Articles Posted in Property Division

Marriage has long been described as the union of two people, which in the end gives rise to solidarity of purpose and existence, creating one stronger unit.  With the emphasis put on the union, you can imagine that undoing the union is serious business.  During divorces, emotions run high for different reasons.  The financial aspect of ending the marriage relationship is high on the list of stressors.  For example, if a household brings in $100,000 per year between the husband and the wife, splitting that income in two and trying to maintain the same standard of living is hard to to do.  As a Jacksonville divorce lawyer, I’ve encountered this dilemma many times.  Intertwined in the issue of income splitting is the issue of dividing marital debt (and marital assets, but in this article the focus will be on marital debt).

Marital Debt

Marital Debt

According to Florida Statute 61.075, “All assets acquired and liabilities incurred by either spouse subsequent to the date of the marriage and not specifically established as non-marital assets or liabilities are presumed to be marital assets and liabilities.”  In other words, both parties are responsible for debt created by one or both of them, unless it can be shown that one of them should be solely responsible for the debt.  This means proving that it is non-marital debt.  The person who wants the debt to be considered non-marital debt has the burden to prove that it is non-marital debt.

Here’s something that’s not news to anyone going through the process: divorce can be expensive. When a couple decides it’s time to part ways, it is almost always for emotional reasons but these issues can quickly morph into fights over money. The result can be financial devastation even in splits that started amicably. Everybody loses, except the attorneys.

The good news is that it doesn’t have to be this way. Divorce doesn’t have to destroy both parties financially but the decision rests in their hands.

Though it’s often hard to do, a divorce should be unemotional. There are years of hurt and anger built up, but the split needs to be seen as a business decision. Financial decisions should be made by keeping your emotions outside of the legal process, whether through therapy or exercise.

One of the most common questions that divorce attorneys hear is: “What will happen to our house?” While courts do have the power to order the sale of the marital residence, what happens to the house usually is left up to the parties themselves. Typically, the house situation has a lot to do with whether there are children residing in the home and whether one party can afford to buy out the interest of the other, either through cash or by offsetting the equity (or debt) with other assets.

As we mentioned, the first consideration is usually whether minor children are residing in the home. If there are children in the house and it has been their home for a significant period of time, the courts are often reluctant to order the property sold and the children uprooted. Usually, the Court will give the party residing in the house a chance to come up with a plan to make the mortgage payments and retain the property.

Judges prefer to have the parties themselves come up with a plan regarding the house than have to order the home sold. Even if the parties refuse to decide amongst themselves, a judge may still decide no to order a sale until the children are grown and gone. The court is also able to offset the equity in the house against the value of other assets (including retirement funds, stocks, bonds, etc.).

ed.jpgWhether 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.”

The short answer to this question is, unfortunately, yes. A mortgage contract cannot be negated by a divorce. If, in a divorce, one party is granted sole exclusive use and possession of the former marital home the other party could still be held responsible in the event that the other spouse defaults on the mortgage.

Thus, even if the former marital home is deeded to one party the other party’s name is still on the mortgage and can still be held responsible. If the party with possession of the home fails to pay the mortgage, the bank has the option to come after the other party.

During the divorce proceedings the party without the home can ask for their name to be removed but this is likely not to occur. Also, the Court can order the party with possession of the home to try and refinance to get the other party’s name off the mortgage, but in todays market this is not a likely solution.

st. augustine.jpgMany couples considering divorce are concerned that beginning divorce proceedings will mean that they have to put their lives on hold while their lawyers drag them through months of court battles, legal struggles and attorney fees. Not all divorces have to proceed this way. Many couples considering divorce are exploring the concept of uncontested divorce. Uncontested divorce is a fresh approach to divorce, one without the strain and discord normally associated with a traditional divorce.

In an uncontested divorce an attorney will draft a Marital Settlement Agreement, which identifies and addresses all issues between the divorcing parties including division of their mutual debts, properties, definitions of alimony, etc. Both parties consent to and sign the document which will be filed with the court. The Court adopts the agreement and enters it as part of the Court’s divorce decree of Dissolution of Marriage.

If you are considering a St. Augustine Divorce, it may be in your best interest to enlist the guidance of an attorney. An experienced St. Augustine Divorce Attorney can prepare and help you and your spouse carry out an uncontested divorce that is simple and affordable. If you think an uncontested divorce may be right for you, contact a St. Augustine Divorce Attorney today for a complimentary consultation to discuss your options.

A few weeks ago a report came out that Dmitry Rybolovlev, one of the 100 richest people in the world, had been accused of hiding close to $100 million dollars during his divorce. If you are in a situation involving such incredible wealth, you should seriously consider a prenuptial agreement, which a Jacksonville, Florida Family Law Attorney or a Jacksonville, Florida Asset Protection Attorney can help draw up for you.

However, even if you are not on the Forbe’s richest list, you obviously do not want your spouse to hide assets during your divorce. This can negatively affect division of other assets, which would not be good for you. Plus, this would be fraudulent to the court. But how do you know when your spouse is hiding assets? A recent Forbes article outlines some of the red flags. Many of the tips are somewhat obvious, but may be difficult to see unless you are looking at it from an outside prospective. Here are some tips and warnings to look for:

If your spouse maintains total control of your joint bank account information, make sure you keep track of the bank statements. Most banks have online services, so you should be able to monitor it from there. If your spouse denies you access to the password, but your name is nevertheless on the account, go to your bank and ask for a statement.

mortgage.jpgAs an Orange Park Divorce Lawyer I often hear client’s ask, “If my spouse gets to keep the house in the divorce, can I still be held responsible for the mortgage?” The short answer to this question is, unfortunately, yes. If, in a divorce, one party is granted sole exclusive use and possession of the former marital home the other party could still be held liable in the event of a default on the mortgage.

Thus, even if the former marital home is deeded to one party the other party’s name is still on the mortgage and can still be held responsible. If the party with possession of the home fails to pay the mortgage, the bank has the option to come after the other party.

During the divorce proceedings the party without the home can ask for their name to be removed but this is unlikely to occur. Also, the Court can order the party with possession of the home to try and refinance to get the other party’s name off the mortgage, but in todays market this is rarely successful.

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.”

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.

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