Articles Posted in Disposition of Assets

Negotiating a divorce settlement can be stressful, especially when tension is high and your spouse insists on contesting every last detail. One thing that often is last on people’s priority list, but which should not be overlooked, is insurance.

Insurance policies are standard parts of settlement agreements. The spouse who pays alimony or child support is commonly expected to maintain a life insurance policy that would cover the debt owed to the spouse or children on the receiving end of the money, in case the payer dies while a debt is owed.

If you’re the spouse who is the beneficiary, you must be certain that the policy amount is sufficient to cover your children’s educations, your mortgage and related debt. It’s important to consider sticking in guarantees that forbid a lapse, cancellation or change of beneficiaries to the life insurance policy.

Divorce is a hard enough process for anyone to go through and there are lots of complicated financial decisions that must be made. The money worries can multiply for small business owners who have the added concern of how the divorce will affect their livelihood and even employees.

First things first, your business will likely need to be valued in connection with the distribution of marital assets. This will mean a financial expert may need to go over the records of the company and ask questions about expenses and revenue streams. You’ll need to produce extensive documents to verify the numbers in this process. Sometimes valuations, especially complicated ones, can be expensive. Many times each party insists on having their own expert look at the books. The process can be time consuming and can serve as a distraction for employees who must spend time gathering documents.

Though the worst-case scenario in many business owners’ minds is that the company will have to be sold to pay the spouse his or her share of the marital assets, there are ways to minimize the impact of divorce on a small business.

Divorce and Annulment courts in Florida apply the legal concept of equitable distribution when it comes time to divide the assets of a divorcing couple. This means that the entire marital estate, assets and debts, must be divided in an equitable, though not necessarily equal, manner. There is no fixed standard for dividing property, each case will be decided on the merits, and the trial court’s discretion will not likely be disturbed on appeal without a showing of clear abuse.

Property includes anything of value, tangible or not: personal items (such as cars, furniture and art work) and real property (land and houses). Debts include anything you owe money on: mortgages, car loans, and credit card bills. Really anything the two of you possess is thrown into the mix before it’s all divided.

It’s important to know that not all property is subject to equitable division. Items that qualify as non-marital may include the following: property acquired by either party before the marriage; property acquired after certain stages of the divorce process; property excluded by a written contract between the parties (likely a prenuptial agreement); and any increase in value of non-marital property that did not result from efforts of the other spouse.

Thumbnail image for gavel.jpgAs a Jacksonville Divorce Lawyer the majority of my clients tend to be concerned about what will happen to their marital finances during their divorce proceedings. These clients are rightfully concerned because many individuals going through a divorce take the opportunity to start dissipating marital assets, by either selling items that would likely be equally distributed during the divorce or charging large amounts on credit cards.

However, as I tell all my divorcing clients, with every divorce proceeding in Duval County a Standing Family Law Court Order in entered. Among other things, this Order includes the following provisions:

“Neither party shall sell, transfer, encumber, conceal, assign, remove or in any way dispose of, without the consent of the other party in writing, or without an order of the court, any property, individually or jointly held by parties, except in the usual course of business or for customary and usual household expenses or for reasonable attorney’s fees in connection with this action.”

Whether or not an asset is “marital” or “nonmarital” is often a key issue in a divorce. Marital assets are generally considered jointly owned by both husband and wife, and it is usually up to the court to decide how those assets will be distributed. Nonmarital assets, however, are considered owned by only one of the spouses and are generally free from distribution in a divorce. You should be aware that liabilities –debts– are treated the same way as assets.

Florida Statute 61.075 addresses this issue and defines marital and nonmarital assets. Marital assets include assets acquired during the marriage, the increase in value of nonmarital assets (if the increase is the result of contribution from both spouses), interspousal gifts during the marriage, and all benefits accrued during the marriage, such as retirement funds, pension, profit sharing, and insurance plans.

