In almost every dissolution of marriage case, the parties will need to consider the distribution of assets and debts as part of the dissolution process. In Florida, this is called “equitable distribution.” Equitable distribution is where each asset and debt owned by either party is classified as a non-marital or marital asset, valued and then distributed to one of the parties.
First, the Court will classify each asset as either non-marital or marital in nature. The Court will set aside to each party any non-marital assets, such as assets acquired prior to the marriage or through inheritance. These non-marital assets will not be included as part of the overall distribution scheme, other than to be distributed to the owner.
Next, the Court will distribute marital assets and debts. The Court will begin with the premise that the overall distribution of assets and debts should be equal and frequently the distribution is equal. There are a number of factors that the Court can consider in making an unequal distribution, such as contribution of each spouse to the marriage, the economic circumstances of the parties, the duration of the marriage, among other factors. While the statute references a number of reasons why the Court can order an unequal distribution, in practice, the distribution is equal most of the time.
As part of the process of distributing assets and debts, the Court will need to value each asset. While this seems simple, it may not be as easy as it sounds. The Court will need to pick a valuation date which may be the date the petition was filed or the date of trial or some other date. An asset such as a bank account can be easily valued as of a particular date. However, other assets may not be easily valued at a particular point in time.
Another issue is that some assets may just be difficult to value, such as a small business. A small business should be valued for purposes of equitable distribution but there are certain factors that can be considered and others that are not important when valuing the asset in a dissolution of marriage case. The value of a small business should be considered apart from the worker spouse’s contribution to the business on an ongoing basis. In other words, the value of the business should take out the labor required by the worker spouse or else the other spouse would benefit from the continued labor of the worker spouse. Therefore, there may be times when a party has a small business and earns a good income but the value of the business would be zero for purposes of a dissolution of marriage case.
These are only some of the issues that could affect the distribution of assets and debts in your case. A mistake in distributing assets and debts could be costly. Contact one of our experienced attorneys at the Law Office of Silverman, Vorhis & Mack at (352) 337-8373 for more information about this topic specific to your case.