Jacksonville Divorce Attorney Blog

August 9, 2018

Enhancement In Value: When Can It Be A Marital Asset?

In Florida, the enhancement of value of a nonmarital asset could be declared by a divorce court to be a marital asset. Most of the time you see this when one spouse’s nonmarital asset is alleged by the other spouse to be a marital asset. If it cannot be declared a marital asset any other way, the court may look at enhancement of value of the nonmarital asset and award the other spouse an interest of that enhancement of value. The Mitchell case illustrates this concept.

In Mitchell v. Mitchell, 841 So.2d 564 (Fla. 2^ndDCA 2003), the husband owned a Tampa Carrollwood home prior to the marriage and kept it titled in his name so it was nonmarital property. The trial court found that the home had been enhanced due to marital funds and efforts. Typically, the enhancement in value of a nonmarital asset resulting from either party’s nonpassive efforts or the expenditure of marital funds is a marital asset. The appellate court found that such enhancement in the Mitchell case was negligible. They performed primarily cosmetic or maintenance-related improvements, such as wallpapering. The most important factor in the increase in the value of the property was passive market appreciation, about 5 to 6 % annually. This produced a market value of $185,000. The appellate court found that where the increase in market value is attributable to inflation or “fortuitous market forces,” the expenditure of marital funds on the nonmarital asset does not transform the appreciated asset into marital property. However, an increase in equity due to the use of marital funds to pay down a mortgage balance is a marital asset subject to equitable distribution. The appellate court found that the wife’s interest in the home was limited to her one-half share of the amount by which the mortgage was reduced with marital payments.

The husband in Mitchell also had 41 acres of unimproved land in North Carolina that was solely titled in his name alone throughout the marriage. The circuit court characterized the entire appreciation in the value of the nonmarital North Carolina property as a marital asset subject to equitable distribution despite the fact that the appreciation was entirely attributable to passive inflation. As in the case of the Carrollwood home, this was error according to the appellate court. It was undisputed that the property was unimproved. It had no sewer, septic, electric, or water connections. The record showed that the parties used marital funds to pay mortgage payments, taxes, and a road assessment fee. The increase in the husband’s equity due to the use of marital funds to pay down the mortgage was a marital asset to be divided between the parties. Otherwise, the North Carolina property was found to be husband’s nonmarital asset.

August 9, 2018

Can Monetary Gifts From Family Be Considered Income for Alimony or Child Support Calculations in Florida?

by Holli Dean

In some marriages, a spouse’s parents may supplement the family income with monetary gifts, which may be an issue later on if the husband and wife divorce. Can one spouse argue that the other spouse will have higher income due to the monetary gifts from family members thereby raising alimony and child support payments? According to Florida law, it depends.

In Oluwek v. Oluwek, 2 So.3d 1038 (Fla. 2^ndDCA 2009), Jonathan Oluwek, the husband, appealed an amended final judgment of dissolution of his marriage to Linda Oluwek, the wife. The trial court imputed $1500 per month contributed regularly by the husband’s parents to husband for alimony and child support. The husband argued the trial court erroneously imputed the $1500 per month as income to the husband. The record indicated his parents made regular monthly payments of $1500 over the last five years of marriage.

The Oluwek court held that as a general rule, the trial court may not consider financial assistance from family or friends in determining a party’s ability to pay alimony or child support. However, there is an exception that allows the court to impute income based on gifts “if the gifts are continuing and ongoing, not sporadic, and where the evidence shows that the gifts will continue in the future.” In Vorcheimer v. Vorcheimer, 780 So. 2d 1018 (Fla. 4^thDCA 2001), the appellate court held that the trial court erred by imputing $1500 to the husband as income where there was no evidence that the payments would continue. The $1500 payments had been made on a monthly basis for twelve years, but the husband’s father testified at trial that he had stopped making the monthly payments and would not make them in the future. The court distinguished that case from Ordini v. Ordini, 701 So.2d 663 (Fla. 4^thDCA 1997), in which regular monthly payments from the husband’s parents continued through trial and the husband’s mother testified that she would continue to make them in the future.

