Archive for the ‘Property Division’ Category
What Constitutes Separate Property?
Friday, February 10th, 2012Courts in those states which abide by community property laws tend to be a bit more consistent in their decisions to leave separate property with the party who owns it while equitable distribution states offer a certain degree of leeway when dealing with separate property.
What is Considered Separate Property?
Any property you owned prior to your marriage is essentially considered community property, as is any property you have acquired during the marriage by virtue of a gift or inheritance meant solely for you. An example of this would be if your parents gave you money with the explicit instructions that the money would be placed in a separate bank account and was meant only for you. Any income which comes as a result of a gift or an inheritance meant solely for one party in the marriage is also considered separate property.
Any property or other assets acquired during your marriage, but bought with your sole and separate gift or inheritance also becomes separate property. Finally, any earnings, gains or winnings received following your legal date of separation are considered separate property. If you and your spouse have made the decision to divorce and have either filed initial separation or divorce papers, then you happened to win the state lottery after that date, the money you won would be considered separate property–much to the likely dismay of your spouse. Some states count the date of separation simply as the date both parties decided to terminate their marriage or when one spouse moved out of the marital home. However both these dates are extremely subjective and could be challenged in court, so if you expect any glitches regarding your separate property, be sure to make your separation legal.
Separate Property Unless…
These basic rules of separate property apply only as long as you keep the property you brought to the marriage or property you acquired during the marriage as the result of a gift or inheritance entirely in your name. Should you mix this property with marital or community property, then it becomes part of your marital property. Should you receive a sum of money from Great Aunt Hazel intended solely for your use, it is, indeed separate property.
However, if you put this money into your joint bank account, it has then become commingled and is now part of your marital property rather than your separate property. The same goes for anything you brought into the marriage, whether in the form of property, vehicles or money. As long as you keep those things firmly in your name only, they do not become part of the marital property, but should you add your spouse’s name to your car title, property title or bank account, you have just turned your separate property into marital property.
What if My Spouse Gives Me a Gift?
If, during your marriage, your spouse makes you a gift of, say, a cabin in Colorado, and it is in your name only, then it will be considered separate property. However, if he makes you the same “gift” of the cabin, however both your names are on the title, the property taxes, insurance, etc., then should you divorce you would have a hard time proving he gave you the cabin, especially if he denies it. Note that during a divorce you and your spouse are perfectly free to completely ignore the legalities of separate and marital property, making any division you see fit so long as you both agree, and it appears relatively fair to both parties. Should you have any doubts regarding whether your separate property will remain so during your divorce, contact an experienced divorce attorney early on in the process who can ensure you are able to keep property that is not a marital asset.
If you or someone you love is considering filing for divorce, we can explain your rights and guide you through the appropriate divorce process. At Eric N. Klein & Associates, P.A., our Fort Lauderdale divorce attorneys are dedicated to providing the legal help our clients need. To learn more about what we may be able to do for you, contact us today by calling 954-580-8080.
The Interplay between Alimony and Property Division
Thursday, May 26th, 2011While the issues of alimony and property division in a Florida divorce are independent issues, they are inter-related and the resolution of one issue can impact the other. This is an important reason to seek the advice and representation of an experienced family law attorney who understands how the resolution of property and debt division may impact spousal support orders both in terms of the amount of spousal support ordered and the duration of the obligation to pay such support. The case of Hamlet v. Hamlet, 583 So. 2d 654 (Fla. 1991) provides an illustration of how the type of property allocated between the parties to a divorce can effect spousal support orders.
In the Hamlet case, the wife appealed a judgment that she was not entitled to periodic alimony payments because the court made an equitable distribution of substantial assets from the marriage. The wife never worked during the marriage, and the husband owned a lucrative computer business. The Florida Supreme Court held that permanent periodic alimony was proper even though the property was equitably split. Florida’s highest court emphasized alimony balanced the inequities that resulted from the allocation of income-generating properties that were acquired during the marriage. Because the husband was awarded a disproportionate amount of the property that generated ongoing income, this was an important consideration in upholding ongoing alimony.
The court found the trial court did not abuse its discretion in awarding permanent periodic alimony, especially because the wife’s earning capacity was diminished due to the time she spent on raising children. The court approved the spousal support order to the wife because alimony balanced the inequities that resulted from petitioner’s lack of earning capacity, which was based upon her decision to stay home and raise the children during the marriage.
Permanent periodic alimony is used to provide the needs and the necessities of life to a former spouse as they have been established during the marriage. The two primary elements to be considered when determining spousal support are the needs of one spouse for the funds and the ability of the other spouse to provide the necessary funds.
The criteria that is used in establishing this need include the parties’ earning ability, age, health, education, the duration of the marriage, the standard of living that is enjoyed during its course, and the value of the parties’ estates. While permanent periodic alimony is most commonly used to provide support, in limited circumstances its use can be appropriate to balance such inequities as might result from the allocation of income-generating properties that are acquired during the marriage. Because the wife did not receive properties that would generate ongoing income, the alimony order was appropriate.
Our Fort Lauderdale divorce attorneys at Eric N. Klein & Associates, P.A. represent clients throughout Florida in alimony disputes so call us at 954-580-8080.
