So what are the general principals of property division that the court’s in Florida follow?

ASSETS AND LIABILITIES

Property includes everything that you have that could be considered an asset such as your home, cars (see also Rights to Vehicle in Divorce), timeshares, investment property, investment accounts, retirements assets, stocks, pets, bank accounts, equipment, your business, life insurance cash value, pension plans, accounts receivable, furniture, jewelry, etc.

The other item that must be considered are your liabilities.

Home and what do you owe?

This must come into the mix. Often the parties fail to insure that the person to whom the debt was assigned in the marital settlement agreement or the divorce decree properly pays the debt.

Remember: a creditor is not bound by the agreement between you and your ex or by the court order.

If it is a joint liability, it will look to you that the debt is not paid regardless of any agreement or Court order. After you have listed all your assets and liabilities, the Courts will look at whether the property is marital or non-marital property. Marital property is subject to be divided by the Court or by the parties in the marital settlement agreement. Non-marital property is not divided at all.

Non-Marital Assets and Liabilities include:
•Those acquired or incurred by either spouse prior to the marriage
•As it is acquired by either spouse by non interspousal gifts or inheritance
•Income derived from non-marital assets during the marriage; unless the income was used or relied upon by the parties as a marital asset, for example if they deposited it into a marital account
•Assets and liabilities excluded from marital assets and liabilities by valid written agreement of the parties such as a pre-nuptial agreement

Marital Assets and Liabilities include:
•Those acquired or incurred either or both of the spouses during the marriage
•Enhancement of or act of appreciation in, value of a non-marital asset as a result of the efforts of either spouse during the marriage or from the contribution to an expenditure of marital funds or other marital assets
•Inter-spousal gifts during the marriage
•All vested and non-vested benefits or funds occurred during the marriage in retirement, pension, profit sharing, annuity, deferred compensation, and or insurance plans or programs
•Property held by the parties in tenancy by the entirety, or otherwise commingled, or acquired during or prior to the marriage, is presumed a marital asset, although one spouse may claim contrary and prove special equity. (however if a prenuptial contract holds otherwise this is not the case)

PROPERTY DIVISION

Property division example:

Adam and Eve have been married for ten (10) years. (Ten years is a grey area when it comes to alimony). Adam is employed as a bagger for Publix. They have a joint banking account with a ten thousand dollar ($10,000.00) balance and a credit union account that John started four (4) years prior to the marriage which is now held in their joint names. Every month Adam places $50.00 in the credit union savings account from his wages. Eve has never deposited any funds into that account. Eve’s mother died five (5) years ago and left her twenty-five thousand dollars ($25,000.00); she used five thousand dollars ($5,000.00) to start a new business which has been successful. Before starting her business she had been a homemaker. Now she is a nail tech. A California nail chain has offered to purchase her nail business for $100,000.00. With the remainder of her money from her mother’s inheritance Eve bought Adam a new car to replace the old one that he had before they got married. Adam has a pension from Publix where he has worked for the past fifteen (15) years. Adam plans to retire when he reaches thirty-five years (35) with the company. Adam and Eve have a joint credit card which has a balance of three hundred dollars ($300.00). Eve also has a credit card in her name which she used for household purposes which has a balance of five hundred dollars ($500.00).

In figuring out what property is marital and what property is non-marital it helps to determine when and where the assets arose.

The joint checking account arose during the marriage. It is presumed to be marital even if consists of commingled funds from non-marital property where the funds have been used for joint expenses. However, non-commingled funds even if jointly titled may be traced to establish that they are non-marital. The party trying to establish that they are non-marital funds would need to prove that a gift of the funds was not intended by the act of jointly-titling the account.

The savings account started out as a non-marital asset, it was held before the marriage began. However, wages during the marriage are marital property. Adam has commingled marital funds, his wages with non-marital fund with the account held before he married Eve, in addition to jointly-titling the account in both names. So these funds are presumed to be marital.

