Every married couple has assets and debts. When you get a divorce, the judge will divide your assets and debts. Florida uses a system called “equitable distribution” to divide the marital assets and debts. Equitable is just another word for fair.
First, the judge will only divide the marital assets. Marital assets are those assets that are acquired during the marriage. Of course, there are exceptions to this definition (e.g. inheritance from a parent to only one spouse).
Typically, marital assets are acquired (bought) with money you receive from working. A specific item is not separate property just because a spouse bought that item with money they earned from their job. Similarly, the contents of a bank account are not separate property just because only one spouse is listed as the owner of the account.
Separate property are assets that you bring into a marriage. Examples are a car, home, bank accounts, retirement accounts, and jewelry. Unfortunately, there are instances where separate property can become marital property or partial marital property.
The primary example of separate property becoming marital property occurs when you place marital funds (e.g. your paychecks) into an account that the judge would consider separate (e.g. an inheritance or an account that you had prior to the marriage). If you were to place marital funds in this account and later withdraw funds, did you remove the marital funds or the separate funds? If a judge cannot answer the question, the account may be considered marital property.
Another instance is where an asset is owned prior to the marriage, but increases in value during the marriage. For example, assume that you have a 401(k) with a balance of $50,000 prior to the marriage. During the marriage, the 401(k) increases in value to $70,000 due to your contributions and market forces. In this instance, your spouse would be entitled to 50% of the increase in value – or $10,000.
Since “equitable distribution” is based on the concept of fairness, the Florida Statutes provide the following set of factors that the judge must consider when deciding who gets what property:
- each spouse’s individual contribution to the whole (including the time spent as a homemaker)
- the duration of your marriage
- each spouse’s financial situation
- if one spouse contributed to the career or educational opportunities of the other spouse
- the impact on any children if the court were to delay or forego the sale of the marital home
- whether an asset produces income or debt
It is possible in a 50/50 equitable distribution for a judge would give you more than 50% of the assets. However, you would very likely get more than 50% of the debts – so that your “bottom line” is the same as that of the other party.
Lastly, it is important to remember that there are often multiple “fair” ways to divide a couple’s assets and debts. Often both spouses present the judge with “fair” proposed distributions. Unless both spouses want a trial (and the cost that goes with it), an agreement that you can live with can usually be reached at a mediation where there is a little give and take by both spouses.