Asset & Debt Division in a Florida Divorce was last modified: March 31st, 2018 by Howard Iken

dividing assets in a florida divorce

Dividing Property in a Florida Divorce

Property division in a Florida Divorce

Those who are going through a divorce, or are about to go through a divorce in the state of Florida, probably have many questions regarding the division of assets and liabilities. Like most things related to divorce, it may be possible for the parties involved to come to a mutually-acceptable agreement regarding how assets and liabilities will be divided. If no such agreement can be reached, however, a judge will step in to divide assets and liabilities. When this occurs, one party or both parties may end up dissatisfied with the outcome; while it is generally presumed assets and liabilities will be split more or less equally, this is not always the case. Flexibility is the hallmark of equitable distribution, but this very flexibility makes it difficult to predict the outcome of divorce asset division. The Florida divorce court will classify which property and debts are considered marital and which are not.


Florida—Community Property or Equitable Division?


There are currently only nine states left in the United States which operate under community property laws, and Florida is not one of these. (Alaska is an “opt-in” state which allows both parties to determine whether their property will be community property). In a community property state, each spouse equally owns all income and assets earned or acquired during the couple’s marriage. Even if only one spouse was employed during the marriage, the money will still be equally split.


That same equal ownership applies to debts as well, meaning both spouses are equally liable for debts, including credit card balances, mortgages and car loans. In short, in a community property state, the judge must only apply the stated community property rules when dividing the assets of a divorcing couple—in other words, all joint assets are split cleanly down the middle, making for a quick division of marital assets. There is no attempt to divide assets “fairly” in a community property divorce, therefore employment prospects, length of marriage, age or health are not considered factors in asset distribution.


Florida operates under the laws of “equitable distribution,” which essentially means property acquired during the marriage belongs to the spouse who earned it, and during a divorce all assets and liabilities are to be divided between the spouses in a fair and equitable manner. There are no specific, set rules regarding who will receive what or how much they will receive, rather a variety of factors will be considered. Once the court looks at the relative earning contributions of each spouse, factoring in the value of a spouse who stayed home to raise children, as well as the earning potential of each, the final determination could be that one spouse is awarded anywhere between one-third and two-thirds of the marital assets, although this is a guideline only.


Marital vs. Non-Marital Assets


marital vs non-maritalIn order to make a determination regarding an equitable division of assets and liabilities, the court will first need to determine which assets are considered “marital” assets and which are considered “non-marital.” The classification of marital or non-marital assets may appear pretty straightforward—any assets brought into the marriage are non-marital assets while those acquired during the marriage are marital assets. Unfortunately, it is rarely this simple. There are a number of exceptions to the process which can render it much less clear-cut. Primarily, any time marital and non-marital assets have been commingled, the court may find it more challenging to “untangle” a couple’s assets.


Jason Ponder on Commingling of Assets

This means when non-marital property has been titled jointly, it becomes marital property. Practically speaking, if one spouse owned twenty acres of Florida beachfront property prior to the marriage, then titled those twenty acres jointly following the marriage, the property is no longer considered a non-marital asset. Many spouses have been shocked to realize this fact during a divorce, assuming because they brought something into the marriage it will remain theirs, regardless of how it is titled. In the same vein, if one spouse came into the marriage with a hefty bank account, then added his or her spouse’s name to the account, the money in the bank account has been transformed into a marital asset.


Or perhaps the spouse’s name was never added to the bank account, but the money was spent to buy a marital home titled in both spouse’s names. The house will now be considered a marital asset to be divided fairly equally. No matter how passionately the spouse who brought the assets into the marriage feels the asset in question should be returned to him or her in its entirety, the courts may feel otherwise. In general, the courts consider the following when determining which assets are marital and which are non-marital.


  • All assets, and liabilities acquired and incurred during the marriage—whether by one spouse or both—is considered marital property. If a car is purchased by one spouse after the marriage, even if it was purchased using money earned from that spouse’s job only, the car becomes marital property.
  • Gifts given to one another during the marriage become marital property.
  • Any assets or liabilities acquired or incurred before the marriage—when they are not commingled during the marriage—are considered non-marital property.
  • Non-marital assets which increase in value during the marriage become—at least in part—marital property.
  • Retirement funds, deferred compensations, insurance plans and programs, retirement funds, pensions, annuities and profit-sharing programs, become—at least in part—marital assets.
  • Any income resulting from a non-marital asset is considered non-marital property unless that income was treated as a marital asset or relied upon both parties as a marital asset. As an example, if both spouses used the yearly interest from a non-marital bank account to make upgrades and improvements to the marital home each year, then the interest amount will be considered marital property.
  • Any assets or liabilities which fall under a valid written agreement by the parties which specifically excludes said assets or liabilities as marital property will be considered non-marital property by the courts.


