The Effect Of Marital Efforts Or Funds Used To Increase A Non-Marital Asset During A Fort Lauderdale Divorce

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.

The trial court found that the asset was derived from a lawsuit concerning a non-marital asset that had not increased in value during the marriage. The Fourth District Court of Appeal affirmed the decision of the trial court. The Court reasoned that the evidence presented at trial did not establish that marital labor or funds enhanced the value of the asset.

To determine whether a portion of the lawsuit recovery is a marital enhancement resulting from the expenditure of marital efforts or funds, the initial value of the lawsuit must be supported by competent substantial evidence. Here, the only evidence of the value of the lawsuit was that the account had been worth $8 million before the theft and that the Former Husband settled the lawsuit for $5.6 million.