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Asset Division

Collaborative Divorce: Resolving Marital Disputes Without the Courtroom Drama

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When we think of divorce cases, we tend to see them as black and white. On the one hand, you can go to court, litigate, and engage in a long, bitter divorce fight. On the other hand, you can just agree on everything and have a simple, uncontested divorce.

What About Collaborative Divorce?

Collaborating Together

But the reality is that there is actually a third category for resolving divorce cases: collaborative divorce.

Think of collaborative divorce as a hybrid between extended bitter in-court fighting and simply agreeing on everything from the outset.

On the one hand, there may be real disagreements between the parties, and they may not even necessarily get along. But they may also want to avoid the drawbacks of long, draining, and expensive in-court litigation. That’s where collaborative divorce comes in.

Much like alternative dispute resolution, such as mediation, collaborative divorce happens outside of a court. In fact, collaborative divorce requires that no divorce cases have actually been filed. If a divorce case is pending and the parties want to try a collaborative divorce, they must agree to stay or pause the case during the collaborative process.

Collaboration also requires that the parties agree that they will not file any divorce case while the issues in the case are trying to be resolved collaboratively.

Getting Representation for Collaborative Divorce

Both parties can be represented by an attorney, just as they would in court. The attorney you select cannot just be a family law attorney but must be specifically trained in collaborative divorce. Be aware that if an attorney represents you for the collaborative divorce, and the issues are not resolved, that attorney cannot then later represent you in any future divorce case that may be filed. You would have to find and retain a new attorney.

Your attorney is your attorney and is acting on your behalf during the collaborative process. But unlike contested divorce litigation, the goal for the attorneys on both sides isn’t to “win the case,” but rather to work together to find an amicable and agreeable solution that works for all sides. At meetings, each side’s attorney may even speak to the other spouse to get an idea of what he or she wants in the divorce and why.

Just as in mediation, the attorneys for both sides will try to agree on a neutral—a middle person who will help both parties work through the issues and negotiate.

Trying to Get to an Agreement

Both parties must sign an agreement indicating their agreement to participate. The agreement also obligates both parties to honesty, full disclosure of information, and keeping the matters in the collaboration confidential. Confidentiality can be a major benefit—the details of your divorce, while normally public as a publicly filed case in court, are now largely shielded from the public eye.

The parties will then meet to work out the issues. Often, this takes many meetings, but the good thing is that unlike court hearings, which often happen when the judge or your attorney can schedule them, collaborative divorce sessions can often be scheduled around your work or life schedule, adding to the convenience of collaborative divorces.

Other professionals may need to get involved if necessary. For example, if there are tax, immigration, or estate planning issues, complex financial assets, or even mental health professionals who may be needed, these outside experts can be hired to help.

If successful, the collaborative divorce results in the signing of a marital settlement agreement, a parenting plan if there are children, and whatever other documents are needed to facilitate the agreement reached between the parties. After that, one of the attorneys will notify the court that the parties have resolved all issues, and the court will enter the final dissolution of the marriage.

Cost and Time

In most cases, the entire process lasts for less than a year, although that may be much shorter if there are fewer issues involved. You can move as quickly or as slowly as you want, and you are not being rushed to any deposition hearings or trials the way you would in divorce litigation.

Almost every study of collaborative divorces has found that the average cost to the parties is significantly less than that of full-blown contested litigation.

Why the Process Works

Collaborative divorce works because it balances two prevailing interests that almost all divorcing spouses have.

On the one hand, divorcing spouses have real conflicts—even if they aren’t hostile or angry, there are almost always disputes about alimony, time-sharing, or division of property. Parties cannot afford to just “give in” to the other spouse just to avoid litigation.

On the other hand, family law litigation can be expensive and time-consuming. It also puts the decision-making power into the hands of a judge, taking it out of the hands of the parties. Parties would like to work things out easily and stress-free.

In many cases, parties to a divorce may want things that a divorce judge simply is not allowed to grant. For example, a spouse may want the other spouse to sign a confidentiality agreement, modify a will or a trust, allow grandparents rights with a child, or agree to terminate alimony at the occurrence of a given event.

