Articles Posted in Disposition of Assets

Mediation is an alternative dispute resolution that is mandatory in a Florida divorce, paternity, or modification case, but many people do not see the process as the benefit it is.  During mediation, the two parties will meet with a mediator who is an unbiased and uninterested person in the case.  The mediator will try and help the parties resolve all disputes related to the family law case.  If an agreement is reached, it is drafted and submitted to the Court for approval so the case can be closed.  While the process is straightforward, there are still many myths related to the process.  Your Jacksonville family attorney can assist you in understanding the mediation process.  Below are the biggest myths about family law mediation in Florida, and the truth behind them.

The Mediator Will Make All the Decisions

This is simply untrue.  Mediators do not make any of the decisions when they meet with parties going through a divorce, paternity, or modification case.  They cannot force either party to do, or not do, anything.  Instead, they are only there to help you and facilitate you and your spouse, ex-spouse, or co-parent to reach an agreement.  If you cannot reach an agreement and your case requires litigation, it is the Judge that will make all the decisions.  Your Jacksonville family attorney is here to assist you in mediation and to represent you in any litigation should you not reach agreement.

“I signed a Quitclaim deed so I’m not responsible for the mortgage anymore”.  That  statement is one of the most common mistakes that people make when it comes to Real Estate transactions.  Quitclaim deeds are used most often between family members such as an owner of property adding their spouse to property after marriage or transferring property in a dissolution of marriage.  Many people think that signing a quitclaim deed relinquishes them from any obligation regarding the property that is the subject of the quitclaim deed.  A quitclaim deed can quickly remove you from a property’s title and terminate your ownership interests. A quitclaim does not however, remove you from the mortgage or the responsibility to make payments.  Your Jacksonville Family law attorney can assist you with understanding and preparing the correct deed.

Another common mistake is that the Grantee of a quitclaim deed gets a right to the property when they really do not have any guarantee that he/she actually has an interest in anything.  A person that transfers property by quitclaim deed makes no promises that he or she owns or has clear title to the property. So the drawback, quite simply, is that quitclaim deeds offer the grantee/recipient no protection or guarantees whatsoever about the property or their ownership of it. Maybe the grantor did not own the property at all, or maybe they only had partial ownership.  A quitclaim deed transfers title but makes no promises at all about the owner’s title. It essentially says that I am transferring whatever interest I have in the property described to whoever is the Grantee.   A person who signs a quitclaim deed to transfer property they do not own, results in no title at all being transferred since there is no actual ownership interest. The quitclaim deed only transfers the type of title you own.  A property search can be done to determine what ownership interest the grantor of a Quitclaim deed actually has in the property.  Your Jacksonville Family law attorney can assist you with the research regarding the property and drafting the appropriate deed.

Quitclaim deeds are also utilized as an estate planning tool instead of leaving property to family members through a Will or other estate document.  Instead, the property owner simply signs a Quitclaim deed, which must be notarized and recorded with the county recorder. Quitclaim deeds are not taxable when they transfer ownership to a spouse or a qualifying charity. Other transactions may be liable to property and gift taxes. Once the quitclaim deed is signed and notarized, it is a valid legal document.  The Grantee must also have the quitclaim deed recorded in the county recorder’s office or with the county clerk in order for the document to take full legal effect and notify the public of the transfer of interest in the property.  If you want to make sure that you have the appropriate deed and it is filed correctly, call your Jacksonville Family law attorney to assist you.

How do you and your spouse share the finances?

Most married couples have their finances mixed together. For instance, it is not unusual for a married couple to share credit cards, savings and checking accounts, real estate, and other property.  When parties go through a dissolution, these finances must be untangled.  The process of distributing assets to each party is known as equitable distribution.  The process of exchanging financial information with the opposing party is known as mandatory disclosure.  The Family Law Rule of Procedure, Rule 12.285 details what information must be disclosed as well as the time periods for disclosure.

What forms do you need to complete?

Few people want to accept responsibility for a lifelong obligation that they were not responsible for.  There is more than one way under Florida law to create a parental relationship with a child.  Not all relationships in today’s society follow the model that involved a two parent family whereby the husband was the bread winner and the wife was a stay at home mother.  Today, the norm has changed, and single parent households are much more commonplace than they were traditionally. 

There are a number of ways that paternity can be established.  When a woman is married and she becomes pregnant, there is a legal presumption that the husband is the father.  This is true even where the husband could not physically have impregnated the wife.  Section 742.10 of the Florida Statutes covers all of the ways that paternity of a child can be established.  In short, paternity can be established when a married woman has a child, by consent, by court order, or by the legal father signing the birth certificate and notarized documents admitting paternity. 