Nonmarital assets include assets acquired prior to the marriage, assets acquired during the marriage by gift or inheritance, assets excluded from being considered marital by written agreement (such as a prenuptial agreement), and income derived from nonmarital assets, unless the income was “treated, used, or relied upon by the parties as a marital asset.”

ed.jpgFlorida is an equitable distribution state, meaning that marital assets are divided on an equitable basis. Or at least that is a court’s objective. Under Florida’s equitable distribution statute, marital property should be equitably divided between divorcing parties. 

Florida Statute § 61.075 requires that a court begin the process of dividing assets and liabilities by setting aside those assets that are defined as “non-marital.”

• typically those assets which either were owned prior to the marriage or inherited during the marriage and not mixed with marital assets,

Thumbnail image for proposal.jpegThere are two situations where you might like to get back the rather expensive ring you bought your bride before your relationship ended: a broken-off engagement or a divorce. The answer to “who gets the ring?” is different in each situation.

Broken-Off Engagement: engagement rings are considered “conditional gifts.” In other words, the gift becomes final upon the condition that your bride eventually marries you. Prior to the vows, however, that condition has not been completed, so you can still revoke the gift. So, if the engagement is called off, you should legally be able to get back the ring.

Divorce: after the vows are said and the marriage license is signed, the condition of that conditional gift has been fulfilled. The ring is now considered a gift. Further, because it is a gift, it is a nonmarital asset for distribution purposes if the two of you ever get divorced. That means that the ring’s value will likely not be split between the two of you during a divorce. Instead, it belongs to your spouse. This was true even in a case (Randall v. Randall) where the ring was the former husband’s family heirloom.

401k.jpgBecause the beneficiary designation was never updated post divorce finalization, the Supreme Court of Florida has ruled a former spouse still entitled to death benefits payable from a retirement plan. Unambiguous language in the Marital Settlement Agreement can avoid a beneficiary designation even where a spouse has neglected to remove their now ex-spouse.

However, some designations can be revised prior to a divorce, but Federal law does not allow the changing of a beneficiary designation on some financial plans without written spousal consent, which is difficult to get when something like a 401(k) is in dispute. This spousal consent rule can create a small hurdle; most beneficiary designations can be changed and should be as soon as possible after a divorce.

An experienced Florida Family Law Attorney should be sure to ask you about beneficiary designations before finalizing a divorce. Be sure to ask the attorney working on your divorce if you are unsure about certain designations. If you are not currently working with an attorney, the most advisable practice is to secure an experienced Jacksonville Family Law Attorney as soon as possible.

theft.jpgIn Florida, prior to the point at which a couple actually “files” for divorce, there is usually a breakdown period of time that the couple has gone through that has led to the actual divorce. This breakdown period can be a matter of only a month or may have been years. In the cases where this has been a longer period, as a Jacksonville Divorce Lawyer, I have seen where one party used marital assets for his or her own benefit, outside of the marriage. This is called “intentional dissipation.”

To combat the benefited party receiving a disproportionate amount of marital assets in a divorce proceeding through equitable distribution, the Florida legislature allows the other party to prove the amount the benefited party used during the marriage. This amount is then put towards the amount the benefited party would receive and will count the amount taken by the other party as money the benefited party already received.

If you are considering divorce and have gone through a long breakdown period, contact a highly recommended Jacksonville Divorce Attorney who can track down the amount of marital assets your former spouse used outside your marriage.

asset paperwork.jpgWhen going through a divorce in Jacksonville, Florida, it is so important to hire a Florida divorce lawyer because spouses have to deal with so many issues such as child custody, child support and alimony in Florida. Those issues do not address the division of assets and debts in Florida which the parties will have to address. This division can be especially difficult when a spouse is hiding assets. Many times in a Florida divorce, one spouse is the primary money manager, and the other spouse has very little or nothing to do with the finances in the marriage. But in divorce in Jacksonville, Florida, both spouses have to know about all of the assets and liabilities as this will affect how the parties’ property is divided and determine the amount of alimony to which a spouse may be entitled. You should contact a Florida divorce attorney to ensure proper reporting of all assets and debts so that the final outcome is truly fair and equitable for you.

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