Tag: marital property

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.

 

Divorce and Leaving the House

Rumors abound of marital discord between Melania and President Trump. Generally, couples fight over who stays and leaves the house during a divorce. What if the marital home is the White House should the First Lady move out?

Meet the Trumps

Some people are claiming the issue of vacating the marital house is uncharted territory for a sitting president (assuming they divorce), since no American president has ever gotten a divorce while in office.

Usually, both spouses are entitled to stay in the marital home. However, staying in the home can be denied if a spouse is damaging it, or the children are exposed to domestic violence, for instance.

However, Donald Trump doesn’t have a deed to the White House, it’s not his property. The White House is owned by the people of the United States of America.

There’s also the issue of presidential security. Having an estranged spouse in the White House may make the Secret Service uneasy if there were divorce proceedings.

Housing Issues

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.

Children’s Issues

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.

Cost

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.

Settlement

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.

If you Leave

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

1600 Pennsylvania Avenue

Because both sides during a divorce have a right to live in a “jointly titled home” during divorce, except for extreme circumstances such as domestic violence, the First Lady should have no trouble.

However, the White House is part of the President’s compensation package for serving as President of the United States. If so, it is President Trump’s right to live there and not his spouse’s.

They could also both live in White House. The White House is built big enough that Melania would have an entire room, bedroom, almost a wing, just for herself.

Having been burned down by the British, the White House could easily handle divorcing spouses. Right?

The Daily News article is here.

 

Property Division is not Nirvana

Kurt Cobain’s acoustic guitar from the MTV Unplugged concert is legendary. The equitable distribution of Kurt’s iconic guitar was a major property division issue in the divorce between Kurt’s daughter and her husband. The case of Kurt’s guitar is now decided.

About a Girl

The divorce between Kurt Cobain’s daughter Frances Bean Cobain and her Isaiah Silva may be over, but Cobain lost a prized possession to her now Ex-Husband: her father’s famous guitar.

Isaiah claimed he owns Kurt’s former Martin D-18E guitar from the famed MTV performance. The guitar is a very rare; only 300 were made.

For the Cobains however, the guitar’s sentimental value is immeasurable, as it was the last guitar played by Kurt before his suicide.

Silva argued the model had given him the guitar as a present, while she denied ever giving it to him. That was for the judge to decide.

Florida Property Division

I’ve written about equitable distribution and various types of property divisions in Florida before. Let’s assume that the guitar was in fact a wedding gift from Frances to Isaiah.

What happens? In all likelihood, the guitar would be considered marital property, not just Isaiah’s, and would have to be equitably distributed.

In Florida, “Marital assets and liabilities” include interspousal gifts during the marriage. In divorce proceedings, the court must divide the marital assets between the parties.

Courts begin with the premise that the distribution should be equal, unless there is a justification for an unequal distribution based on certain relevant factors.

These factors include things like the contribution to the marriage by each spouse, the economic circumstances of the parties, and any interruption of personal careers or educational opportunities of either party for instance.

So, what are “marital assets and liabilities”? They include things like assets acquired during the marriage, and interspousal gifts during the marriage for instance.

However, “nonmarital assets” include things like assets acquired before the marriage, and assets acquired by non-interspousal gift. This sort of non-interspousal gift argument may have been similar to what Isaiah argued successfully in court.

Smells Like Teen Spirit

Although she lost the iconic guitar in the equitable distribution, Frances did get the house they bought together, and doesn’t have to provide any spousal support; Silva had been asking for $25,000 a month.

The People article is here.

 

Property Division is Not Half Bad

They say a guy knows he’s in love when he loses interest in his car. A Kansas man is showing the reverse is also true. Alternatively, that would explain why the Kansas man still clings to his half-of-a-car long after his love ended. At the very least,his half-a-car is physical proof that a property division means equal halves.

The Better Half

According to the Kansas City Star, the late-Edgerton Mayor, Ray Braun, used to own the gas station where the front half of his 1987 Chevrolet Citation is parked, a testament to a successful property division.

On the side of the car is a sign which reads:

“Divorced. She got ½.”

The former mayor is the culprit who put his half of the equitable distribution – the half-car – in front of the gas station.

Some view his half a car as a landmark. If you go to Kansas City, or anywhere around, and ask about this town, they have no clue where it’s at. But if you ask them, ‘You remember that little half-car that’s off 56?’ ‘Yeah!’ ‘Well, that’s that little town.

But at a special morning meeting, the three council members in attendance decided unanimously for the city attorney to draft a resolution to finally be rid of the half car.

Florida Property Division

I’ve written about property division in Florida many times 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, the court can give less than equal.

When a court orders an unequal distribution, it must base the decision on certain factors, including some of the following:

  • The contribution to the marriage by each spouse.
  • The economic circumstances of the parties.
  • The duration of the marriage.
  • Any interruption of personal careers or educational opportunities.
  • The contribution to the personal career or educational opportunity of the other spouse.
  • The desirability of retaining any asset.
  • 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.

The courts don’t even have to wait for the end of the case to distribute property. Florida law allows courts, if they find good cause that there should be an interim partial distribution during a divorce action, to equitably distribute property sooner.

You Don’t Know the Half of It

Braun fitted his half-car with rear caster wheels and used to drive it in parades. But City Council President Clay Longanecker says the car has become “an eyesore” and the Edgerton codes department has ruled it has to be disposed of.