Family court judges cannot grant these kinds of things, legally. But you and your spouse can, if you agree, and collaborative divorce gives you the chance to negotiate other things in your divorce that you couldn’t otherwise get with a judge making the decisions in your case.

Because collaborative divorce has elements of cooperation, honesty, and mutual benefit, the relationship between the divorcing parties may also be much better post-divorce than it otherwise might be.

Collaborative divorce works best when the parties are able to communicate and where there is no history of violence or abuse. It helps if the parties have a “give and take” mentality, whereby they are willing to bend a little to get a little in return for the issues in the divorce.

Is collaborative divorce right for you? Come learn more about it.

Anthony J. Diaz is an experienced family law attorney focusing on Mediation and Collaborative Divorce. His offices are located at 2431 Aloma Ave Suite #124,
Winter Park, FL 32792 and 3720 Suntree Blvd., Suite 103G, Melbourne, FL. 32940.

You may contact Anthony Diaz by calling 407-212-7807 or by email An*****@************aw.com or visit www.AnthonyDiazLaw.com.

And if you found this article helpful, please leave us a review HERE.

Debunking Five Myths About Property Division

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One of the first things that people say when they are going into a divorce is, “I’m going to lose everything,” or, “They will get half of everything I own.”

Myths in divorce

While the division of property is an essential part of a divorce, in Florida, it is not that simple—in fact, a lot of things people believe to be true are not actually true when it comes to the division of property in a divorce. Here are some common myths or misbeliefs about equitable distribution in Florida.

1. If you buy something during the marriage but it is only titled or held in your name, it cannot be divided in your divorce.

This is a myth. Divorce court does not just look at whose name is officially on any title, or which spouse bought an item, or how a bank account is titled. A divorce court cares more about equity—doing what is fair.

Any property can be marital property and, thus, subject to division if it is treated that way.

For example, imagine a wife gets an inheritance from her mother and keeps it in an account in her name. During the marriage, the couple uses that inheritance money to add a room to the marital home, help start the husband’s business, and pay off marital debt.

The wife’s inheritance money has now become marital, subject to division, even though it isn’t titled in the husband’s name or in any bank account with his name on it.

If you want to keep any property (including an inheritance) truly non-marital, it needs to be properly segregated into a separate account and not used for joint marital functions or purposes.

2.  Only assets purchased or acquired while the parties are married can be divided

This is false for the same reason given above. The court does not just look at when the property was acquired (although it is a factor that can be considered by a court when deciding how much of a given asset either party gets).

The fact that property was acquired before marriage may mean that there is a presumption that it is not marital property. But that presumption can easily be lost when the property is commingled with marital assets or used for the benefit of the marriage.

For example, imagine a husband has a business, long before he is married. He gets married, and money from the business helps pay marital bills, and the wife contributes her time to help the business grow, the business pays for the family car, and the couple gives up opportunities, so that the couple can put more money into growing the business.

That business, although formed before the marriage, has now been sufficiently intermixed with the marriage, such that it can now be seen as marital property, subject to division.

Even just part of non-marital property, acquired before marriage, can become marital. For example, an investment that a spouse had before marriage may be nonmarital—but the increase in value of the investment that occurred during the time the parties were married could be considered marital and subject to division.

3.  Everything will be shared or divided evenly

All property in a Florida divorce will be divided fairly (that is, equitably). But that doesn’t mean equal. What is fair may be unequal. The divorce court does not just take every piece of property and divide it in half.

A court will look to both the needs of the parties going forward, as well as their contributions to the asset that helped it exist or appreciate in value. The court will look to which spouse’s labor and working hours, helped the asset appreciate in value.

Property can even be used to balance out other issues in a divorce. So, for example, if the wife needs a significant amount of alimony or other support, and the husband cannot financially provide it, the husband may give up some of his interest in an asset to make up for the inability to pay alimony. Or, if the wife may take on the obligation to pay a lot of marital debt, while the husband may give up more property than he otherwise would have, to compensate the wife for taking on that debt burden.

4.  A gift from one spouse to another cannot be divided

This is generally not true. In some circumstances, it may be. Again, the question is whether the gift truly is for the benefit of only the receiving spouse.