July 9, 2018

New Ruling by Florida Supreme Court Gives A Remedy For Biological Fathers in Paternity Cases

by Holli Dean

In Simmonds v. Perkins, No. SC17-1963 (Fla. 2018), the Florida Supreme Court decided to take up the question of whether a biological father is entitled to rebut the common law presumption that the mother’s husband is the legal father of a child born to an intact marriage, where the mother or her husband object to allowing such rebuttal. The Court held that the biological father may rebut the presumption of legitimacy when he has “manifested a substantial and continuing concern” for the welfare of the child. The presumption of legitimacy may be overcome by a “clear and compelling reason based primarily on the child’s best interests.”

This case involved the child’s mother, Treneka Simmonds, and biological father, Connor Perkins, and their daughter. When Perkins and Simmonds were together, Perkins was never told Simmonds was married to a man named Shaquan Ferguson. When Perkins did find out Simmonds was married, she told him she was married for “immigration purposes” and was going to get a divorce. Perkins was there when the child was born, taken the child to the doctor, enrolled the child in daycare, and even had sole physical custody for awhile. The child called him “daddy.” Perkins’ mother is also know as her grandmother.

Perkins decided to file a petition to determine paternity, timesharing, and child support. Simmonds moved to dismiss the action based on it being barred by the common law presumption of legitimacy because Simmonds was married to Ferguson. Perkins then added Ferguson as an additional party, amended his petition to seek disestablishment of Ferguson’s paternity, and alleged it would be in the child’s best interests for him to be recognized as her legal father. Ferguson also moved to dismiss under common law. The trial court dismissed Perkins’ petition because of previous Fourth District precedent stating that the putative father cannot seek paternity when the child was born in an intact marriage and the married woman and her husband object.

June 28, 2018

Angelina Jolie and Brad Pitt Custody Battle May Involve Parental Alienation

by Holli Dean

In 2016, Angelina Jolie filed for divorce from Brad Pitt after he got into an altercation with his son Maddox on a plane that resulted in an FBI investigation. You may have heard about the custody battle with their six children that has ensued. Recently, a judge apparently ordered “new restrictions” regarding Angelina’s participation in how Brad interacts with the children.

The Judge wrote, “[The children] not having a relationship with their father is harmful to them. It is critical that each of them have a healthy and strong relationship with their father and mother.” The Judge also state, “If the minor children remain closed down to their father and depending on the circumstances surrounding this condition, it may result in a reduction of the time they spend with [Jolie] and may result in the Court ordering primary physical custody to [Pitt].” The Judge created a visitation schedule for Brad to see his children over the summer with the children continuing to receive therapy.

It seems the Judge is trying to prevent parental alienation. Parental alienation is the psychological manipulation of a child into showing unwarranted fear, disrespect or hostility towards a parent and/or other family members. Check out 9 warning signs that parental alienation might be present here.

June 28, 2018

Rudy Giuliani Divorce: Why Asset Protection is So Important Prior to Marriage

by Holli Dean

Former New York City Mayor Rudy Giuliani and his third wife, Judith, are currently involved in a heated divorce. A day after filing for divorce on April 4, 2018, the parties filed for each other to produce a statement of net worth to determine assets. The Giulianis have been married for 15 years and they do not have a prenuptial agreement.

In 2007, when Rudy Giuliani submitted his financial disclosure to the Federal Election Commission while running for president, he was worth an estimated $30 million. The couple own properties in Manhattan and Palm Beach, Florida. It is estimated that there is currently an estimated $60 million in assets at stake. When he married Judith, Rudy was pretty much insolvent and the money he has now was earned while he was married to Judith. New York is a separate property state, but her participation in his success could be a factor for the assets to be split 50/50.

In Florida, mandatory disclosure applies so the Giulianis would not need to file for a statement of net worth. Mandatory Disclosure is the procedure where financial information is automatically disclosed by the parties upon the filing of a divorce. The parties must exchange financial information in the form of a financial affidavit and additional documents such as tax returns, bank statements, credit card statements, deeds, vehicle titles, insurance policies, etc. Mandatory disclosure must be completed within 45 days after service on the respondent.

