve flattening – not the rising death rates – as an early harbinger of the turning point.
  • Second, a major model has lowered its prediction for the death toll in the United States. The model predicts that some states will start to see fewer deaths from COVID-19 each day and some states may have even passed their peak.
  • Third, pharmaceutical firm Abbott Labs said it was launching a test for the SARS-COV-2 virus that could take as little as five minutes and “be run on a portable machine the size of a toaster”. German technology company Bosch says it has done the same. Johnson & Johnson said it had identified a vaccine candidate and the US government was investing $1 billion in its development.
  • Fourth, other groups are investigating ways to start human trials for vaccine candidates early, and are using brave and willing volunteers, who haven’t been at all hard to find.

The Wall Street Journal article is here.

 

Can your Spouse Secretly Sell your House?

Real Housewives of New Jersey star Danielle Staub is claiming her estranged husband Marty Caffrey listed their Englewood, N.J. home for sale without telling her. Can that happen in an equitable distribution state?

equitable distribution

Real Listing?

According to People:

“Danielle did not know her home, where she lives, was listed for sale until she saw a story about it online,” the rep says. “This is yet another example of the blatant disrespect and emotional abuse she has endured in this relationship.”

Caffrey, 66, filed for divorce from the reality star in August—just four months after their wedding, and Staub, 56, has been vocal about how hurt she was by how public their split was.

In July, Caffrey posted a negative rant about Staub on social media. The pair took out restraining orders against each other that same month following a domestic dispute at the New Jersey home that is now on the market. The restraining orders were both later dropped.

The six-bedroom, seven-bathroom house features a gourmet kitchen, high ceilings, a media room, and a sauna. The property is listed for $2.195 million with Frances Aaron and Miriam Finkel of Prominent Properties Sotheby’s International Realty.

When asked about the sale of their home, Caffrey tells People, “Danielle’s version is untrue and other than that I have no comment.”

Real Equitable Distribution

I’ve written about the equitable distribution of houses before. New Jersey, like Florida, is an equitable distribution state. California, and many other western states, are community property states.

In Florida, in every divorce the family court will set apart to each spouse that spouse’s nonmarital assets and liabilities, and in distributing the marital assets and liabilities between the parties, the court must begin with the premise that the distribution should be equal.

All real property held by the parties as tenants by the entireties, whether acquired prior to or during the marriage, is presumed to be a marital asset in Florida. If a spouse makes a claim to the contrary, the burden of proof shall be on the party asserting the claim that the property is nonmarital.

It is unclear whether Staub and Caffrey have joint title to the New Jersey house, or it is titled in one of their names alone, or even a holding company. Generally, it’s a good idea to have all title owners sign a contract, or it may not be enforceable against the owner who did not sign.

Real Troubles

Back in New Jersey, although Staub claims she was unaware of her home being put on the market, she recently told People that she considers herself a “warrior,” and her experience with this divorce has been no different.

Prior to their public problems, the two had trouble agreeing over many things in their relationship, Staub said. Tense dynamics with their blended family (Caffrey has three adult children from a previous relationship) also came into play.

“He doesn’t like me and he doesn’t like my children,” Staub claimed. “My kids have never been anything but respectful and lovely towards him even though he hasn’t been the same towards their mom.

Caffrey, in a statement to People at the time, said, “This is not my world nor do I have any further interest in it. These are manufactured celebrities in manufactured lives who manufacture their own truths. I look forward to getting back to my reality among real people. My loving family and vast amount of friends.”

The People article is here.

 

Today’s Property Division

According to People, former Today Show anchor, Matt Lauer, is finalizing his divorce with Annette Roque. The settlement is rumored to involve him paying his wife up to $20 million. The details of the property division however is unknown, but is a reminder that divorce property division laws in Florida recently changed in a big way.

Property Division

Good Morning Property Divisions

According to People, the couple, who wed 20 years ago in 1998, has agreed to share custody of their children. He is rumored to have a lot of guilt and wants to make sure Annette is taken care of.