Eve’s inheritance is non-marital property. It arose from a source outside of the marriage and was not a gift to both spouses or from one spouse to the other. Her business is marital property, less the original non-marital investment. Her business is now worth one hundred thousand dollars ($100,000.00) of which the balance minus the initial investment is marital property. This appreciation to the value of a non-marital property due to the results of one of the spouses during the marriage is marital property.

The car which Eve purchased from her remaining inheritance would have been non-marital if she had segregated it and not used it for the marriage. Instead it became an inner spousal gift during the marriage. It is marital property to the extent of its current appraised value.

Adam’s pension from Publix is part marital and part non-marital:

He earned part of pension before the marriage and some of it during the marriage and he expects to continue to add to it after his divorce. For retirement pension plans which will be divided sometime in the future Eve would be entitled to fifty percent (50% which is her half of the marital portion. The marital portion is determined by usually a financial planner who will determine how much of the pension was contributed during the marriage to equal the marital portion and then Eve would receive half of that. For example if Adam had worked for ten years before the marriage for Publix and ten years during the marriage out of a total of thirty (30) years of service with Publix, under Florida law the portion would be one third of the total frozen as of the date of division. Thus Eve is entitled to fifty percent (50%) of one third of the benefits from the pension plan without appreciation for future gains after division. This is usually mapped out through a Quadro which is prepared in individual retirement plan accounts.

For retirement asset accounts that can be divided which can be divided and distributed now such as 401k and IRAs Eve would be entitled to 50% of the value on the date evaluation which is usually the date of separation unless the parties agree to some other fixed date. If the value of the 401Ks or IRAs can be fixed as of the date of the marriage. That amount is often consider non-marital and subtracted from the total to determine the martial portion which is subject to division.

The liabilities of the marriage are also subject to division. Liabilities incurred during the marriage regardless of the lack of knowledge of one of the spouses. The Court may however consider each spouses contribution to incurring the liability. If one spouse incurs the debt and primarily benefits from it the Court can make that person solely responsible with that liability.

Adam and Eve’s joint credit card debt incurred during the marriage is presumed as marital debt and that is subject to division. Eve’s card in her sole name was used to purchase items for the marriage so it is also consider a marital debt. However, if Adam and Eve agree to divide this debt and Adam later fails to pay on it Eve would be left solely liable on the debt with the credit card company. The recourse would be to try and recoup funds from Adam that she sent to the credit card collection action.

Real property purchased during the marriage and titled in both names is presumed to be marital property in Florida even if funded by only one spouse with pre-marital or non-marital funds. The burden is on that spouse to prove that no gift to the other spouse was intended by the joint-titling.

If real property is titled only in one spouses name but was acquired during the marriage or the real property was a non-marital but one spouse contributed labor or separate funds to enhance its value what then?

Special equity arises. Special equity is a judicial recognition that a spouse may have vested interest in property either brought into the marriage or acquired during the marriage, but who’s value was enhance due to a contribution of services or funds over and above marital duties. That spouse may have a vested right in property titled in the name of the other spouse or owned by the other spouse. Or that spouse may have more than a one half interest in jointly held property in addition to and separate from any amount awarded in equitable distribution.

What about proceeds from the sale of a marital home?

Whether a spouse is entitled to a credit or a set-off against the proceeds is based on a set of factors such as: (1) whether the exclusive use of possession of the marital home is awarded, and the basis such award; (2) whether alimony or child support is awarded to the spouse who is in possession of the home, and whether such alimony or child support is awarded to cover the mortgage, taxes or other home related expenses; (3) the value of the use and occupancy of the home to the spouse in possession and to the spouse not in possession. The Court will look to which party will be able to claim any home related tax deductions, including any capital gains, events and any other relevant factors that making its calculations to the right to a credit or set off against the marital portion.

You must remember that everyone’s situation is unique and that every property distribution of assets and liabilities in a divorce is not the same, however, they all have all have some degree of consistency by using the rules above.

