What is Equitable Distribution?
Florida is a state that requires equitable distribution following the termination of a marriage. Equitable distribution is a process used during divorce proceedings to divide property and debt obligations. It does not necessarily mean equal division such as a 50/50 split, rather it means that a fair division must be made. Equitable distribution is often hard to predict because many of the factors taken into consideration can be subjective.
It is important to remember that equitable distribution is used by a judge to determine the allocation of property and debts after failed negotiations. Distribution can be determined beforehand, and the spouses are free to divide their property and debts as they please through a marital settlement agreement.
It is highly encouraged for spouses to come to a Marital Settlement Agreement that will outline the distribution of marital assets and debts, and parenting decisions without getting a judge involved. A judge’s decision may result in neither spouse being happy with the outcome
Marital Property vs. Non-Marital Property
Before a judge can award a judgement for equitable distribution, a determination must be made regarding marital and non-marital property. Marital property is outlined via Florida statutes.
-Assets acquired during the marriage
This typically includes any property or vehicles purchased during the marriage. Both spouses names do not need to be present on any purchase agreements or titles to the property for it to be considered marital property.
-Enhancements made by both parties to non-marital assets
One example of this would be if one spouse owns a home prior to the marriage. If that home becomes more valuable through home improvement by one or both of the spouses during the marriage (through work or financial contributions), the increase in value of that home now becomes marital property.
Any items purchased and gifted to another spouse during a marriage are considered marital property even if only one spouse purchased the property, and only one spouse’s name appears on any relevant paperwork.
-Real and Personal Property held as tenants by entireties
Whether acquired prior to or during the marriage, real and personal property held as tenants by entireties is considered to be a marital asset.
IRA, 401(k), 403(b), SEP, KEOGH, retirement plans, etc. are divided according to any benefits, rights and funds accrued during the marriage.
-Assets acquired before the marriage
Any property acquired before the marriage is considered non-marital property, subject so some exceptions.
-Property acquired by non-spousal gift or inheritance
Any gifts received by someone other than the spouse, or in the case of an inheritance are typically not treated as marital property.
-Income derived from non-marital assets
If one spouse owns a rental property, any income derived from that property will be considered non-marital if the income was not used or relied upon within the marriage.
-Excluded assets via a prenuptial agreement
Spouses can outline assets to be excluded during a divorce if they have been outlined in a valid prenuptial agreement. Through this agreement, even property that typically would have been considered marital property can be left out, given that the agreement was legally entered.
Factors Taken into Consideration for Equitable Distribution
There are several factors taken into consideration by a judge, outlined below according to Florida statutes:
- The contribution to the marriage by each spouse, including contributions to the care and education of the children and services as homemaker.
- The economic circumstances of the parties.
- The duration of the marriage.
- Any interruption of personal careers or educational opportunities of either party.
- The contribution of one spouse to the personal career or educational opportunity of the other spouse.
- The desirability of retaining any asset, including an interest in a business, corporation, or professional practice, intact and free from any claim or interference by the other party.
- The contribution of each spouse to the acquisition, enhancement, and production of income or the improvement of, or the incurring of liabilities to, both the marital assets and the nonmarital assets of the parties.
- The desirability of retaining the marital home as a residence for any dependent child of the marriage, or any other party, when it would be equitable to do so, it is in the best interest of the child or that party, and it is financially feasible for the parties to maintain the residence until the child is emancipated or until exclusive possession is otherwise terminated by a court of competent jurisdiction. In making this determination, the court shall first determine if it would be in the best interest of the dependent child to remain in the marital home; and, if not, whether other equities would be served by giving any other party exclusive use and possession of the marital home.
- The intentional dissipation, waste, depletion, or destruction of marital assets after the filing of the petition or within 2 years prior to the filing of the petition.
- Any other factors necessary to do equity and justice between the parties.
Following equitable distribution, the courts will take into consideration any children involved in the divorce. Custody and child support will always take priority over distribution of assets and debts. If there is a marital home involved, the home will typically be awarded to the parent who will be caring for the children the majority of the time.
Understanding how equitable distribution works and your options to divide property and debts is an important task that Seff & Capizzi Law Group considers during any divorce. At Seff & Capizzi Law Group, we regularly assist clients with their divorce cases and provide valuable information for those that need assistance in understanding how to approach this situation in their own lives.
If you need assistance with your divorce, please call us at (954) 920-9220. We have over 35 years of experience and offer a free consultation. Click here for more information about our family law practice and how Seff & Capizzi can help.