June 8, 2018

Paternity in Florida: Who Pays For Birth Expenses?

by Holli Dean

For any father who is involved in a Florida paternity action, it can be overwhelming to learn that you may have to pay not only child support, but retroactive child support and birth expenses for the child. Is there any way to limit the cost of what has to be paid to the mother for the time period prior to the paternity ordered being entered? The answer is: it’s possible.

Florida Statute 742.031 provides that in a paternity action, the court shall order the father to pay moneys sufficient to pay reasonable attorney’s fees, hospital or medical expenses, cost of confinement, and any other expenses incident to the birth of the child and to pay all costs of the proceeding, if appropriate. The statute provides that bills for pregnancy, child birth, and scientific testing are admissible as evidence without requiring third-party foundation testimony and shall constitute prima facie evidence of amounts incurred for such services or for testing on behalf of the child.

Where it can be tricky is what is “appropriate” as defined in the statute? In Dustan v. Weatherspoon, 505 So.2d 23 (Fla. 3^rdDCA 1987), there was an appeal of a paternity action’s child support order. The mother alleged that the trial court abused its discretion in failing to require the child’s father to pay any portion of the expenses incidental to the birth of the minor child. The appellate court agreed with the mother. The court stated: “These rather minimal child support requirements seem to us the least that a father should be expected to do for his child, providing, of course, the father can afford it.”

May 22, 2018

Golfer Lucas Glover’s Wife Arrested in Florida: Family Law Implications

by Holli Dean

National headlines were made when the wife of former U.S. Open champion Lucas Glover was arrested for domestic violence battery and resisting arrest in St. Johns County, Florida on May 13, 2018. The altercation allegedly occurred after Lucas Glover missed the 54-hole cut at The Players Championship. Lucas Glover told authorities that his wife gets violent every time he does not play well in a major PGA Tournament. There were allegedly visible injuries on Lucas Glover and his mother. Krista Glover faces a court date on May 31, 2018 and was released on a $2,500 bond.

The Glovers children were present at the home when the incident happened. Krista Glover had been drinking throughout the day and started yelling profane insults at Lucas Glover in front of their children and his mother. Lucas Glover told her to stop the argument while in front of the children. The children were in bed when the physical altercation happened, and it is unknown if they observed any of the altercation or the subsequent arrest afterwards where Krista Glover allegedly resisted arrest. The couple was married in 2012 and have two children, a two-year-old son and a 5-year-old daughter.

The consequences of arguments in front of the children can be serious to both the aggressor and the victim. The Florida Department of Children and Families may become involved if they receive an abuse report to investigate regarding the situation, which could even lead to possible removal of the children from both parties if it is alleged Lucas Glover failed to protect the children from multiple instances. Also, it is key that alcohol was involved. Drinking is perfectly legal and acceptable; as long as there is not a demonstrable effect on the children. If there is a demonstrable effect on the children, alcohol treatment would most likely be ordered by a dependency court.

May 17, 2018

Lessons to be Learned Regarding Interspousal Gifts During a Marriage

by Holli Dean

The Florida Supreme Court, on March 30, 2017, issued an opinion in Hooker v. Hooker, 220 So.3d 397 (Fla. 2017) finding a Florida horse farm and a New York summer home interspousal gifts and, therefore, subject to equitable distribution as marital property despite a prenuptial agreement in existence. The prenuptial agreement provided that, upon divorce, each party would retain his or her premarital assets and any appreciation of those assets. Both parties had independent sources of income from family inheritances and they maintained separate finances throughout the marriage. The parties were married for 23 years.

The Florida horse farm, “Hickstead,” was purchased in 1989 and the Hickstead deed listed “Alice I. Hooker Trust FBO, for the benefit of, Timothy I. Hooker” as the grantee. Husband and Wife signed the mortgage on Hickstead. When Hickstead was purchased, it was vacant land and it later became through the course of the marriage a working horse farm with 16 stalls, etc. and the marital home in one wing upstairs and the other wing was the staff apartment. Wife was “extremely and directly involved in all aspects of the Hickstead residence which was the family’s primary home for approximately 20 years,” according to the findings of the trial court. Wife was not limited or restricted in any way from incurring the costs and expenses of maintaining and operating a family home at Hickstead, from the Husband’s assets. Wife was provided unfettered access to the stables and horses to pursue her lifelong passion.