Reportedly:

They seem happier and their family and friends are thrilled to see they are both moving forward.”

Left unsaid in the article is what happens to the $7 million coop in New York City, the Hamptons beachfront estate he bought for $36 million from actor Richard Gere, his Sag Harbor home, and other properties.

Florida Property Division . . . and Friends

I’ve written about property division before. Property division, or equitable distribution as it is called in Florida, is governed by statute and case law.

Generally, courts set apart to each spouse their non-marital assets and debts, and then distribute the marital assets and debts between the parties.

Marital assets and liabilities include, in part, assets acquired and liabilities incurred during the marriage, individually by either spouse or jointly by them.

Passive Appreciation and Morning Joe

Passive appreciation of a nonmarital asset may also be a marital asset the court must equitably distribute. For example, Lauer bought his upper East Side apartment for roughly $6 million, but has it listed for over $7 million.

In 2010, the Florida Supreme Court held that “passive appreciation of a nonmarital asset … is properly considered a marital asset where marital funds or the efforts of either party contributed to the appreciation.”

The Florida Supreme Court created a formula for courts to use in determining the value of the passive appreciation of nonmarital real property for equitable distribution.

But the formula was flawed because there is no relationship between the amount of marital funds used to pay down a mortgage during a marriage, and the passive appreciation of the property.

Also, the case requires a nonowner spouse to have made contributions to the property as a prerequisite to sharing in the passive appreciation of the property.

Live with Kaaa

Recently, Governor Scott signed a bill to fix the problem. The bill amends our equitable distribution statute and establishes a statutory formula for courts to use.

The new statutory formula does not require the nonowner spouse to have made contributions to the property, and also bars the marital portion of nonmarital real property from exceeding the total net equity of the property on the valuation date in the divorce action.

The People article is available here.

 

Real Ex-Housewives of OC

Gina Kirschenheiter, one of two new cast members this season on “The Real Housewives of Orange County,” and her husband, Matthew, have decided to divorce, and sell their Coto de Caza house. What goes into the decision to sell the marital home?

Divorce House

Real Trouble in OC

They may live in the lap of luxury, but life isn’t always perfect for the women who reside in one of the wealthiest enclaves of the U.S. The real housewives of OC may continue to focus on living large; plastic surgery, working out, shopping, drinking, and dancing, but real life sometimes intrudes.

The Bravo TV personality filed for divorce from Matthew Kirschenheiter claiming irreconcilable differences. She’s seeking sole physical custody and joint legal custody of their three children, ages 2-5, as well as spousal support.

Once you’ve decided to divorce, new decisions need to be made: who is going to move out of the house, and are you going to sell the house – or not. Florida’s property division statute requires distributing the marital property but is not exactly a how-to guide.

Deciding Whether to Sell

There’s really no right or wrong answer to whether you should sell or keep a house. Your decision will depend on various factors.

Some of the factors influencing the decision to sell are things like your personality, is the house titled in both of your names, are there children, if so, where are the best schools, and how far away are the two parents’ homes.

Equitable Distribution

I’ve written about houses and property divisions before. In every Florida divorce proceeding the court has to set apart nonmarital property and distribute the marital property.

Florida judges always begin with the premise that the property distribution should be equal, unless there is a reason for an unequal distribution based on several factors.

One of the factors the court has to consider is the desirability of keeping the home for the kids or a spouse, if it’s equitable to do so, if it’s in the best interest of the child, and financially feasible.

The Sale

There are problems with keeping a house in which your name is still on title. If your real ex-spouse doesn’t pay the mortgage timely, your credit will suffer. And, if someone invited to your old home is hurt, the injured person will sue the record title owners for damages. If your name is on title as an owner, that’s you! Making sure you keep insurance on the house may be required.

A fresh start and new beginning after a complete division of all of the assets tying you together with your Ex is the best way to go forward for some people.

