Assets and property acquired during the marriage are considered marital property subject usually to a 50/50 split in Broward divorce court. Assets acquired after the filing date of the Florida divorce case are considered non-marital. As a general proposition it doesn’t matter which of the parties acquired the property during the marriage if marital funds were used to obtain the asset. For example if one party took their own paycheck during the marriage and bought a camera with it, that camera would be considered a marital asset subject to a 50/50 split. Or if one party saved up money in a bank account from their own separate earnings, those savings would be subject to a 50/50 split.
Assets acquired prior to the marriage generally are not subject to a 50/50 split but remain the separate property of the party who owned the asset to begin with. And if someone inherited money during the marriage, or received a gift from a third party just to that one spouse and not to both parties, the funds or gift would be the separate property of whoever inherited the money or received the gift. (These non-marital assets will be considered by the Broward divorce Court however in assessing a party’s ability to pay alimony.)
If there is an appreciation in value of a non-marital asset during the marriage, the other party may be entitled to a portion of the increase in value. For example, if one party has money in an investment account prior to the marriage and that investment grows in value during the marriage, the other party may be entitled to a portion of the increase. To get it they would have to show that the investment grew because the other party spent time and effort dealing with the account which caused it to increase in value.
Or let’s say for example a party had a home before the marriage and the parties made improvements to it during the marriage with marital funds, or paid down the mortgage on the property during the marriage with marital funds. The other party would have a claim to a portion of the increase in value or equity due to the improvement or pay down of the mortgage. If there is a passive increase in value on a non-marital asset, the other party may not be entitled to a portion of the increase in value depending on the circumstances. For example, the other party may not be entitled to a portion of the increase in value that occurred during the marriage if the increase was just due to good market forces, or inflation, as opposed to it resulting from the infusion of marital funds or labor into the asset.
A Florida court has the discretion to award more than 50% of an asset to one party but that is rather rare. If a party for example made an extraordinary contribution to the aquisition of the asset they may be awarded more than 50%, but this is normally not the case. Debts accummulated during the marriage are also normally split 50/50 regardless of which party incurred the debt. If one of the parties does not have the financial ability to pay their 50% share, a Florida Court can assign more than 50% of the debt to the other party.
The marital home often is in a special category in terms of how the divorce deals with it. If for example the parties have minor children who have been living in the marital home for many years and have their friends nearby, and they go to school in the neighborhood, the law does not want to see them taken out of their environment. Therefore, the party who is the primary caregiver for them may be able to stay in the marital home to raise them. This does not mean that the other party loses their interest in the property. When the children reach majority, the home would be sold with the proceeds divided.
There may be pensions involved that also have to be divided, or 401K type retirement plans. It is important to understand that the value that a Florida divorce Court will use to divide the account is not necessarily the balance that you will see in the account statement. For example, the account balance may indicate that a party has $50,000.00 in a 401K plan. However, the present value of that money is something less than $50,000.00. That is because there will be taxes due for an early withdrawal from the account, as well as a 10% penalty.
So depending on the tax bracket of the party, the present value of the $50,000.00 could be more like $35,000.00. Therefore, no one should give their spouse $25,000.00 in order to split a “$50,000.00″ retirement plan in half. In order to avoid these taxes and penalties the Florida Court will use a Qualified Domestic Relations Order. That is an order permitted by federal law to create an account for the non-employee party so that half of the funds can be shifted into that account. That shifting is not considered a withdrawal which would trigger federal taxes and penalty. However, if the non-employee party decides to take their money out immediately from their separate account they will incur the penalty and taxes due to the early withdrawal.
It should be understood that all of these rules apply when a Judge has to rule after a Broward divorce trial. The parties are free to divide property pretty much any way they wish. If for some reason they decide to split it in some fashion other than 50/50 they are free to do so as long as there is no coercion or duress involved. One very important aspect of divorce law is that the parties make full financial disclosure of their financial condition, including earnings and assets and liabilities, to the other party. If they make false statements in their financial disclosure, that may be grounds for the other party to have the final judgment of divorce set aside. For example if the party fails to list a significant asset in their financial affidavit, the other party can after the divorce come back and ask that the judgment be vacated. The basic argument is that they would not have settled the case on the terms that they did had they known the true financial condition of the other party.
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