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Equitable Distribution in Florida and a Non-Marital Asset Maintained or Improved Using Marital Assets

painting wall When you are going through a divorce, especially one without a minor child of the marriage, one of the most important issues to resolve may be equitable distribution. While equitable distribution may be fairly straightforward in cases in which every asset is clearly marital or non-marital, many divorces and equitable distributions are more complex. In one recent case decided by the Fifth District Court of Appeal, the court was called upon to address a case in which the couple’s home was the wife’s non-marital property, but the property had appreciated in part due to improvements made using marital funds. In this case, the trial court’s decision to credit 50% of the marital portion of the appreciation to the husband was improper when the court also gave the home 100% to the wife.

G.H. (husband) and A.H. (wife) were a Florida couple who divorced in Marion County. One of the major issues in the case revolved around equitable distribution, particularly in relation to the home the couple shared. The home was property that the wife had purchased by herself nine years before the husband and she married. The couple lived in the home during their marriage. While married, they used marital money to install a new roof, a new air conditioning system, and new kitchen appliances, and to remodel the garage.

Once the couple filed for divorce, the husband agreed that the wife should get the house as an item of her non-marital property. What the husband did oppose, however, was the way that the court dealt with the appreciation of the house. After all the improvements the couple made to the house, it had appreciated in value by more than $45,800. The court decided that $35,000 of this appreciation was a non-marital asset of the wife. Regarding the remaining $10,800, though, the court determined that the spouses benefited equally and assigned each spouse an asset value of $5,400, even though the court also awarded the wife sole ownership and possession of the home.

The husband appealed this method of equitable distribution, and he won. In ruling for the husband, the court noted that the issues in this husband’s case were very similar to a previous equitable distribution case decided by the Florida Supreme Court in 2010. In that case, the husband bought the home before marrying the wife. The couple lived in the home throughout their marriage, making many improvements during the marriage’s 27-year duration. In that case, the court announced that “principles of equity do not allow an owner spouse to receive the full benefit of the passive appreciation when the nonowner spouse contributed to the property.”

This case was similar. By giving the wife 100% ownership of the house but only crediting her with 50% of the appreciation, it did not create a truly equitable distribution. There were two options that the trial court could have used that would have been fair. The court could have ordered the wife to pay the husband an amount equal to 50% of the marital portion of the house’s appreciation, or else it should have credited the wife with the full 100% of the marital portion of the appreciation in crafting the equitable distribution.

This may sound very technical and minute, but these distinctions matter. In this case, the husband’s victory on appeal meant that he was entitled to an additional $5,400 in cash or other assets from the marital estate. In the 2010 Supreme Court case, that number was closer to $18,000, and, in your case, the amount in dispute could be even greater than that.

In order to place yourself in a strong position to get a fair equitable distribution, you need counsel on your side who is knowledgeable in these types of divorce cases. The South Florida property division attorneys at Sandy T. Fox, P.A. have handled a wide array of divorce cases over the years and have extensive experience in equitable distribution issues. Contact our attorneys online or by calling (800) 596-0579 to schedule your confidential consultation.

More blog posts:

Abolition of ‘Special Equity’ Law Wipes Out Unequal Distribution in Favor of Florida Wife, Fort Lauderdale Divorce Lawyer Blog, Nov. 23, 2016

Florida Trial Court’s Double Hit of Income Tax Consequences Leads to Reversal of Equitable Distribution, Fort Lauderdale Divorce Lawyer Blog, July 13, 2016