Articles Tagged with “Non-Marital Asset”

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The Miami Herald is reporting that the Supreme Court of Florida has issued its opinion in Kaaa v. Kaaa that addresses whether and under what circumstances passive appreciation of a marital home that is a nonmarital asset is subject to equitable distribution.

For 27 years, the parties resided in a home that was purchased by the husband for $36,500 six months before the marriage. During the marriage, marital funds were utilized to pay the mortgage and improve the home. Although the home was refinanced during the marriage, the wife was never placed on the title or deed. At trial, the parties stipulated that the value of the home was $225,000 and the outstanding balance of the mortgage was $12,871.46. The trial court found that the home was nonmarital, that the mortgage balance had been reduced by $22,279 and the renovation to the carport increased the value of the home by $14,400. Accordingly, the trial court ruled that the the enhancement value of the home, $36,679, was subject to equitable distribution and ordered the husband to pay the wife $18,339.50. In affirming the decision of the trial court, the Second District Court of Appeal held that the former wife was not entitled to equitable distribution of the passive appreciation of the real property.

The Supreme Court of Florida quashed the decision of the Second District Court of Appeal and concluded that passive appreciation of a non-marital asset is considered a marital asset when marital funds or the efforts of either party contributed to the appreciation. A nonmarital asset which appreciates during the marriage, only due to inflation or market conditions, becomes in part a marital asset, if it has indebtedness which is reduced by marital funds. Improvements or expenditure of marital monies which results in the enhancenment of the value of a nonmarital asset is an asset subject to equitable distribution. Additionally, the nonowner spouse is also required to have made contributions to the property during the marriage by investing marital funds or the efforts of either party.

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When you meet with your Fort Lauderdale marital and family law attorney, you will be asked about you and your spouses assets and liabilities as part of your divorce case. Your Fort Lauderdale divorce lawyer will explain to you the difference between marital and non-marital assets and liabilities as set forth in Florida Statute 61.075. One way that the Broward County divorce judge can award you an interest in the enhancement value of a non-marital asset for equitable distribution purposes is as a result of marital efforts or marital funds that result in an increase in value of a non-marital asset.

In Shinitzky v. Shnitzky, the former wife appealed the trial court’s order which held that funds recovered in a lawsuit for damages arising from the loss of a non-marital asset were a non-marital asset. Before the marriage, the Former Husband sold his business for $8 million. The parties did not dispute that the $8 million from the sale of the Former Husband’s business was non-marital. After the marriage, the Former Husband placed the $8 million into a brokerage account. The broker absconded with the money. The parties worked together to recover the funds for two years during the marriage. The Former Husband then moved out of the house and pursued the lawsuit on his own before recovering $5.6 million and an uncollectible judgment against the broker.

The Former Wife argued that the funds received from the lawsuit were marital since they were acquired during the marriage. While the Former Husband agreed that if marital labor or funds had been used to pursue the lawsuit and that if the expenditure of marital effort or funds had increased the value of the recovery that the increase could be considered marital, he argued that none of the recovery was marital since marital funds or efforts did not increase the value of the $8 million non-marital asset.

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