Equitable Distribution Attorneys
In almost every divorce case, it will be necessary to distribute assets and debts. There is a presumption under Florida law that marital assets and debts are distributed equal. While the idea of separating and distributing assets and debts seems simple, it may be complex depending on the circumstances of your case.
Marital Asset Distribution Attorneys
One issue the parties must deal with is determining whether an asset or debt should be classified as marital or non-marital. An example of a non-marital asset is an asset that was acquired prior to the marriage or an asset that was received by only one party through inheritance. However, even an asset that is non-marital may become marital through “commingling” the asset with marital funds or jointly titling the asset with the other person. Sometimes the issue of whether an asset or debt is marital or non-marital is not clear and must be resolved by the Court.
Another potential issue with the distribution of assets and debts is valuation. Some assets are easy to value, such as a bank account. Other issues are not easy to value, including a pension or small business. In order to get a value for some assets, it may be necessary to hire a valuation expert. Our divorce attorneys are well versed in the issue of valuation and when/how to use an expert, if necessary. It is important to note that it is the party’s responsibility to value an asset at trial and not the court’s responsibility. Therefore, if you fail to give the judge a value at trial, it could significantly prejudice your case.
Valuing An Asset
When an asset is valued different at the date of filing than it is at the time of trial, the parties may argue about which valuation date the judge should use before distributing that asset to one of the parties. The depletion of an asset may be due to market fluctuation which is not normally attributable to either party or the depletion of an asset may be due to intentional depletion by one party. The judge will consider each asset and decide the valuation date and value the asset before distributing that asset to one party or the other.
A party may argue that there should be an unequal distribution of marital assets or debts, which is permitted under limited circumstances. Florida law provides that an unequal distribution of assets/debts may occur based on a list of enumerated factors. However, practically speaking, it is difficult to get an unequal distribution of assets or debts and you should speak to your attorney about this possibility if you believe it may pertain to your case.
While distributing assets and debts sounds simple, it may be one of the most complex issues in a divorce case. It is important to hire a knowledgeable family law attorney to help navigate the potential issues in your case. Contact one of our attorneys for a free initial consultation.
Appreciation of Non-marital Assets
Appreciation of non-marital property is when separate property increases in value. There are two types of appreciation, “active” appreciation and “passive” appreciation. Passive appreciation of non-marital property will remain as non-marital property during distribution of assets. It occurs when an asset increases in value without either of the parties playing an active role in it. For example, a home which the couple shared increases in value throughout the years without either party improving the property. When non-marital property is deemed as active appreciation it becomes a marital asset that can be distributed among the spouses during divorce. Non-marital property becomes active appreciation when its increase in value is caused by an act of either party during the marriage. An example of active appreciation would be if a spouses provided financial support for the growth of the other spouse’s business. A Gainesville divorce lawyer can help you determine what would be considered active appreciation and passive appreciation before asset distribution.
Bankruptcy During Distribution
If bankruptcy is filed during divorce, your non-marital property and any jointly owned property will become part of your bankruptcy. If you do not have have enough exemptions to cover your assets, they may be taken from you and sold in order to pay your creditors, as stated by Chapter 7 bankruptcy. Your spouse’s non-marital property and his or her own share of the joint property is usually not affected or paid back by the trustee after being sold. Any form of support, such as alimony or child support, cannot be eliminated when filing for bankruptcy.
Distribution of Corporations
There are two types of corporations, C corporations which are separate taxable entities, and S corporations that are pass-through and not separate tax entities. During divorce, the corporation, whether C or S, must be valued and determined to be either marital or non-marital property. If it is deemed to be marital property, the corporation must then be distributed amongst the spouses. S corporations will have all assets divided between the spouses, even if they both agree to keep running the corporation together. Since C Corporations can stand on their own, the spouses may own shares of stock but the entity will remain its own and operate within itself. At The Law Office of Silverman, Mack & Associates, we can provide you with a divorce attorney Gainesville, FL, residents can count on to help them determine the dangers to their corporations during distribution of assets.
Distribution of Debts
When it comes to debt in divorce, marital debts can be split between the parties during distribution. In order to determine whether a debt is marital or separate, the court will look into the nature of the debt, the source of repayment, and for whose benefit the funds were expended. Marital debts are usually distributed along with assets but may be allocated differently, depending on ability to pay compared to the other spouse and responsibility for the expense.
Identification of Assets
Before assets can be divided between the spouses, the property and debts that existed at the time of divorce need to be identified, whether marital or non-marital. Both parties have the duty to disclose assets in which he or she has an ownership interest, such as mutual funds, real property, retirement accounts, and other assets. Identification of assets is extremely important in order to distribution to be fair. Gainesville divorce attorneys have the necessary skills to help you identify all assets subject to distribution.
Marital Assets vs Non-Marital Assets
After all assets have been identified, the court must decide which are considered marital and which are non-marital. Marital assets are divided amongst the spouses since they were shared, non-marital assets are kept by the spouse who originally owned them. At The Law Office of Silverman, Mack & Associates, we can provide you with a divorce lawyer Gainesville, FL, residents can trust to help protect their assets during distribution.