The Real Housewives couple bought the house in 24-hour, guard-gated Coto de Caza in April 2016 for $840,000, property records show. The gourmet kitchen includes Viking appliances, wooden cabinets and a breakfast nook. There’s also a landscaped backyard with a lawn and barbecue area. The house has a three-car garage and is within walking distance of a community park.

The Mercury News article is here.

 

Property Division: Avoiding Mistakes

As CNBC reports, divorce can take an emotional toll, but property division mistakes during the divorce can leave you in far worse shape than you intended. And the more intertwined you and your spouse’s finances are, the more closely you’ll need to pay attention while untangling them.

Ideally, you’ll have an attorney and a financial consultant who are advocating for the best property division, and who know what they are doing.

Nevertheless, experts say that even if you’d rather spend as little time as possible thinking about the divorce, it’s worth making sure you understand the implications of all property division decisions being made.

Most people don’t file during the summer, partly because the kids are out of school, they’re vacationing and they’re not focused on their relationship.

Then there’s a rise after Labor Day because people want to get things going before the holidays hit.

Florida Property Division

I’ve written about property division before. Property division, or equitable distribution as it is called in Florida, is governed by statute and case law.

Generally, courts set apart to each spouse their nonmarital assets and debts, and then distribute the marital assets and debts between the parties.

In dividing the marital assets and debts though, the court must begin with the premise that the distribution should be equal.

However, if there is a justification for an unequal distribution, as in the Work divorce, the court must base the unequal distribution on certain factors, including: the contribution to the marriage by each spouse; the economic circumstances of the parties, the duration of the marriage, or any interrupting of personal careers or education.

Additionally, courts can consider 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.

However, courts generally can’t base unequal distribution on one spouse’s disproportionate financial contributions to the marriage unless there is a showing of some “extraordinary services over and above the normal marital duties.”

CNBC’s Divorce Mistakes List

According to CNBC, if you are among those pursuing divorce, here are some property division mistakes to avoid:

1. Keeping a home you can no longer afford.

While staying put means one less change in the midst of an already life-altering event, it often makes little financial sense.

2. Taking the house in lieu of liquid assets.

If you are offered the house in exchange for your ex getting comparably valued investments — i.e., a retirement, bank or brokerage account worth the same amount — think twice before agreeing.

On paper the two may be equal, but practically speaking the house may be far more costly to maintain.

3. Ignoring the Tax implications.

Not all financial accounts are taxed the same way.

For instance, if you get the 401(k) plan account worth $100,000 and your spouse gets the checking account worth the same, you just got the raw end of the deal. Taking cash from the checking account incurs no tax, while any withdrawals from the 401(k) would be taxed as regular income to you.

Most people forget to look at the complete cost of each asset, particularly the tax nature of each.

4. Not getting a court order to get your piece of the 401(k).

If your soon-to-be ex has a 401(k) plan, you must have what’s called a qualified domestic relations order, or QDRO, to access your share. (Individual retirement accounts do not require a QDRO).

This court order, which must get final approval from your retirement plan, marks one of the few times you can take money from a 401(k) without paying a 10 percent early withdrawal penalty. You will, however, pay income tax on the amount if you don’t roll it over to an individual retirement account within 60 days.

5. Not Getting life insurance

Depending on how heavily you rely on child support or alimony (aka spousal support), the death of your ex could leave you in a financial jam.

Life insurance on the person, with you as the owner and beneficiary of the policy, can serve as protection against that potential loss of income.

The CNBC article is here.

 

Divorce & Property Values

Hong Kong is one of the most expensive cities in the world. According to the Hong Kong Census and Statistics Department, divorce has steadily increased, and is nearly three times higher than in 1991. Is there a connection between real estate prices, divorce and property divisions?

As Bloomberg reports, the usual suspects for Hong Kong’s sky-high property prices are low interest rates, a housing shortage and demand from mainland China. But there’s another unforeseen factor: divorce.

Demand for separations and remarriages have accelerated sharply over the past two decades as the former British colony has deepened its integration with the mainland.

