Who gets what? This is one of the most common questions in a divorce case. And, depending on the size of the marital estate, the answer can either be simple and straightforward or complex and time-consuming. This is because property division is one of the most important aspects of a divorce case. The way that property is divided can even have an impact on other parts of the case such as whether the court awards alimony or attorney’s fees to a party who requests them.
So, how does property division work?
Divorce courts have a lot of discretion to grant or not grant relief to the parties in a divorce case. But one thing the court absolutely must do, without exception, is to equitably distribute the marital assets and liabilities. That is to say, the court in a divorce case has a duty to identify which assets and liabilities are marital in nature and to distribute them appropriately between the parties.
To understand how the court does this, let’s start with some basic terminology. For example, what are marital assets and liabilities?
Generally speaking, marital assets include any real estate or personal property that was created, received, or acquired by either spouse during the period between the date of the parties’ marriage and the date that the divorce papers were filed. Contrary to popular belief, it does not matter whose name the property is titled in – it is still marital property that can be divided by the court. If that seems surprising, consider this – even gifts from one spouse to another are considered marital property.
Marital liabilities are debts or financial obligations that were incurred during the course of the marriage up through the date that the petition for divorce was filed. As with marital assets, it does not matter whose name the debt was incurred in. So, one spouse could be at least partially responsible for charges that are racked up on the other spouse’s credit card, for example.
Before we continue, let’s take a moment to talk about non-marital assets and liabilities. As the name implies, non-marital assets and non-marital liabilities most often refer to property and debts that existed prior to marriage or were created after the divorce papers were filed. Assets and liabilities created during the marriage can also be considered non-marital if they were designated that way as part of a prenuptial agreement.
Why is this distinction between marital and non-marital so important?
A divorce court can only divide marital property and debts. It has no jurisdiction to distribute anything non-marital. This is why the first step in any division of property is to identify which items are marital in nature.
Once the marital assets and liabilities are identified, the court has to assign a value to them. For items like bank accounts, loans, or credit card debt, this is fairly straightforward. But in the case of real estate or a business owned by the parties, it is sometimes necessary to have the asset professionally appraised in order to determine a fair market value.
When the marital assets have all been identified and valued, the next step is to divide them between the parties. This is what we call equitable distribution. It’s helpful to remember that equitable does not necessarily mean equal. Under Florida law, the court must start with the premise that the division should be equal – or fifty-fifty – but it doesn’t have to stay that way. The court can make an unequal distribution based on a number of relevant factors such as:
• The contribution made by each spouse in acquiring or maintaining an asset.
• The financial circumstances of each party.
• The length of the marriage.
• The dissipation or waste of marital assets by either party.
Of course, the parties are free to enter into a marital settlement agreement that divides their property the way that they see fit. Barring a provision that violates the law or public policy, the court will generally honor and enforce such an agreement.
The division of property is one of the most fact-dependent determinations that a court will make in a divorce case. It is vital to have the assistance of a qualified and experienced divorce attorney to ensure the accurate classification and valuation of assets and to ensure a fair distribution that takes into account the contributions made by each spouse to the marriage.
Contact property division attorney Andrew Foster to schedule your initial consultation today.