Understanding Equitable Distribution in Dissolution of Marriage

Florida is an ‘equitable distribution’ state when it comes to dividing marital assets in a divorce. That means that while assets are divided equitably, that does not always mean a 50/50 split. Essentially, the Court makes decisions about what is fair, and fair is not necessarily equal.

What is the Difference Between Marital and Nonmarital Assets?

When you go through a divorce, the Court will only divide your marital assets if you and your spouse cannot come to an agreement through mediation or through your respective counsel. Your nonmarital assets will not generally be affected, but they may be considered in limited circumstances. Distinguishing what is marital and nonmarital is an essential first step.

Your marital assets include virtually everything that you acquired or accrued after the date of marriage, including your real property, personal property, intangible personal property, and anything that can be assessed a value. Common examples are included in §61.075(6), Florida Statutes:

  • Retirement accounts, pensions, profit-sharing plans, annuities, deferred compensation plans, and insurance plans and programs
  • Real estate held jointly
  • Intellectual property
  • Bank accounts
  • Accrued sick and vacation pay
  • Stock options
  • Business interests
  • Personal property (like jewelry, cars, artwork or furnishings)
  • The enhancement in value and appreciation of nonmarital assets resulting from the efforts of either party during the marriage or from the contribution to or expenditure thereon of marital funds or other forms of marital assets or both
  • Interspousal gifts during the marriage

All of these assets are deemed marital if acquired or accrued during the marriage. However, if you brought the assets into the relationship, it is considered your separate nonmarital property if title was not changed to include the new spouse. Certain inherited assets and gifts may not be considered marital property as well, so long as they are not commingled with marital assets.

The same designations apply to debts and liabilities (including loans, mortgages, lines of credit, credit cards, etc.).  As with assets, the parties must identify and classify all of the debts incurred as either marital or nonmarital. The court will then determine which party will be responsible for repaying specific marital debts.

A valuation must be assigned to each asset. The court may also consider marital misconduct in dividing assets, including situations where shared funds were used in an extramarital affair, were used to support a drug addiction or were gambled away.  The Court may consider the foregoing when determining an unequal distribution of assets and debts. Other factors will include things like:

  • Contributions to the marriage
  • Economic situations of both parties
  • The length of the marriage
  • Contribution of the spouse to the professional or academic career of the other spouse
  • Contributions of each spouse to acquire property or incur liabilities
  • Desirability of maintaining any specific asset for either spouse (such as interest in a business, a corporation, or professional practice, intact and free from any claim or interference by the other party)
  • The contribution of each spouse to the acquisition, enhancement, and production of income or the improvement of, or the incurring of liabilities to, both the marital assets and the nonmarital assets of the parties.
  • The desirability of retaining the marital home as a residence for any dependent child of the marriage, or any other party, when it would be equitable to do so, it is in the best interest of the child or that party, and it is financially feasible for the parties to maintain the residence until the child is emancipated or until exclusive possession is otherwise terminated by a court of competent jurisdiction. In making this determination, the court shall first determine if it would be in the best interest of the dependent child to remain in the marital home; and, if not, whether other equities would be served by giving any other party exclusive use and possession of the marital home.
  • The intentional dissipation, waste, depletion, or destruction of marital assets after the filing of the petition or within 2 years prior to the filing of the petition.
  • Any other factors necessary to do equity and justice between the parties.

Although equitable distribution may seem systematic, the Court actually has a considerable amount of discretion in distributing assets and debts. To avoid the Court determining who gets what, when, where and how, it is always best to come to an amicable resolution at mediation.  If that cannot be accomplished, the parties are typically subject to an someone else (the Judge) determining what happens in their lives. Marital Settlement Agreements limit the Court’s ability to simply enforce the statute, without a full understanding of the importance of the particular asset to each spouse.  Here at McKINNON LEGAL we understand this aspect and work with cases with similar issues on a daily basis. Let us guide you through your options when it comes to equitable distribution. Contact McKINNON LEGAL for more information today.