If the husband gets the wife diamond earrings for her birthday, then yes, those earrings could likely be considered a gift for just the wife, and thus, not marital.

But imagine a wife gives her husband a car for his birthday, and the car is used for both spouses to go to work, pick up kids, run errands, etc. Although a gift from wife to husband, the asset is really benefiting both parties, and the marriage in general, and thus, could be subject to division.

5.  You are not liable for debts that your spouse agrees to pay

Let’s not forget that in a divorce, it is not just assets that are divided—debts and liabilities get divided as well. Sometimes, getting the other spouse to be obligated for a debt is as valuable as getting an asset in the marriage.

The problem with saying in, say, a settlement agreement or divorce judgment, “The wife will pay the credit card bill,” is that the creditor doesn’t care what your divorce agreement or mediation agreement or court judgment says. As far as the creditor is concerned, that credit card bill was and still is in both of your names and thus, the creditor can sue either one of you (or both) for that debt.

That means that if you have a debt in your name, and your spouse agrees to pay it in the marital settlement agreement or after mediation, and he doesn’t pay it, the creditor can still come after you—or worse, when it comes to things like mortgages, the creditor can foreclose on the property.

You can certainly take your (now ex) spouse to court to try to get him to pay or to enforce your agreement. But in the meantime, if a creditor comes after you, saying, “my ex was supposed to pay that as part of our divorce agreement,” it will not stop, or serve as a defense, to the creditor’s collection activities.

Anthony J. Diaz is an experienced family law attorney focusing on Mediation and Collaborative Divorce. His offices are located at 2431 Aloma Ave Suite #124, Winter Park, FL. 32792 and 3720 Suntree Blvd., Suite 103G, Melbourne, FL. 32940.

You may contact Anthony Diaz by calling 407-212-7807 or by email an*****@************aw.com or visit anthonydiazlaw.com for more information.

And if you found this article helpful, please leave us a review HERE.

Navigating the Complexities of a High Net Worth Divorce

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In the eyes of the law and in divorce law, we are all treated the same, regardless of how much money we make or how many assets we may have. But that does not mean that all cases are handled the same way. And when it comes to high-net-worth divorces, there can be complexities and legal issues that may not be encountered in other kinds of divorces.

What is High Net Worth?

There is no actual legal definition of what a “high net worth” divorce is. It obviously is a divorce where one or both of the spouses have a higher income or significant assets. But there is no dollar figure where above or below that amount, the divorce is considered officially high net worth.

More Assets, More Discovery

Although it is dangerous to stereotype, it is safe to say that in many high-net-worth divorces, one or both of the spouses will have income that may be generated from a number of different sources. And although, as in any divorce, the parties will have to fill out a complete financial affidavit, in high net divorces, that affidavit often only tells part of the story, financially.

Because of this, high-net-worth divorces may require that the parties do discovery more extensively than what may otherwise be the case.

In a high-net-worth divorce, there often is not just one job, a paycheck, and a single bank account. Rather, there could be income from multiple sources like investments, appreciating real estate, businesses, or intellectual property ownership. Spouses with businesses or other financial investments may have money held in mutual funds, business accounts, PayPal accounts, cryptocurrency, or even overseas bank accounts.

Getting a Value on Assets

Much of what is owned in high-net-worth divorces is not so easy to value.

If someone owns a home, there can certainly be differing views on what the home is worth, but there is a generally accepted range of values for that home.

But in high-net-worth divorces, things like businesses become hard to value. Business valuation requires an expert witness, and there are many different ways to value a business. A business can have more or less worth or value, depending on the methodology used to value it.

Many spouses getting divorced, whose spouses have businesses, will insist that the business is doing well and making plenty of money. But the spouse who owns the business will insist the business is struggling and on its last legs. Getting to the truth of the matter often requires accountants and extensive reviews of corporate and banking records to actually see how the business is doing.

Selling Valuable Assets is Not Easy

Assets in a high-net-worth divorce are often difficult to sell and divide. For example, someone may have a stock or investment (or many), or land or real property.