Therefore, absent a legal agreement which states otherwise, marital property in the state of Florida will include all debts and assets acquired by either spouse during the marriage, regardless of how the debt or asset is titled. Even if a spouse—unbeknownst to the other—opens a charge card and goes crazy racking up debt on the card, that debt will be considered a marital liability. The exception to this might be if the court found the spouse wasted marital assets through reckless spending. This fact also comes as a shock to many divorcing spouses who are suddenly presented with the fact they are now responsible for half of the debts accumulated by their husband or wife, even when they had no knowledge of those debts.


Assessing the Value of Marital Assets


value of marital propertyAfter it has been determined which assets are marital and which are non-marital, a monetary value will be assigned to each item. In some cases, a professional appraiser may need to be hired in order to put a fair value on the asset. Retirement accounts and some other financial assets can be extremely difficult to accurately evaluate and may require a CPA or an actuary in order to reach a fair assessment. Both spouses are advised to consider the tax implications of acquiring a particular asset in a divorce settlement. In some cases, after a cost-benefit analysis is performed, it may be determined a specific asset is not worth fighting for.


Factors the Court Will Consider in an Equitable Division of Assets and Liabilities


There are a number of factors the court will consider when dividing assets and liabilities during a divorce, such as:


  • How long the marriage lasted;
  • The economic circumstances of each spouse;
  • Whether a child of the couple and/or one spouse will continue living in the marital home;
  • The debts and liabilities attributed to each spouse;
  • Whether one party stopped their educational path or career in order to further the other party’s career or education;
  • The contributions of each spouse, including improvement of marital or non-marital assets, or contributions as a wage earner, parent or homemaker;
  • If marital assets were intentionally dissipated or destroyed following the filing of the divorce or within two years before the petition was filed, the judge may consider this dissipation when dividing assets and liabilities, and
  • The difficulties associated with dividing a specific asset. As an example, if one spouse owns and operates a business, or is a significant part of a family business—and is the only spouse involved in the business—the judge may give the business to that spouse, making up for it by awarding extra money or assets to the other. It is assumed this offset will equal out the couple’s assets and liabilities, to the extent possible.


The ability of each spouse to support themselves following a divorce will be considered by the judge when determining how assets and liabilities will be divided; a spouse who has missed career opportunities to be a homemaker and/or raise children may be awarded a greater share of the marital assets. If a marriage lasted only a short time, the judge in the case may be reluctant to award one spouse money which was primarily earned by the other. The judge may consider awarded alimony, child support, age, general health, training and employment when dividing assets.


How Will the Marital Home Be Divided?


dividing marital homeDepending on the circumstances, a judge may order the marital home to be sold, and the proceeds divided. If the couple’s home is the primary property owned, the judge may order the home to be sold at a future date, allowing one spouse to continue to reside in the marital home until the sale. When minor children remain at home, this can be a fairly common determination. If one spouse feels strongly about remaining in the marital home, (whether there are children or not), then the judge may award the other spouse additional money or assets, or fewer debts in order to make the split at least somewhat equitable. If the house is to be sold, but the real estate market is particularly bad at the time of the divorce, the judge may allow the couple to keep the home and sell it when the market increases.


The Division of Marital Debt


As with assets, the court will attempt to divide all the couple’s debts equally, assigning responsibility for payment to one spouse or another. Once responsibility for a specific debt is assigned to one spouse, the other should have his or her name removed from the account, otherwise there is a risk, the creditor can continue to “come after” the non-liable spouse for payment.


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Adultery or other bad behaviors on the part of one spouse is generally not punished through the division of marital assets. The exception to this would be if that bad behavior contributed to the dissipation of marital assets. As an example, if the spouse who engaged in infidelity was regularly spending money on his or her paramour, the judge may equalize those expenditures during the property division.


Negotiating for the Best Distribution of Assets during the Divorce


If one spouse feels he or she is not going to be treated fairly by the judge during the division of assets and liabilities, it might be worthwhile to try once more to negotiate a settlement prior to handing the decisions over to a Florida judge. Couples who can create a marital settlement agreement can divide their assets in a way that best fits their particular situation without worrying about being bound by court orders. Having an experienced Ayo and Iken divorce attorney by your side to help negotiate an equitable settlement on your part can make all the difference in the end result.


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