When a woman has a child out of wedlock and applies for governmental assistance, she may find that the agency or agencies she is applying through will require her to participate in a legal proceeding to establish the paternity of the child.  In part, this is because the government wants to make the father responsible for supporting the child.  Both parents are responsible for their child and a father or mother can be required to support their child until they reach majority.  In some rare cases, they may have legal responsibility beyond the age of majority.  The author of this article has handled numerous child support cases over the last 16 years and he has seen some people have their lives wrecked after they were required to pay child support (an Obligor).  When an Obligor discovers that the child they are supporting is not theirs, disestablishing paternity may be an option for them.  Although disestablishing paternity will terminate an ongoing support obligation, it will not extinguish any child support obligation which has accrued.  Even when disestablishing paternity is successful, an otherwise Obligor may still have to pay a large arrearage. 

There may be some negative stereotypes that are associated with Prenuptial Agreements.  Typically, neither party wants to detract from the blissful atmosphere typical prior to a wedding.  However, a Prenuptial Agreement can also help preserve a marriage.  This is because there is certainty as to how things will terminate should the marriage not last.

The thought alone of creating a prenuptial agreement can cast a negative light upon a wedding.  To some, the contemplation of a prenuptial places a negative light upon wedding preparations and the future of the relationship.  Having to plan for divorce is an admission that a relationship is not permanent.  That said, it is far better to deal with the details of how a relationship is going to end (should it end) while a couple is reasonable and loving compared with being negatively affected by the hostilities and uncertainties of divorce.

In Florida, there are several types of alimony that courts may consider.  There are factors that affect the amount of alimony that can be provided for such as, length of a marriage, the equality of earning ability between the spouses, and the assets that a court must divide.  Florida law creates a rebuttable presumption against permanent alimony when a marriage is 7 years or less, which under the Florida Statutes is defined as a short term marriage.  However, there is a rebuttable presumption for permanent alimony awards in marriages that are long term (greater than 17 years).  Moderate term marriages are defined as between 7 and 17 years and no presumption exists.

Family law clients always ask me, “What is a QDRO?”  (pronounced informally “Quad-Row”) QDRO is an acronym for Qualified Domestic Relations Order, which is a court order that grants a party a right to a portion of the retirement benefits his or her former spouse has earned through participation in an employer-sponsored retirement plan. Federal law states that a retirement benefit can only be divided between former spouses if there is a QDRO.  Retirement plans can be a huge asset in a marriage that may be forgotten in a divorce, so its key for clients to educate themselves on division of this marital asset.

QDRO divorceIn a divorce, a family law attorney needs to determine what retirement plan each party owns through mandatory disclosure by the formal, legal plan name.  It is important to know the value of each plan, the valuation date used to value the plan, what ancillary benefits are associated with the plan (for example, market fluctuations, survivor benefits, subsidies/supplements, and interest credits), the correct method of division for the plan, and will the retirement plan accept a QDRO.  Disclosure is important in obtaining this information and the plan’s summary description. It is also important to obtain the plan’s divorce transfer and QDRO guidelines, if available.  Obtaining a statement for the plan as of your desired valuation date will assist you in a smooth QDRO process.  For federal government employees, retirement plans are divided by a COAP, which stands for Court Order Acceptable for Processing.

Your divorce decree will not be enough to divide a retirement benefit in most cases.  A QDRO is a separate document from the divorce decree. It is always better to file a QDRO with the retirement plan as soon as possible.  If the former spouse retires after the divorce is final, and the QDRO has not been filed with the plan, the plan will begin paying out the benefit to the former spouse and only future payments will be affected.

That dreaded word in a divorce:  Alimony. Alimony is determined by the court after looking at one party’s actual need versus one party’s ability to pay. After equitable distribution is determined, the court reviews what money is left over, if anything, and considers the parties’ circumstances to come up with a fair award.  Some questions to answer:

  • Length of the marriage
  • Standard of living the parties are accustomed to

Divorces in Florida typically split the parties’ assets and liabilities down the middle as much as possible.  Determining what is a marital asset or liability or a non-marital asset or liability can be key to whether an asset or liability will be considered in the calculations.  Before filing for divorce, you should consider the following items when thinking about equitable distribution:

  • Previous Inheritance
  • Marital Home

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.

divorceIn Mitchell v. Mitchell, 841 So.2d 564 (Fla. 2ndDCA 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.

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.

SupportIn Oluwek v. Oluwek, 2 So.3d 1038 (Fla. 2ndDCA 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. 4thDCA 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. 4thDCA 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.

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