Sure, the court could just order the investment or property to be liquidated and the profits from the liquidation divided—but what if keeping the asset intact is in the best interest of one of the spouses (or perhaps the children of the marriage)? What if the asset would incur a penalty for liquidation, like a CD, where you can stand to lose a lot of money by cashing out on the CD too soon?

In some cases, assets or property cannot legally be liquidated, such as where a spouse has an interest in an LLC or a partnership, and the corporate documents do not allow the sale (or legal transfer, as in a divorce) of an interest in the business to a third party.

Parties may not even be able to keep an asset even if awarded to them; a spouse may have a one-half interest in the marital yacht, but if that spouse only makes $45,000 a year, that is not enough to keep and maintain that yacht. That spouse may need an asset to be sold to get value from it.

In these kinds of scenarios, the parties may have to work out a payout, leaving one party the asset, and the party that keeps that asset must pay the other spouse what their interest in the asset would be if it was liquidated.

This often happens with real estate, businesses, or intellectual property. It means that these assets must first be fairly valued first, and then, the party keeping the asset, must find a way to pay the other spouse their interest in the asset or property.

Issues With Kids

Division of assets becomes more difficult when there are kids involved. Aside from child support issues, some property may have to be kept to accommodate the kids, regardless of what the spouses want to do with that asset.

For example, if, for some reason, it is in the best interest of the kids to remain with Mom most of the time, those kids may need to remain in the marital home to maintain stability in their lives. That means that the home cannot just be sold, and Dad may not be able to live there, even if he wants to.

Issues like private school, tutoring, summer vacations, and other resources utilized for children of higher-earning families may need to be accommodated in any child support agreement.

When Only One Spouse Has Money

High-net-worth divorces can present different legal issues when only one of the spouses is a high earner. In that case, the spouse without the assets or income will often seek temporary attorney’s fees or temporary alimony or support from the spouse who has the assets.

This is done through a motion with the court that is often heard at or near the commencement of the divorce case. Although temporary support is not final—it can be changed by the final divorce judgment when entered—it can sometimes be an indication of how the entire divorce case will ultimately turn out when it comes to support issues.

Temporary support can make it fair and allow a spouse to hire attorneys to defend their interests—but for the paying spouse, it can increase the cost of the divorce.

In any case where there is an imbalance of assets or income, alimony will also be an issue. Assuming the marriage lasted long enough, courts will usually not allow one spouse to leave the marriage destitute while the other takes their business, real estate, and investments and walks away.

Anthony J. Diaz is an experienced family law attorney focusing on Mediation and Collaborative Divorce. His offices are located at 2431 Aloma Ave Suite #124, Winter Park, FL. 32792 and 3720 Suntree Blvd., Suite 103G, Melbourne, FL. 32940.

You may contact Anthony Diaz by calling 407-212-7807 or by email an*****@************aw.com or visit anthonydiazlaw.com for more information.

And if you found this article helpful, please leave us a review HERE.

Asset Protection: Strategies for Divorce

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One thing that many people, understandably, worry about when they are getting ready to go through a divorce is protecting their assets. While not all assets are divided or split in a divorce, some certainly may be, and that leads people to wonder what strategies they can use pre-divorce, to protect as many assets as they can from being divided.

Asset Protection in Divorce is Different

Remember that asset protection, in the context of a divorce, is different than traditional asset protection that you may do to protect your property from creditors.

The laws that make certain property “exempt” from collections do not necessarily apply to a divorce (at least, not to spousal support obligation); the law may let you shield property from Chase Bank, but it does not want you to hide property from your spouse.

The other thing to remember is that when we talk about asset protection, we are talking about property—not income. In other words, it is one thing to use a strategy to try to ensure that property, like a business, a car, or a boat, is not divided. But that does not mean that your income will be hidden or lowered, income that is often used to determine things like alimony and child support.

Starting Early?

Many asset protection strategies, when planning for divorce, have an inherent contradiction to them. To be effective, many of them need to be established or set up early—long before you file for a divorce. Of course, too long before a divorce, and you may not even be thinking about a divorce, and thus, it may not even dawn on you to start to implement these strategies.

