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Using Marital Assets to Pay for Obligations on Non-Marital Assets in Florida

checkbookIn many divorce cases, one of the key areas to resolve is equitable distribution. In some marriages, the couple may have a mixture of marital assets, non-marital assets, and maybe non-marital assets that were improved or acquired in part by using marital funds. Reaching a conclusion on equitable distribution can be very complex and is yet another example of where the experience of knowledgeable Florida divorce attorneys can help. One Tampa-area case involved just such a complication when the couple had used marital funds to pay the mortgage on a non-marital asset.

In this case, the wife, Bridgett, owned one-half of a duplex. That asset was the wife’s non-marital property. During the marriage, the couple paid $350 of marital funds toward the duplex’s mortgage from November 2004 until the wife’s half of the duplex was destroyed by fire in November 2006.

Sometime later, Bridgett and her husband, Ricky, divorced. During the divorce hearing, the husband sought credit for the duplex mortgage payments in calculating the couple’s equitable distribution. The trial judge agreed with the husband and gave him dollar-for-dollar credit for the full amount of the 24 mortgage payments made on the duplex during the marriage.

The wife appealed, and she won. She did not succeed because the husband was not entitled to credit for the payments in terms of assessing equitable distribution; he was. The problem was that the trial court’s method for assessing the amount of credit was wrong. The law does not entitle a spouse to dollar-for-dollar credit in situations like this. Instead, Florida law says that the spouse is entitled to a credit that is equal to “the amount by which the use of marital funds to pay down the mortgage reduced the indebtedness on the” asset. Since the amount of reduction of indebtedness on the duplex’s mortgage was probably some amount smaller than the full $8,400 (24 payments of $350 each), the credit Ricky got in his case was too much.

Based upon the appeals court’s opinion, there is no indication that the duplex was the couple’s marital home or that Ricky was ever added to the property deed. Nevertheless, cases like this can also serve as useful reminders about real estate that one spouse brings into a marriage as a non-marital asset. Florida law has a very strong presumption in favor of finding that assets owned by both spouses as “tenants by the entirety” are marital assets, regardless of how long you owned the assets prior to the marriage. This means that, if you want to keep a piece of real estate as your separate property, it typically is very important not to add your spouse to the deed.

When you are going through a divorce, there may be many issues that are involved in your case. These issues may include equitable distribution, alimony, child custody, child support, and other things. Whichever issues are involved in your divorce, the skilled South Florida equitable distribution attorneys at Sandy T. Fox, P.A. are here to help. Our team has been helping families with their family law issues for many years. Contact our attorneys online or by calling (800) 596-0579 to schedule your confidential consultation.

More blog posts:

Equalizing Payments, Marital Home Quit Claim Deeds, Equitable Distribution, and Your Florida Divorce Case, Fort Lauderdale Divorce Lawyer Blog, May 18, 2017

Equitable Distribution in Florida and a Non-Marital Asset Maintained or Improved Using Marital Assets, Fort Lauderdale Divorce Lawyer Blog, Dec. 7, 2016

Photo Credit: Gadini, [CC0 License], via Pixabay