Abolition of ‘Special Equity’ Law Wipes Out Unequal Distribution in Favor of Florida Wife

When you enter into divorce litigation, there are certain things you know at the outset. One of these is that the law presumes that your spouse and you should split all marital assets 50-50. This presumption is not ironclad, however, since fairness and the law dictate that a 50-50 split is not the proper outcome in all cases. In order to receive an uneven distribution in your case, the law requires your trial judge to make certain findings. In one recent case from the Tampa Bay area, the trial court’s failure to make the obligatory findings led the Second District Court of Appeal to throw out a distribution awarding the wife more than 50% of certain assets.

In this case, the couple was a Pasco County pair who divorced in the summer of 2012 after less than three years of marriage. As part of the divorce litigation, the court ordered the couple to sell their marital home. They did so and netted a six-figure profit in the process. In dividing up this profit, the trial judge awarded the wife $70,000 and the husband $40,000. The court explained that the wife got $30,000 more because she took out a $30,000 loan against her 401(k) in order to help fund the $90,000 down payment the couple paid on the house, so that 401(k) loan gave her $30,000 in special equity.

The husband appealed and was successful. Even though all of the underlying findings that supported the trial court’s award of $30,000 to the wife in special equity were correct, the award was nevertheless not allowed. Prior to 2008, the law allowed judges to grant awards of special equity “in recognition of his or her contribution of premarital funds to the acquisition of that property.” In 2008, the legislature changed the law and abolished all awards of special equity. After the change in the law, the new statute required parties to pursue, instead of special equity, claims for unequal distribution of marital assets.

Section 61.075 of the Florida Statutes governs all claims for unequal distribution of marital assets. That statute instructs courts to begin with a presumption that the spouses should receive an equal distribution of all marital assets. The statute goes on to list 10 factors the trial judge must consider to decide if an unequal distribution is proper. In this couple’s case, the trial judge never performed the 10-factor analysis that is set out in Section 61.075, so the appeals court could not possibly uphold an award that gave the wife 63% of a marital asset and the husband 37%.

The appellate ruling in favor of the husband did not necessarily mean that he was entitled to receive 50% of the sale proceeds, though. The ruling in his favor simply meant that the case went back to the trial court and that the trial court, before imposing an unequal distribution, was required to make findings regarding the satisfaction of each of the 10 factors listed in Section 61.075.

The ruling also threw out the distribution of the couple’s beachfront condo. The problem with the condo, just as with the marital home, was that the trial court awarded the wife special equity in the property. However, unlike with the marital home, the trial court was not clear regarding whether the condo was a marital asset, a non-marital asset, or a mix of both marital and non-marital. Trial courts are required to make these determinations before they can divide a couple’s assets.

In family law cases, as with many legal cases, it is not just about having the facts on your side but also about properly understanding and using the law that applies to your case. For help with all of the legal complexities and procedural steps in your family law case, reach out to the diligent South Florida property division attorneys at Sandy T. Fox, P.A. Our office has handled many asset distribution cases and can help you with your issues as well. Contact our attorneys online or by calling (800) 596-0579 to schedule your confidential consultation.

More blog posts:

Florida Court’s Failure to Explain How It Chose Dollar Amounts Leads Appeals Court to Throw Out Divorce Order, Fort Lauderdale Divorce Lawyer Blog, June 21, 2016

Intentionally Diminishing Marital Assets and Your Florida Divorce Case, Fort Lauderdale Divorce Lawyer Blog, March 17, 2016