Separating Assets and Property

One strategy is to keep your separate property separate from marital funds, paying marital bills, or buying things for the marriage. If there is truly money you want to protect from division upon divorce, it should be kept in a separate bank account and not used for things that benefit both spouses jointly. This is called “commingling,” and it can turn property or money that is yours and yours alone into property that a divorce court can divide in a divorce.

Using Pre and Post Nuptials

Another strategy is to have a prenuptial or postnuptial. While effective, these two things do have inherent practical problems: If you have not already drafted a prenuptial agreement and you are married, it is too late. You can still do a postnuptial agreement, but that, of course, may signal that you are considering divorcing your spouse.

Protecting Businesses

Smaller businesses may benefit from getting a business valuation. The valuation will give an estimate of what the business is worth.

This can be beneficial because some spouses have an inflated idea of the worth and value of a business. If the valuation comes back with a low value, or even a negative value (some businesses simply are not worth money), it can be a helpful tool for you to negotiate keeping the family business.

Using Trusts

In some situations, putting assets in a trust could be helpful to you. This is usually done with trusts that are irrevocable.

Domestic Asset Protection Trusts and other offshore accounts can be helpful and effective. Offshore accounts are not necessarily automatically shielded from division in a divorce, but they that are hard for spouses to find and difficult for attorneys to collect against if a judgment is entered.

However, with many of these trusts, you do not have ready access to the funds and property put there, so you should be careful about putting money there that you need to access to pay regular, daily expenses.

Tradeoffs of Assets and Debts

One way that you can protect a particular asset that you absolutely cannot bear to part with in a divorce is to make a tradeoff.

For example, if your spouse’s interest in the marital boat is $30,000, and you really want to keep the boat, you could opt to just buy out your spouse for that amount or increase payments to your spouse to pay off that amount over time. You could even “trade” assets—for example, give your spouse 100% of Asset A, and you keep 100% of Asset B.

You can even agree to take on marital debt or your spouse’s debt that normally would be divided in return for keeping certain property. So, if you agreed that you will be responsible for $10,000 worth of debt that would normally be the obligation of your spouse post-divorce, you could then ask to keep an additional $10,000 worth of property to balance that out.

Support and Assets: Be Clear

Some payments and providing of assets to a spouse in a divorce are considered spousal support.

If you agree that your wife will get 50% of a vacation home to aid in her support, then that asset is treated like alimony or child support would. This kind of support gets special treatment in the law; it is almost impossible to wipe out in bankruptcy, and traditional collection protections (exemptions) will not help you avoid paying it. You could even be held in contempt of court for not paying.

If you make sure that division of assets and property is just that—the division of property—and not part of your support to your wife, then financial obligations could, later on, be discharged in bankruptcy if needed. And, those payments would not get the same protections as support would. You would be able to use traditional collection protections as a defense against any collection action.

Negotiating and Settling Can Help

Note that these “give and take” arrangements, such as trades and payoffs over time, are really only possible through negotiation and a settlement reached by the parties inside or outside of mediation. A judge in your family law trial will usually not work out these kinds of arrangements, making an amicable settlement beneficial to you, if you are seeking to keep certain property in your divorce.

Anthony J. Diaz is an experienced family law attorney focusing on Mediation and Collaborative Divorce. His offices are located at 2431 Aloma Ave Suite #124, Winter Park, FL. 32792 and 3720 Suntree Blvd., Suite 103G, Melbourne, FL. 32940.

You may contact Anthony Diaz by calling 407-212-7807 or by email an*****@************aw.com or visit anthonydiazlaw.com for more information.

And if you found this article helpful, please leave us a review HERE.

How to Divide Assets Fairly Through a Divorce Attorney

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There is a common misconception that in a divorce, you will lose half of everything you own to your soon-to-be ex-spouse. People even joke that your spouse will take half, or everything you own will just be divided in two. But this is not exactly how the division of property works in Florida.

What Property Can Be Divided?

Before any discussion or analysis of how property in a divorce is divided, the first step is to establish what property is subject to being divided at all. In Florida, in a divorce, there are two kinds of property: marital property, which is subject to division on and in divorce, and non-marital property, which the divorce court cannot touch, divide, or affect.

