Sometimes, the intervention of a divorce can create some serious wrinkles in the estate plans two spouses created while they were married. Other times, the couple’s estate plans can sometimes create wrinkles in an equitable distribution plan. In the case of one southwest Florida couple, that is exactly what happened. When they divorced, one of the pieces of property that the Collier County trial court distributed was a home in California. The Second District Court of Appeal threw out that distribution because, prior to the divorce, the couple had transferred the home into an irrevocable trust, so it was outside the reach of their divorce’s equitable distribution.
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.
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.
A Florida man successfully appealed a trial court ruling that declared the couple’s home to be the wife’s separate property. The Fifth District Court of Appeal overturned the trial court’s ruling, based upon the wording contained in the couple’s prenuptial agreement. That agreement gave each spouse the right to give away, sell, or distribute via estate planning tools his or her separate property. By transferring the title of the couple’s home from her name alone to the husband’s name alone, the wife completed exactly such a valid gift, which made the property the husband’s alone.
In Florida, equitable distributions are presumed, as a starting point, to be equal distributions between the spouses unless special circumstances exist that warrant an unequal distribution. One of those special circumstances is a spouse’s misconduct with marital funds. Even if a spouse is guilty of misdeeds with marital funds, there are limits to what a trial court can impose. The Fourth District Court of Appeal recently threw out an equitable distribution because the trial court’s decision would have essentially made a husband pay for the income tax consequences of withdrawing money from the wife’s individual retirement account not once but twice.
A lot of divorce cases have multiple distinct but related components. Even if a couple has no minor children in the home, there may be numerous elements to a divorce case, including the distribution of assets and debts, as well as alimony. When a trial court issues an order in your divorce, the law requires the judge to make certain factual findings as part of the ruling. In one case from North Florida, the lack of some required findings led the First District Court of Appeal to grant a husband’s appeal and send the case back to the trial court.
Some divorce cases go forward with both sides proceeding amicably, respectfully, and ethically. Unfortunately, this is not the case in all situations. Sometimes, a spouse may intentionally engage in wrongdoing as part of the divorce process, including improper dissipation of certain marital assets. When that happens, the law has a process for protecting the other spouse. The key in these situations is offering the right kind of proof of intentional misconduct and making sure that the trial court issues the right kind of finding. A recent case that originated in Broward County illustrated this, as the 4th District Court of Appeal threw out an equitable distribution of a couple’s assets because the court failed to make the necessary findings about the wife’s intentional misconduct.
In the divorce case of J.M. (wife) and M.M. (husband), the husband accused the wife of intentional misconduct that resulted in the dissipation of marital assets. In divorce cases, generally speaking, trial courts should not include in the equitable distribution of the couple’s assets anything that was “diminished or dissipated” during the period of time while the divorce case was pending. There is one definite situation where that is not the case, however: when one spouse commits intentional acts of misconduct that caused the diminution. When that happens, it is appropriate to include those spent assets in the misbehaving spouse’s portion of the equitable distribution.
In Latin, there is a phrase, “de minimis,” that essentially translates to “too minor to warrant consideration” or “so small that it can be disregarded.” This phrase comes up in legal matters sometimes, when an amount is so small that the court simply declines to consider it. Of course, a sum of money that might be insignificant to someone else might be extremely important to you. In a recent Orlando case involving a a wife’s portion of her husband’s pension, the Fifth District Court of Appeal threw out a trial court’s ruling that declined to award the wife anything from that pension. While the wife’s portion may have only been a tiny fraction of the total pension, that amount was not “de minimis” to her, in the court’s opinion, especially given that, over time, that amount would total several thousand dollars.
The couple in the case, M.B. and A.C., were married for a little more than three years when the husband filed for divorce. Eleven months into their short marriage, the husband retired from his job at the Yonkers School Board of Education, where he’d worked for 31 years. After the husband initiated the divorce proceeding, the trial court in Orlando dissolved the marriage and made a ruling on equitable distribution.
An ex-husband who failed to make payments to his ex-wife, even though he was financially able, was nevertheless able to escape being slammed with contempt of court. The 5th District Court of Appeal overturned a trial court decision that found the man in contempt, ruling that the payments were part of the equitable distribution in the couple’s divorce and that contempt cannot be used to enforce equitable distribution payments.
When J.L. (husband) and A.L. (wife) decided to divorce, the trial court divided up several assets, including the retirement benefits of the husband, who was a state employee. The trial court awarded the wife 50% of the marital portion of the husband’s state retirement. Unfortunately for everyone, however, things did not go as planned. Before the husband could retire, he suffered an injury at work. Instead of receiving retirement benefits, the husband began collecting permanent disability benefits.
An important new Florida Supreme Court decision helps clarify the applicability of waivers in prenuptial agreements. The court concluded that, if a prenuptial agreement’s terms made it clear that a spouse was waiving and releasing all rights and claims to the other spouse’s separate property, that waiver included the increase in value of those non-marital assets, even if the agreement did not expressly cover increased value, and the increase was due to marital efforts or funds.
The case brought to a conclusion the divorce dispute between H.H. (husband), a mortgage broker, and his wife, D.H. The couple married in February 1986 and remained married for 22 years. The month before their marriage, both spouses signed a prenuptial agreement. The agreement stated that, if the spouses purchased a property in both their names, the asset was presumed to be owned 50-50 between them, but if the husband purchased an asset in his own name, even during the marriage, that asset was his separate property.