Dividing assets while going through a divorce can be tricky
Hire Michael D. Fluke, P.A. for Equitable Distribution help in Dunedin & Tampa, FL
Equitable Distribution is the term in Florida used for the division or the assets and debts of the marriage. The premise of Equitable Distribution is that the division of marital assets and debts be fair and just. This does not necessarily mean 50/50 or equal, but it does mean that the presumed starting point is 50/50.
The first task in determining Equitable Distribution is to determine which assets and debts are marital and which are not. Marital assets and debts are those which arose from the time of marriage to the time of either entering into a written separation agreement or the filing of the Petition for Dissolution of Marriage. Records and statements can be critical. Most people do not keep records and statements for the duration of their marriage and most institutions only maintain records for seven years. If you are getting a divorce or even contemplating one, make sure to copy as many of these records as possible and save them in a secure place.
Of course, like just about everything else in the law, there are many exceptions to this rule. The one that comes up most frequently is inheritance and gifts from family members. Inheritance and figts from family are non-marital and as long as they are not co-mingled with marital funds to the point where it cannot be traced, it should remain non-marital. KEEP YOUR INHERITANCE SEPARATE! KEEP GIFTS FROM FAMILY MEMBERS SEPARATE! GET A SEPARATE BANK ACCOUNT AND NEVER PUT MONEY FROM FAMILY MEMBERS OR INHERITANCE INTO AN EXISTING ACCOUNT. DO NOT DEED AN INHERITED OR GIFTED HOME IN YOUR SPOUSES NAME OR PAY THE BILLS FOR THAT HOUSE WITH MARITAL FUNDS IF YOU INTEND IT TO BE YOUR SEPARATE PROPERTY!
The engagement ring is another frequent question. Assuming the ring was not a family heirloom and there was no agreement that the ring would be returned, the ring is a non-marital gift.
Finally, keep in mind that some assets and debts can be part marital and part non-marital. Assets and debts that pre-existed the marriage but continued to be actively added to or changed can be considered both. The most common example of this are IRAs, 401Ks and Pension Plans. The simple way of dividing these items may be to divide the current value by the percentage of married years. Courts have accepted this method absent any evidence to the contrary. On other occasions, in high asset cases, forensic accountants can be used to establish marital and non-marital values.
After determining the marital and non-marital assets and debts, a date for valuing the assets and debts must be established. The court has a great deal of discretion in selecting a date of valuation and not all of the assets and debts will have the same date of valuation. For example, in some instances where one Party has run up a massive amount of credit card debt (beyond the expense of normal living), after separation but before the filing of the Petition, the court may choose the date of separation for the valuation of that debt. In the same case the court may select the date of trial to value a pension plan or IRA that has not been actively contributed to or changed, but has increased or decreased due to market forces. The determination of a valuation date can be essential when dealing with equitable distribution.
Finally, once all of the assets and debts have been determined marital or non-marital and a valuation date has been established, the assets and debts must be divided. This is not a Wisdom of Solomon situation where each and every asset and debt is going to be divided in half. Based on the relative earning abilities of the parties, the names that the assets or debts appear in, the desirability of one party or the other keeping a particular asset or debt and a whole host of other factors, the assets and debts should be divided in a fair and equitable manner.
Again, there are more exceptions to this process than there are rules. When there are marital homes involved, especially in cases involving children, this can become very tricky. Even in cases without children, marital homes can become the most difficult part of equitable distribution. In the current housing market, many homes are upside down. It is difficult to sell the home, yet often times neither party has the ability to refinance the home in their name alone. This creates difficult decisions and unattractive options. An experienced lawyer can help you weigh out the lesser of the evils concerning the marital home in this market.
In addition to Equitable Distribution, one has the ability to ask the court for inequitable distribution which also encompasses what was formerly known as Special Equity. Marital contributions to non-marital assets, such as major improvements made to one spouses pre-marital property, may give rise to inequitable distribution. The extraordinary contributions of one spouse to the marriage may also give rise to inequitable distribution. This does not mean that because one spouse was the wage earner and the other spouse stayed home with the children that there was extraordinary contribution. The courts have long recognized the significant contribution that a homemaker can make to the marriage. Short term marriages can also be fertile ground for inequitable distribution.
Over all, Equitable Distribution has the potential to be one of the most complex and time consuming aspects of a Divorce case. It is important to see the forest through the trees. Paying two lawyers to battle over a $20.00 DVD or bed pillow makes little sense. An experienced lawyer should be able to guide you in picking and choosing your battles and letting emotion give way to reason.If you are contemplating Divorce and have significant assets and debts, contact Michael D. Fluke, P.A. today, servicing Dunedin & Tampa, FL.