Of course, it is hard during a marriage to determine what property is the property of only one spouse; in a marriage, most couples don’t divvy up and segregate their property. Rather, they put their property together, share property and assets, and jointly use property and assets.

As a general rule, non-marital property assets or income is anything that is:

  • Owned by a party from before the marriage, and which is not later commingled, or mixed with marital assets, or
  • Was received by a spouse as a gift from someone other than the other spouse, or
  • Inherited
  • Specifically listed in a prenuptial agreement as being non-marital
  • Derived from or generated from, any other non-marital property

Increases in Value

Sometimes, someone has separate, non-marital property, which increases in value during the course of a marriage.

For example, a husband owns a home before the marriage, and during the marriage, through the money, labor, and efforts of both spouses, the home is maintained, improved, and increases in value. The increase in value of the property would be marital property, while the original value of the home at the time the properties were married would remain non-marital and not subject to division by the divorce court.

Commingling and Mixing

Just because property is non-marital and thus protected from being divided by the divorce court does not mean that it stays that way. That is because of commingling. Often, in a marriage, the couple will intermix marital assets or will use the property for marital purposes. Doing this can convert otherwise non-marital property into marital property.

For example, let’s say that the wife has an inheritance that she solely receives, and she keeps it in a separate bank account in her name only. Later, the husband loses his job, and the couple must use some of the inheritance to keep paying the mortgage.

The inheritance—once solely the wife’s and, thus, non-marital property—has now, potentially, become marital property, given that it was used for a marital purpose: to keep and maintain the family home.

As you can imagine, there can be a lot of fighting between couples in divorce over what is or what is not marital property and whether non-marital property has been commingled such that it becomes marital. If the parties cannot agree at mediation or through settlement, the judge will make that decision.

Dividing Marital Property

Once it is established what property is marital and thus subject to division, the court will then have to determine how the property is divided. Contrary to the popular belief that property is just divided in half, in Florida, this is not the case (it is the case in some other states, but not under Florida law).

Florida law provides for equitable distribution. This means that the court will divide property in whatever way is deemed to be fair and equitable to the parties. Often, this is an equal, 50/50 distribution—but it doesn’t have to be.

The law allows the court to look at things like the contribution to the marriage of the spouses, the economic needs of the parties, or sacrifices made by a party during the marriage. The court can also consider whether a given asset would be more desirable to one spouse over the other.

For example, let’s assume that the husband has a successful business. The wife has never worked a day for the business, but she stayed home to take care of the young children. She has made a sacrifice in her personal income and in her personal career to help raise the kids so that the husband could be successful in the business. In this case, she would certainly have, at the least, equal half ownership of the business upon divorce.

The court can also consider the waste of marital assets within two years of the filing of the divorce. So, for example, if a spouse used marital funds to go on vacations, pay for an affair, or to buy frivolous items, the court can subtract that amount from the share of the marital property that the spouse would have otherwise received.

Actually Paying What is Owed

Some property is not easily divided. Not all property is liquid cash.

For example, if the husband and wife are both entitled to half of a million-dollar business, the business may not actually have $500,000 sitting in an account waiting to be distributed. The same is true for real estate—it may have a value, but that does not mean the value is sitting in a bank account ready for immediate payment.

The property or the business could be sold, but that would not be helpful to either spouse.

So, the court can “offset” what is owed to one spouse in equitable distribution, by giving the other spouse more of another asset. Additionally, parties can be ordered by a court to make payments, or additional alimony, to compensate the other spouse for his or her value in marital property that cannot easily be divided.

Questions about what will happen to your property in a Florida divorce?

Anthony J. Diaz is an experienced family law attorney focusing on Mediation and Collaborative Divorce. His offices are located at 2431 Aloma Ave Suite #124, Winter Park, FL. 32792 and 3720 Suntree Blvd., Suite 103G, Melbourne, FL. 32940.

You may contact Anthony Diaz by calling 407-212-7807 or by email an*****@************aw.com or visit anthonydiazlaw.com for more information.

And if you found this article helpful, please leave us a review HERE.