Florida Divorce: Distribution of Property and Liabilities 101
Monday, May 23rd, 2011Property distribution in Florida will follow an equitable distribution of all marital assets and equitable allocation of marital liabilities. Property and debt distribution begins with the premise that distribution should be equal, but will not always end with equal distribution if the court finds justification that unequal distribution is required to balance the equities for both parties.
Marital assets and liabilities include all assets and liabilities, incurred either individually or jointly, the enhancement in value and appreciation of non-marital assets, inter-spousal gifts, and all vested and non-vested benefits such as retirement plans as well as rights and funds accrued during the marriage. Property acquired before or during a marriage shall be presumed to be a marital asset, and any party claiming such property to be separate will have the burden to prove that such property is non-marital. Other marital property includes personal property titled jointly by the parties as tenants by the entireties. Benefits, rights and funds that will also be subject to equitable distribution include retirement, pension, profit sharing, annuity, deferred compensation, and insurance plans.
Marital property and liabilities will be equitably distributed to each party. Distribution will depend on a number of factors, such as each spouse’s contribution to the marriage; the economic circumstances of the parties; the duration of the marriage; whether one party desires to retain an asset intact and free from claim or interference by the other; the contributions made by each spouse to the acquisition, enhancement, and production of income or improvement, of marital assets and non-marital assets to the other; intentional dissipation of assets; the desirability of retaining the family home as a residence for any dependent child or any other factors that would justify an unequal distribution.
In a marital dissolution, liabilities incurred during the marriage will also be divided between the parties, whether incurred individually or jointly. Marital liabilities will be allocated to each party and distributed in the same manner as property distribution. Examples of marital liabilities include any obligations including credit cards and loans incurred during the marriage. Liabilities incurred prior to marriage are also presumed marital liabilities until rebuttal. Generally, liabilities incurred by either spouse prior to the marriage will usually be charged to that spouse as a separate liability within the framework of a distribution of all assets and debts both marital and separate.
Distribution will require the identification and valuation of all marital assets. The court will designate which spouse will be entitled to the respective asset. The court must find good cause to allow an interim partial distribution while the dissolution is pending, such as temporary possession of the family residence. A party desiring an interim partial distribution must demonstrate good cause that merits interim partial distribution. Interim partial distribution will also be considered when the court decides upon the final allocation of marital assets and liabilities.
In effect, each party has the burden of proof when establishing that an asset or debt is separate from marital assets and liabilities. When all marital property and liabilities are established, the court will require valuation, and equitably distribute or allocate all assets and liabilities. A monetary payment may be required in lieu of equitable distribution or to effectuate an equitable distribution.
A Fort Lauderdale divorce lawyer from our law firm can assess your situation and advise you about the best strategy for resolving your property and debt distribution issues in your divorce. We offer a free initial case evaluation so contact us today!
Property Issues and the Family Residence in a Florida Divorce
Wednesday, April 27th, 2011There are two different legal approaches used to divide marital property in a divorce including interests in the family home. Some states like Florida use an “equitable property” approach while others use a “community property” approach. In both types of states, property generally is divided into separate and marital property. Separate property is generally retained by the spouse who acquired the property. Separate property typically includes:
- Property acquired by either party before the marriage
- Property acquired by gift or inheritance
- Appreciation in value and proceeds from assets that would be separate property
Marital property typically includes property acquired during the marriage that is not acquired by gift or inheritance. The equitable distribution of property differs from division of property in community property states because marital property is not necessarily divided 50-50 but will depend on what the judge deems fair and equitable based on several factors. These include such factors as contributions to the marriage, economic circumstances of each spouse, the duration of the marriage, interruptions of personal careers or educational opportunities or the contributions of one spouse to the personal career or educational opportunities to the other spouse. (See Florida Statute 61.075). The Florida Statute expressly states that “any factors necessary to do equity and justice between the parties” will be the deciding factors in determinations regarding the division of marital property.
Property division issues related to the sale and division of interests of your family home may be reached by agreement and included in a marital settlement agreement or by the court as part of the distribution of property. There are a number of dispositions that are common with a family residence including:
- Sale and division of the proceeds
- One party living in the family home as part of a spousal support or property division settlement
- A delayed sale at some later point in time with the proceeds divided
- One party buying out the other as part of the property division often set off against the interest in the other party’s retirement plan
There are a number of common setoffs that may apply to the division of interest in the family home. Many times a parent with primary physical custody of the minor children will be granted “exclusive use and possession” of the family residence. The use of the family residence will often be offset against other marital property. Other factors that may be considered in determining an equitable distribution of interests in the family home include sources of income, earning capacities, educational and vocational levels, and responsibilities to any minor or dependent child.
Possession of the family home for the purposes of maintaining a family home within the child’s best interests would also affect support issues when taking into account alimony, mortgages or taxes and other expenses. Division of the interests in the family home will depend on what the judge decides is fair and equitable with all assets and liabilities included in this analysis. This division can be complex because there may be mixed assets that have both separate and marital property interests. This is particularly common with assets that include contributions over long periods of time like the family home or a deferred compensation plan (401K or pension). These assets may exist before the marriage as separate property but become assets with both a separate and marital property interest because income or other assets acquired during the marriage are used to maintain the asset.
