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 nonmarital 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, nonmarital 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
- Specifically listed in a prenuptial agreement as being non-marital
- Derived from or generated from, any other nonmarital property
Increases in Value
Sometimes, someone has separate, nonmarital 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 nonmarital and not subject to division by the divorce court.
Commingling and Mixing
Just because property is nonmarital 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 nonmarital 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, nonmarital 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 nonmarital 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? An attorney at the Law Firm of Anthony J. Diaz can help. Contact us for questions about the distribution of property in your case.