The New York summer home, “Lake George,” was purchased in 1997 and was titled only in the Husband’s name and only Husband signed the mortgage. It was purchased, built and maintained as a summer residence for the family. The Husband paid the expenses for Lake George with his independent funds and Wife was never a signatory on that account and never had access to that account. However, the Husband sent Wife a card for their tenth wedding anniversary with a picture of the property after the Wife had expressed a desire to have a home up north and both parties searched for a suitable property.

May 11, 2018

The Tightrope: Protecting Enhancement in Value and Appreciation of Non-Marital Assets

by Holli Dean

Equitable distribution of assets in Florida divorces can be a complex and divisive issue. Regarding trusts and divorces, you can walk a fine line between a marital asset and a non-marital asset. Enhancement in value and appreciation can be a marital asset in certain situations.

Oxley v. Oxley, 695 So.2d 364 (Fla. 4^th DCA 1997) is a case that is especially relevant regarding a person placing their property in a revocable trust with themselves as trustee, hiring a financial manager to make the daily investment decisions, and thereby protecting themselves from the Florida Statute § 61.075(6)(a)(1). This section provides marital assets and liabilities to include the enhancement in value and appreciation of non-marital assets resulting either from the efforts of either party during the marriage or from the contribution to or expenditure thereon of marital funds or other forms of marital assets, or both. Meaning, technically, a non-marital trust’s appreciation of value could be considered marital property unless specific requirements are followed. Oxley spells out how to avoid appreciation being considered in the dissolution of marriage.

In Oxley, the parties’ marital income was primarily from trust distributions to the husband which he supplemented with a salary taken as president of a family holding company. The trust is revocable and was established prior to the marriage by the husband that provides that all income is payable to husband. The investment decisions for the trust was made for the husband’s exclusive benefit by the trustee based on the advice of the husband’s father and brother. It had multiple, active investments such as several working oil wells. On one occasion the husband invested $400,000 of trust funds through a separate money manager. At the time of the marriage, the trust was valued at $2 million and then increased to $7 million at the time of dissolution; and the increase was attributable to undistributed income that has accumulated during the marriage and upon which he paid personal income tax. The trust also owned and paid the expenses on the marital home. The husband also owned 50% of a corporation found to be a gift (technically purchased for a nominal amount) from his father. As company president, the husband’s activities were largely ministerial and ceremonial, and he left the management and investment decisions to others. The trial court in Oxley ruled that the trust, including the undistributed income, were non-marital assets, which significantly limited the wife’s equitable distribution.

April 20, 2018

Distribution of Assets of a Trust not allowed by Florida Divorce Court

by Holli Dean

Equitable distribution in Florida during a divorce can be a frightening prospect. What are the rules regarding distribution of assets of a trust in a divorce? Does the divorce court have the authority to distribute trust assets?

The appellate courts in Florida have addressed this issue. The appellate court held that without consent from all beneficiaries to the trust, the trial court did not have the authority to distribute any asset of the trust. See Sylvester v. Sylvester, 557 So.2d 599, 600 (Fla. 4^th DCA 1990). In Sylvester, the court held that the trial court’s finding that the irrevocable trust, which was the only source from which the husband could comply with the judgment, could be terminated by husband at any time, was erroneous due to the court’s failure to have all indispensable parties before it. The trust would have to be before the court joined with the trustee and beneficiaries.

Similarly, in Minsky v. Minsky, 779 So.2d 375 (Fla. 2^nd DCA 2000), the appellate court reversed the determination that trust funds are a marital asset and the resulting equitable distribution in a dissolution action. The trial court incorrectly determined that because the parties had used the trust accounts as marital funds, the funds had “taken on the nature of a marital asset” and awarded the trust funds to the wife. The appellate court indicated that, in effect, the trial court dissolved the trust created for the children’s benefit and the husband as trustee and declared it a marital asset. The court held that the trial court does not have jurisdiction to adjudicate property rights of nonparties.