The process of dividing the interest in the family home or determining how the home will be handled in a divorce can be complicated. When you and your spouse do not agree, these challenges can be even more difficult. Our experienced Ft. Lauderdale divorce attorneys can help you resolve these disputes and develop a workable and plan.
We provide an initial no obligation free Florida divorce consultation.
If you or someone you love is considering filing for divorce, or has any other family-law-related needs, the Fort Lauderdale divorce attorneys of Eric N. Klein & Associates, P.A. may be able to help. To discuss your needs with us in detail and learn more about what we may be able to do for you, please contact us today by calling 954-580-8080.
Common Property Division Issues in a Ft. Lauderdale Divorce Case
Wednesday, April 20th, 2011The division of assets in debts in a divorce can be critical to one’s ability to rebuild and start over after a judgment of divorce is final. If a spouse comes through a divorce and does not obtain a fair division of the marital estate, it can make the transition to life as a single person much more difficult. An inappropriate allocation of marital debt can mean that one party is saddled with financial obligations that make re-establishing financial security virtually impossible. It might seem on the surface that dividing assets and debts fairly in a divorce should be reasonably straightforward, but this is frequently not the case. This article is designed to provide a brief introduction to some common property division issues that often arise in a Florida divorce.
Division of Retirement Plan or 401K: A division of a retirement plan or 401K can be completely meaningless without a Qualified Domestic Relations Order (QDRO) that directs the plan provider on how to divide the parties’ interest in the plan. If this is not done properly, the plan may simply pay all of the proceeds to the spouse whose name is on the plan. While a spouse who does not receive their share can always take their former spouse back to court. This can be costly not to mention ineffective. The spouse who the proceeds were paid to may have already spent the funds making the process of collecting difficult if not impossible. Drafting a QDRO is very complex and valuing a pension plan (or 401K) is complicated so it is critical to have the assistance of an experienced Florida family law attorney.
Assignment of Debt: Almost every divorce involves assignment of certain debts to one spouse or the other. This allocation of liabilities is an important component of an overall fair division of the marital property. However, sometimes this division of debts does not work out the way the party who is supposed to be free of the obligation anticipates. If both spouses are on a loan or credit card together, any assignment of the debt to a particular spouse in no way impedes the creditors ability to pursue collection and enforcement of the debt against either or both parties. By way of example, you might agree that a $25,000 loan obligation is to be assigned to your spouse in exchange for your spouse keeping all of his or her retirement plan. The problem is that if your spouse defaults on the loan or is unable to pay, the debtor can and typically will pursue you for the debt. This can result in you losing out on the share you were entitled to from your spouse’s pension and facing a wage garnishment or bank levy from the loan company. An experienced Florida divorce attorney will carefully examine how financial obligations are held and who is obligated to avoid traps like these.
Hidden or Diverted Assets: The problem of hidden assets is common especially where one spouse handled all financial matters during the marriage or ran a family business. There are still many marriages where there is a fairly uneven balance of economic power between the spouses. The spouse that controls the family finances and/or runs a family business may be in a position to hide assets, divert income or transfer income secretly for less than fair market value in sham transactions. A spouse who has little knowledge of family financial affairs can be at a huge disadvantage in trying to prove such unreasonable tactics and obtain a fair division of property. Our experienced Florida divorce attorneys will use the discovery process and may even employ the services of forensic accountants where necessary to expose this type of dishonesty. We will work diligently to expose such tactics and may even ask the court to punish a spouse that engages in conduct designed to prevent a fair and equitable division for property. A court may award all of a particular asset to the spouse who has been victimized or make an attorney fee award as a remedy for such conduct.
Failure to Comply with Court Orders Regarding Property Division: Even when everything is done correctly during the divorce, your former spouse may still frustrate the court’s property division orders by refusing to take action that is required. A judgment of divorce may provide for one spouse agreeing to sell real property, such as the family residence, and divide the proceeds at some point in the future. If the spouse refuses to comply with the court’s order, it may be necessary to initiate contempt proceedings to force the other party to comply with the court’s orders. If you are forced to bring contempt proceedings to force your spouse to comply with court orders on the division of property, the court will often order the other party to pay your attorney’s fees if you prevail.
These are just a few of the common complications that may arise involving property and debt division in a Florida divorce. If you have no children and virtually no property or debts, there may be inexpensive alternatives to a traditional contested divorce. However, many couples particularly those that are affluent or have been together for many years may face these complications in dividing the marital estate or a multitude of other problems like these. Our aggressive Ft. Lauderdale divorce attorneys will help protect your interest and advise you so that you have a better idea of what you are entitled to receive.
We provide an initial no obligation free Florida divorce consultation.
If you or someone you love is considering filing for divorce in Ft. Lauderdale, Florida, or has any other family-law-related needs, the Fort Lauderdale divorce attorneys of Eric N. Klein & Associates, P.A. may be able to help. To discuss your needs with us in detail and learn more about what we may be able to do for you, please contact us today by calling 954-580-8080.
