Splitting up and moving forward with divorce is already stressful and confusing, financials and dividing assets and liabilities only adds to the stress and confusion. When it comes to division of marital assets and liabilities, Florida requires an equitable split of marital assets during a divorce, and therefore, you need to understand how it works and how the process will affect you.
WHAT IS EQUITABLE DISTRIBUTION?
Florida Statute 61.075 governs the equitable distribution of marital assets and liabilities in a divorce. More specifically, the statute states that “the Court shall set apart to each spouse that spouse’s nonmarital assets and liabilities, and in distributing the marital assets and liabilities between the parties, the court must begin with the premise that the distribution should be equal, unless there is a justification for an unequal distribution based on all relevant factors.”
WHAT IS CONSIDERED A MARITAL ASSET AND LIABILITY?
There is no clear cut deifitniion for what the courts consider a marital asset or liability when it comes to a divorce. However, Florida statute generally states that “marital assets and liabilities are assets acquired and liabilities incurred during the marriage, individually by either spouse or jointly by them.” Yet, there are many exceptions including “enhancement in value and appreciation of nonmarital assets or even thepaydown of principal of a note and mortgage secured by nonmarital real property.”
When thinking about dividing the assets and liabilities during a divorce, there are five key things to consider.
The Date of Valuation – This means, what date are we using to evaluate the assets? Typically, this can be the date of the divorce petition, or you can use another agreed-upon date. This all depends on the type of asset and is worthy of at length discussion with your attorney.
The Value of Assets and Liabilities – Here, we need to determine the value of each asset and liability. For items such as bank accounts and credit cards, the last statement date is typically used. For something like items such as cars and real estate, the spouses may agree on a value or use an appraiser to evaluate the property.
Who Gets What – This is typically the biggest question parties often have – who will receive each asset? Typically, the marital estate is split down the middle, and each spouse will get 50% of the value. Sometimes one spouse may keep an asset, and the other will receive half of the value. It all depends on several factors including the parties’ desires and factors enumerated in the law.
The Balance Sheet – Florida law requires that each spouse get 50% of the marital assets and liabilities in a divorce. So, anything that is co-owned or co-borrowed will be split between both parties. The balance sheet is used to determine all the figures. This is a significant point of discussion to have with your attorney to ensure that all factors are taken into account within the balance sheet.
Does Anyone Owe an Equalizing Payment? – Spouses are usually the ones to decide who will keep each of the assets and who will be bought out. For example, a recent client who got divorced chose to keep his house. He then owed his ex-spouse 1/2 of the real estate value, which he paid to her over two years. These equalizing payments may be paid from other assets, outright or overtime. Whatever the couple decides is how the agreement will be written.
Questions About Assets and Liabilities?
As you see, there is no clear cut rules when it comes to dividing your marital estate which is why it is so important to have an experienced legal team on your side. If you have any questions about how assets and liabilities are calculated or divided during a divorce or any general questions about the divorce process itself, contact Yaffa Family Law Group today for a free consultation.