Articles Posted in Equitable Distribution

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When your spouse and you are going through a divorce, there are many things that you must inevitably face and certain other things that you would prefer not to face (but many spouses do). For many divorcing couples, the separation period can be a period of high financial stress. Sometimes, marital assets may be dissipated in order to pay for the increased amount of expenses created by the separation. Other times, marital assets get dissipated due to the misconduct of one of the spouses. In these situations, one spouse may ask the court to resolve whether or not that dissipated asset is included in the equitable distribution. For advice and representation with regard to the dissipation of assets and equitable distribution questions and issues, make sure to contact an experienced Florida equitable distribution attorney.

A divorce case from the Florida Panhandle was an example of what isn’t misconduct when it comes to asset dissipation. During the period of separation and litigation of the divorce case, the husband, Justin, withdrew a substantial amount of funds from a thrift savings plan he had through his employer, the U.S. Air Force. The wife, Janie, allegedly knew nothing of the withdrawal. Withdrawals normally required both spouses’ signatures, but Justin was able to obtain a waiver that allowed him to make the withdrawals without Janie’s signature.

According to Justin, he made the $17,000 withdrawal (and used the money) to pay marital debts along with the living expenses he was incurring during the pendency of the divorce. At the couple’s divorce trial, though, the court concluded that the wife was entitled to a share of the withdrawal (and the $3,000 withdrawal penalty) Justin made, so the court ordered the husband to pay the wife $10,000.

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In some divorce cases, the most strongly contested issue may be the division of property. When it comes to the equitable distribution of assets, the law requires the courts to determine whether an asset is marital or non-marital. Achieving favorable rulings on these determinations can be worth millions in some situations. That is one reason why it pays to have an experienced Florida property division attorney on your side representing you.

One case in which this was true was the divorce of Nancy and Timothy. Nancy filed for divorce from Timothy in 2010 after 23 years of marriage. At that time, the couple had amassed substantial wealth, with a net worth in excess of $4.8 million. The couple had a valid premarital agreement that stated that each spouse, in the event of a divorce, would keep his or her premarital assets and the appreciation from them.

The dispute that emerged in the couple’s case involved two pieces of property. One parcel was a vacant lot in Wellington when the husband bought it but had become a working horse farm (and the couple’s primary marital residence) worth $4.5 million by the time of the divorce. The second property was in upstate New York and had appreciated during the marriage from $490,000 at the time of the purchase to $2.5 million at the time of the divorce.

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When your spouse and you are involved in a dispute over the equitable distribution of your marital assets, there are many different areas in which you’ll need to present evidence in order to achieve a successful result. For every determination you want a judge to make, you need to be sure you have the proof necessary to achieve that outcome. Making sure that your case has the right type and right amount of the right evidence is just one of many areas in which an experienced Florida equitable distribution attorney can help.

One example of just how much proof may be needed was the result in the case of a couple named William and Nancy. The pair wed in early 2003 but separated in late 2006. A few months later, William discovered that Nancy was actually 10 years older than what she told him she was when they met (and what she stated on the couple’s marriage application).

At the divorce trial, the main issue was the equitable distribution of the husband’s substantial stock portfolio. That portfolio had appreciated by more than $3.6 million during the marriage, and the wife had argued to the trial judge that this entire $3.6 million sum was a marital asset that should be equitably distributed.

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When you are going through a divorce, there are a number of financial factors that will influence the outcome of your case. This is especially true if one of you or your spouse owns a business. Even if the business itself is a non-marital asset, there may be a portion of that business’ appreciation in value that is a marital asset, and that can have a substantial impact on the equitable distribution ordered in your case. Getting the most from your equitable distribution case may mean hiring business valuation experts and definitely means relying upon legal representation from an experienced Florida equitable distribution attorney.

Recently, the First District Court of Appeal addressed a case in which a non-marital business factored into the couple’s equitable distribution. Darla filed for divorce from Rodney in 2013 after six years of marriage. Rodney was the owner of his own business, an engineering firm bearing his name. Rodney had owned the business since 1995, more than a decade before he married Darla. The evidence that the spouses submitted showed that the business was profitable from 2007 to 2012, but it lost money in 2013. The trial judge assessed the business as having a positive value and included the amount of the business value’s enhancement in the couple’s equitable distribution.

The husband appealed, and he won. The outcome of Rodney and Darla’s case is a useful one for those who may be going through a divorce in which one or both spouses are owners of businesses that are not marital assets. If you find yourself in that position, and you believe that the value of that business has been enhanced as a result of your or your spouse’s marital efforts, it is essential to understand what you have to prove to the court.

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A divorce is often an emotionally challenging time. A divorce can also present legal and financial challenges. This can be especially true if one of the spouses was a business owner or part-owner during the marriage. Determining whether or not the business was a marital asset and, if it wasn’t, determining which amount of the business’ increase in worth was due to marital efforts can be complicated and require skilled experts and intensive litigation in order to protect your rights and interests fully. To make sure that you get your appropriate share of a non-marital business as part of your equitable distribution, you should make sure to work with a skilled and knowledgeable Florida property division attorney.

A case from the Tampa Bay area provides an example of how challenging these disputes can be. Daniel and Laura were married for 14 years when the husband filed for divorce in the fall of 2012. They reached an agreement on many things that couples dispute, like the marital residence and the kids. There was one issue, though, on which they could not agree, and it related to Daniel’s family’s business. Daniel’s family owned a boat dealership business in Clearwater. He and Laura could not come to an agreement regarding the value of his ownership stake in the business.

The hearing revealed that Daniel’s father started the business and that Daniel and his siblings had worked there since they were teenagers. At various intervals, the father would give the children gifts of stock in the company. When Daniel married, he still owned only a small amount of stock. After the father died, Daniel owned 47.5% of the company’s stock.

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Any time a couple decides to divorce, going through that process can be very challenging. That is especially true if the spouses shared not only a marriage but also ownership of a business. There are various options for business co-owners who are also a divorcing couple. Depending on the nature of the divorce and the specifics of the spouses’ ownership interests in the business, some options may make more sense than others. For advice about which strategy would be the best for you, consult an experienced Florida divorce attorney.

If you both own your business as co-owners, you have several ways that you can handle that business in the wake of the end of your marriage. One is for both of you to remain working in the business. This can be uncomfortable, awkward, and not good for business. Bloomberg recently reported on one resort and casino entity in Nevada in which such a complicated dynamic existed. The ex-husband divorced the ex-wife, who was also a co-founder, and later remarried a much younger woman. That new dynamic was a recipe for difficulty as, in “what would be a difficult position for anyone,” the new turn of events meant that the ex-wife, the ex-husband, and the husband’s new wife were all attending company meetings together, according to the report. In addition to business management complications, choosing to stay as co-owners even after a divorce can possibly also have negative tax consequences.

As opposed to this strategy, a divorcing couple may want to consider other options. One of those other options is for one spouse to leave the business and for the spouse who remains to buy out his or her interest in the entity. If one spouse has historically had a much more active role in the day-to-day operation of the business, this option could make sense. To do this properly, you may need to retain a business appraiser to determine the value of the entity. If you both can agree on one appraiser, that saves the cost of hiring two appraisers, which could be a significant savings. Once the proper dollar values have been assigned, you can buy out your spouse (or vice versa). Alternatively, you and your spouse could do an asset exchange in order for you to acquire your spouse’s ownership stake in the business.