To some Edgerton residents however, the half-car has for years been seen as a welcoming post, a kind of unofficial eyesore monument. and some may fight to keep it.

The biggest joke of all? Braun was never divorced.

The Kansas City Star article is here.

 

Divorce Auction

Russell Crowe sold dozens of items this past weekend at a Sotheby’s auction to help him fund his divorce from ex-wife Danielle Spencer. The auction appears to have worked better than expected.

The Art of Divorce

Crowe titled the event “The Art of Divorce,” the divorce auction took place in Sydney on his 54th birthday and featured more than 200 items, including movie memorabilia, antique treasures, artwork and a collection of instruments.

A replica Roman chariot from the same movie in which Crowe played the general-turned-gladiator Maximus, thought to be worth up to AU$10,000, was sold for AU$65,000.

Sotheby’s had estimated the sale would bring in up to AU$3.7m (more than $2.8 million in U.S. dollars), but many items sold for more than their original pricing.

Florida Property Division

In Florida, courts distribute marital assets and liabilities between the parties with the premise that the distribution should be equal unless there is a justification for an unequal distribution. Although it may seem like it, equitable distribution is not an auction.

I’ve written about various aspects of property division before, including Russell Crowe’s proposed auction when it was first announced.

Marital assets are properties acquired and debts incurred during the marriage, individually by either spouse or jointly by them.

Marital assets and liabilities also include the enhancement in value and appreciation of non-marital assets resulting either from the efforts of either party during the marriage.

Dissipation and Waste

One of the relevant factors courts look to in property division is whether one of the parties intentionally dissipated, wasted, depleted, or destroyed any of the marital assets after the filing of the petition.

Spouses can dissipate assets by giving away money irresponsibly, spending money on girlfriends, gambling losses, and drug usage. Some people would rather lose the money outright than split it with their spouses.

If the dissipation of an asset resulted from misconduct, the question is whether a spouse used marital funds for his own benefit unrelated to the marriage at a time when the marriage was undergoing an irreconcilable breakdown.

Misconduct is not mismanagement or even a simple squandering of marital assets in a manner of which the other spouse disapproves. There is no report that the Crowe auction was a waste of assets.

Instead, there has to be evidence of the spending spouse’s intentional dissipation or destruction of the asset. Where marital misconduct results in a depletion or dissipation of marital assets, it can serve as a basis for unequal division.

Alternatively, courts can look at the misconduct, and can assign to the spending spouse as part of their equitable distribution, the misconduct losses.

Battle for the Jockstrap?

Among the most popular items at the auction was the breastplate he wore in “Gladiator” when his character Maximus (spoiler alert) bites the dust. The piece sold for $125,000 while matching leather wrist cuffs scored $32,000.

Crowe also sold items from movies like “Master and Commander,” “The Silver Brumby” and “Proof,” though the Royal Navy dress blues from “Master” proved extremely popular, bringing in a $115,000 haul.

One of the more curious items was the leather jockstrap Crowe wore in the 2005 film “Cinderella Man.” The protective piece went for $7,000 to one lucky bidder.

“I put it in the collection as a piece of whimsy and a bit of a gag. Funny enough, it’s garnered a lot of attention,”.

He and Spencer wed in 2003, and news broke of their split in 2012. The divorce is just about finalized, and the ex-couple share two children.

The auction raised money for the A.C.M.F. charity, which provides free music education and instruments to disadvantaged and indigenous children and youth at risk in Sydney.

The New York Times article is here.

 

New Property Division Law

Kaaa! That’s not a scream, it’s a Hawaiian name pronounced “Ka-ah-ah”. Florida divorce lawyers know Kaaa as a famous Florida Supreme Court case which changed equitable distribution here. Kaaa had its faults, but recently the Governor signed a bill to fix it.

Florida Property Divisions

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 of a nonmarital asset, a house for example, encumbered with a mortgage paid down with marital funds, may be a marital asset the court must equitably distribute.

Can You Split Nonmarital Property?

Passive appreciation of a house without a mortgage, for example, is not subject to division in a divorce. But what about the passive appreciation of a house with a mortgage, where the principal balance of the mortgage has been paid with marital funds?

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 Kaaa court recognized that the marital portion of nonmarital house encumbered by a mortgage paid down with marital funds includes two components:

(1) a portion of the enhanced value of the marital asset resulting from the contributions of the nonowner spouse and

(2) a portion of the value of the passive appreciation of that asset that accrued during the marriage.

The Kaaa Problem

The 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 Kaaa 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 Kaaa case required a nonowner spouse to have made contributions to the property as a prerequisite to sharing in the passive appreciation of the property.

A lot of people argued that Kaaa conflicted with our equitable distribution statute, which said marital assets include the enhancement in value and appreciation of nonmarital assets resulting from the use of marital funds.

The Fix Bill

The Family Law Section of the Florida Bar helps create legislation, and also monitors proposals in the Florida Legislature. Members of the Section advise legislators and staff and even testify before the Legislature.

Governor Scott signed a bill to fix Kaaa. 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, as required under the Kaaa calculation.

The fix bill 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, and even allows a party to argue that the formula shouldn’t apply.

The new law takes effect July 1, 2018.

The Kaaa fix bill is available here.