One significant issue in a dissolution of marriage case is the distribution of assets and debts, referred to in Florida as “equitable distribution.” Equitable distribution is the process where each asset is valued, identified as marital or nonmarital and distributed to one of the parties. Sometimes the parties will agree to the equitable distribution plan while other times the Court will order the plan for equitable distribution. Before distribution, the assets and debts must be classified as either non-marital or marital.
Contact Silverman and Mack, LLC for more information about asset distribution and liability, or to schedule a free consultation with an experienced Gainesville divorce lawyer. We can help you evaluate the overall plan of equitable distribution to provide the best result for your case.
What Are Marital Assets?
Marital assets are divided between the parties “equitably” which usually means equal, but not always. Marital assets are defined as the following.
- Assets acquired and liabilities incurred during the marriage by either spouse or jointly by both spouses
- Enhancement and appreciation of non-marital assets through marital labor or marital funds
- Retirement funds and other related funds acquired during the marriage by either spouse.
- Gifts between the spouses during the marriage
What Are Non-Marital Assets?
Non-marital assets are to be set aside to the owner spouse before marital assets are distributed. Non-marital assets are defined as the following.
- Assets acquired and debts incurred prior to the marriage or assets or liabilities in exchange for those pre-marital assets
- Assets acquired separately by inheritance or gift from a third party to one of the spouses
- Liabilities incurred through fraud
- Assets and debts excluded from marital assets through a written agreement, such as a prenuptial agreement
- Income derived from non-marital assets unless regularly relied upon during the marriage
It is important to note that a party may own an asset in his/her own name individually, but that asset will normally be considered a marital asset if purchased during the marriage.
How Can A Valuation Expert Help Calculate Asset Portions?
While some assets and debts are easily classified as marital or nonmarital, other assets and debts may require a valuation expert to calculate the marital portion of a non-marital asset. One spouse may have a non-marital business because the business was started before the marriage. However, there may be a marital component from increased business value during the marriage by marital efforts or marital funds contributed, including the continued labor of the owner spouse in the business during the marriage. In this situation, a valuation expert would be necessary to value the increase in the business during the marriage from the marital effort.
Additionally, an asset that was non-marital may be mixed with marital funds, causing the asset to lose the non-marital classification. An example would be an inherited bank account (a non-marital asset) that is then transferred into a marital bank account. The non-marital, inherited bank account would lose its non-marital characteristic and the entire bank account would be considered a marital account for purposes of the dissolution of marriage case. While the classification of non-marital or marital assets and debts may be simple in some cases, it is important to hire an experienced family law attorney to help navigate asset requirements.