Between 1976 and 1995, cumulative total 84,788. In the subsequent years, through 2015, divorces shot up to 323,298.

Looser travel restrictions between Hong Kong and the mainland after Britain handed the colony back in 1997 have played a role in encouraging Hong Kong residents to find new partners across the border.

Florida Divorce and Real Estate

I’ve written on the role of divorce and real estate before. In many cases, declining house prices make it less likely that a homeowner will get divorced, but more likely that a renter’s marriage will end. Why?

Generally, courts distribute the marital assets and debts between the parties. In dividing the marital assets and debts though, the court must begin with the premise that the distribution should be equal.

Equity in the marital home is sometimes the most valuable asset. However, during periods of market downturns, the equity is a lot less, and home values can sometimes be upside down. When the equity is too low to distribute, or selling a house may mean a loss, people don’t want to sell, and have to stay married.

Researchers also think that the drop in divorce rates probably have something to do with the fact that a drop in the equity in your house traps unhappy couples in their house. However, renters can find two affordable apartments easier.

The Case of Hong Kong

Hong Kong’s housing planners didn’t anticipate the wave of break-ups. The cumulative gross number of new domestic housing units built between 1976 and 1995 reached 1,267,335. In the 19 years afterwards that number dropped to 857,378.

The divorce phenomenon is feeding into a market frenzy that the Hong Kong government has found increasingly tricky to manage. As mortgage lending booms and prices reach records, a mix of rising interest rates, frothy property valuations and the potential for a market collapse are frequently flagged as one of the biggest risks to the economy.

In cases of marriage break ups, both members of a former couple can end up on waiting lists for public housing, with private homes proving unattainable.

Households need 18 years of median income to buy a home, more than anywhere else in the world.

The Bloomberg article is here.

 

Dividing Premarital Property

By The Law Offices of Ronald H. Kauffman of Ronald H. Kauffman, P.A. posted in Equitable Distribution on Friday, July 22, 2016.

Bought your home before your marriage, it’s yours right? Not necessarily. Florida has some peculiar property division laws you should be aware of.

Most people believe that if you bought your home before you got married, the property is separate property, and therefore cannot be equitably distributed by a family court.

Florida has some unique rules about premarital property that clouds that general rule. Your spouse may have a right to some of the home’s equity upon divorce despite it being separate property.

Florida’s General Rule

A court must set apart to each spouse that spouse’s nonmarital assets and liabilities. Nonmarital assets include assets acquired prior to the marriage. That is the general rule in Florida, but there may be exceptions.

Appreciation in Value Exception

In dividing marital assets, Florida courts take into account the active appreciation of nonmarital assets during the marriage. Appreciation could have been caused by spending marital funds or management of a property.

Courts can take into account passive appreciation on nonmarital assets, such as inflation, which is not subject to division. But, Florida courts have long agreed that paying down of a mortgage with marital funds on nonmarital property during a marriage is a marital asset.

In Florida, “marital assets” includes the “enhancement 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.”

The Supreme Court of Florida has pronounced that “the trial court must make a finding that the non-owner spouse made contributions to the nonmarital property during the course of the marriage.”

There are certain steps a trial court should employ to determine whether a non-owner spouse is entitled to a share of the passive appreciation of property:

1) Determine the overall fair market value of the home;

2) Determine whether there has been a passive appreciation of the property;

3) Determine that marital funds were used to pay the mortgage, that the non-owner spouse made contributions to the property, and “to what extent the contributions of the non-owner spouse affected the appreciation of the property”;

4) Determine the value of the passive appreciation; and

5) Determine the share of appreciation deemed “marital.”

Prenuptial Agreement Exception

If a couple entered into a valid prenuptial or postnuptial agreement, and the agreement makes a provision for a spouse to obtain an equitable interest in the house over time, a court can consider this in any equitable distribution.

I’ve written about property divisions before. Equitable distribution can be tricky, even when you have clear-cut, nonmarital assets.