What is equitable distribution of Marital Assets, and How Does the Court determine it?
People are sometimes confused by the term “equitable distribution” when it comes to the dispersing of assets and liabilities during and following a dissolution of marriage (divorce). Equitable means fair, not necessarily equal. The only states still using equal distribution are Arizona, Texas, Nevada, Oregon, California, Wisconsin, New Mexico, Louisiana, and Wyoming, with Alaska giving a choice as to which distribution method to use to the couple. Each state has its guidelines on how equitable distribution will work, so that this article will focus on Florida.
The first item on the agenda is to determine which assets and which liabilities (debts) are marital and which are nonmarital. A general rule of thumb is that any asset or liability that was owned and can be proven as such before the marriage took place is nonmarital and belongs solely to the party of ownership. Of course, this ownership must be proven with proof like a dated receipt in the party’s name, a dated and signed document of ownership such as car title, or a verified family heirloom. Any asset or liability obtained following the marriage, including putting what might have been nonmarital such as a home in both party’s names, will be considered marital and be subject to equitable distribution. Many couples, especially those who have been married before and are older, will create a prenuptial or postnuptial agreement to help determine ownership if their marriage fails.
While marital assets and liabilities are often divided 50/50, such as money in a savings account or a credit card debt, there are times when the concept of “fair” is used. An example of this is giving one spouse the washer and the other the dryer or one spouse the yacht and the other spouse the family summer cottage. Too, it will make a difference if it can be proven that one of the parties spent a great deal of marital money on personal items while the other party did not. Fair division would then be to give the less extravagant party a greater part of the household belongings.
Division of marital assets and liabilities can be done in two ways in Florida. Almost all jurisdictions in Florida require mediation before a divorce case can set a court date. During mediation, the couple, with the guidance of their attorney and the overseeing of the mediator (a mediator makes no decisions for either party but encourages cooperation and compromise while keeping conversations civil), can decide for themselves how their marital assets and debts will be divided. If this way doesn’t work and the case moves forward to the court, a judge will decide for the couple who gets what and who will pay for what. No party will get everything they think they should have but agreeing in mediation is almost always a better outcome. Judges are human and have bad days and may not like a party’s attitude, which will then influence their decision.
Equitable distribution is a very tricky aspect of a divorce, especially if the divorce ends a lengthy marriage and there have been years of accumulation of assets and liabilities. Even determining which assets and liabilities are marital and nonmarital takes a legal professional in Family Law to help sort out. Choose an attorney to represent you who understands the ins and outs of equitable distribution and has a firm knowledge of how to best proceed in obtaining a marital agreement in mediation. Once a divorce is final, there is no going back (unless there is proven fraud) to claim an asset or argue a liability. Expert Family Law representation is the key to your success.
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