Equitable Distribution of Property in Florida
What is Equitable Distribution in Florida?
“Equitable distribution” refers to the way that spouses in Florida divide their property and debts in a divorce. While some states have community property rules requiring an exactly equal division of marital property and debts, most states require only an “equitable” or fair division. Florida law requires an equitable division but also states that in most cases equitable means equal.
What is Separate Property in Florida?
Before dividing property, a couple must determine whether either spouse owns any of the property separately. Separate, or “non-marital,” property is not subject to division in divorce. Property is separate if one spouse owned it before marriage or acquired it during marriage as a gift (not including gifts from the other spouse) or by inheritance. Separate property also includes:
- assets and debts a couple defines as separate property in a valid written agreement (a premarital agreement, for example)
- income from separate property, unless the spouses have treated the income as marital property, by “commingling” it, for example (see below), and
- items exchanged for or purchased with separate property.
What is Marital Property in Florida?
Unless a couple has a valid written agreement stating otherwise, marital property in Florida includes all assets and debts either spouse acquires during the marriage. It doesn’t matter if the property or debt is titled jointly or is only in one spouse’s name. For example, if your spouse opens a credit card account and your name is not on it, you are still jointly responsible for the charges on the card, even if your spouse did all the spending (unless a court finds that your spouse wasted assets, for example, if the spending was reckless - see discussion below).
Assets include money, property, and benefits such as retirement accounts, deferred compensation, or profit-sharing. Benefits are marital property whether they are “vested” or not (meaning whether the right to receive the benefits is absolute or depends on some future condition, such as continuing to work for a certain number of additional years). If you or your spouse accrued benefits both before and during marriage, you may need to consult an attorney to find out what portion is marital property. You may also need an opinion about the value of the benefits from a financial advisor.
A spouse can change separate property into marital property (essentially making a gift of separate property to the other spouse) by changing the title into a form of joint ownership. A Florida court will presume that any property a couple owns as “tenants by the entireties” is marital property, even if one spouse acquired the property separately before marriage. Convincing a court to treat such property as separate will be difficult, if not impossible.
The increase in value of separate property during the marriage is also marital property if it resulted from the contribution of marital funds or the active efforts of either spouse. This includes efforts such as maintaining a home, or working in a business.
A spouse can also make a gift of separate property to the marriage by mixing it with marital property—sometimes called “commingling.” There are many ways this can happen—depositing marital funds into a premarital bank account, for example, or paying the mortgage on a separate property with marital earnings. In this kind of situation, a court might treat all of the property as marital. The spouse claiming that part of the property is separate would have to trace the separate source of the funds using detailed financial records. These situations can be very complicated and usually require the assistance of an attorney.
How is Property Divided?
Couples can make their own agreements about dividing property either on their own or with the help of a mediator. Courts generally uphold such agreements as long as they are in writing and each spouse has had an opportunity to consult with an independent attorney. If a couple can’t reach an agreement, an arbitrator or judge will decide. As stated above, assets are usually divided equally; however, the arbitrator or judge can make an unequal division after considering all of the relevant circumstances, including the following:
- the length of the marriage
- each spouse’s overall economic circumstances
- the desirability of allowing the couple's minor children, or either spouse, to continue living in the marital home
- each spouse’s contributions, including improvement of marital or non-marital assets, and contributions to the marriage either as an income-earner or as a parent or homemaker
- whether either spouse interrupted a career or education during the marriage or contributed to the other spouse’s career or education
- each spouse’s debts and liabilities, and
- whether either spouse intentionally wasted or destroyed marital assets either after the divorce petition or within the two years preceding it.
Another factor court's consider is the difficulty of dividing certain assets. For example, in most cases a judge would try to award a business started by one spouse during the marriage entirely to that spouse and award other property or money to the other spouse to make up for the marital interest in the business. A court won’t divide up a home and award each spouse part of it, but might order the couple to sell it and divide the proceeds. If a marital home is the couple’s only major asset, a judge might also order the couple to wait until some future date to sell the home and divide the proceeds, and award one spouse a temporary right to live in the home. This is a particularly common result when the couple has minor children still living in the home.
How are Debts Divided?
Courts also generally divide the value of all marital debt equally, while assigning responsibility for actual payment to one spouse or the other. As with assets, the court has the option of dividing debt unequally if this seems fair under all of the circumstances. If one spouse spent money recklessly and ran up a large amount of debt single-handedly, for example, the court might assign the total amount of that debt to the reckless spouse.
If the court assigns responsibility for payment of a debt to your spouse, remove your name from the account, if possible. Otherwise the creditor might continue to come after you for payment. Contact an attorney if you need assistance.