Who gets what? What property division is the in the best interest for both of the parties? We have predicted how the Court will value your marital estate now what should you do about it?

Should your spouse take the car and the retirement funds while you keep the house? Or should you spilt it all down the middle to achieve an equitable distribution?

Unfortunately most marital property owned cannot be split straight down the middle due to the nature of the assets? Assets even those that may have the same value do not have the same emotional value or the same tax ramification and/of appreciated rates. They can be inherently unequal, although the same monetary value. If left to a Court, the marital estate may be divided in ways that are not best for the parties, either financial or emotionally. If your marital assets are not significant you may have a difficult time dividing and divvying up your marital estate with your ex-spouse to be. However, if you have a pension plan, a retirement account or a home you could be talking about a larger financial numbers than you may realize. Most individuals do not have the financial expertise or the time or the inclination to obtain such expertise. A certified divorce financial analyst (CDFA) may be worth the investment. Most attorneys do not do the tax ramifications involved in the equitable distributions plans and they leave that to an expert. An expert is needed for a calm rational approach to best structure an adequate division of the marital estate in a way that will entitle or benefit you the most financial in the long run to utilize the assets you receive to work for their best advantage to you.

At a hearing on the motion, the mother testified that she had told her husband of her affair with P.C.S. and that the husband did not wish to be identified as the father on the birth certificate. Genetic testing excluded the husband as the biological father of the child. The mother testified that after she had received those results, she had asked P.C.S. to submit to testing. He refused, although he acknowledged the child as his. The mother testified that during the four years of the child’s life, P.C.S. had undertaken some degree of involvement in the child’s life, giving the mother money to buy Christmas presents, providing unsigned cards and gifts of his own, visiting parks and playgrounds, and providing the mother with a cell phone to assure her and the child’s safety. The mother testified that the child referred to both the husband and P.C.S. as “Daddy.” Id. at *1.

By the time of trial, P.C.S. had ended the relationship with the mother; at about the same time, the husband separated from the mother. The trial court granted P.C.S.’s motion to dismiss the support action, finding that the presumption of paternity was controlling and, in the alternative, that the husband should be regarded as the child’s father under the doctrine of paternity by estoppel. The intermediate appellate court affirmed, differing with the trial court on the issue of whether the presumption of paternity should apply in a case in which the marriage was not being protected because the husband knew that the child was not his, but agreeing that paternity by estoppel applied, based on the husband’s actions of holding the child out as his own and providing support. The Pennsylvania Supreme Court allowed an appeal to consider application of the doctrine of paternity by estoppel to the case.

The mother argued that the child already knew P.C.S. as his father and that there was therefore “no concern over deleterious impact from a judicial determination to such effect,” and questioned the “application of a legal fiction in a circumstance in which all parties involved fully apprehend the true state of affairs, a circumstance which is becoming increasingly common.” Id. The mother also “asks that Pennsylvania law be modified to consider genetic testing, along with other factors, in determining paternity on a case-by-case basis.” Id.

In his argument, P.C.S. focused on the husband’s continued participation in the marriage and the relationship with the child during the first four years of the child’s life. P.C.S. argued that application of paternity by estoppel remains appropriate “because it recognizes the importance, in a child’s life, of a ‘psychological father’ who has provided nurturing and life’s necessities.” Id.

In its decision, the supreme court stated that “we believe there remains a role for paternity by estoppel in the Pennsylvania common law, in the absence of definitive legislative involvement.” Id. at *8. The court noted that in the case before it, neither P.C.S. nor the husband had testified at the trial regarding his relationship with the child, and concluded that “it is our considered view that the determination of paternity by estoppel should be better informed according to the actual best interests of the child, rather than by rote pronouncements grounded merely on the longevity of abstractly portrayed (and perhaps largely ostensible) parental relationships.” Id. at *9. The court also noted that it had the authority to appoint a guardian ad litem to advocate the child’s best interests “in concrete terms,” an action which had not been taken in the case. Id. at *10.

The court concluded: “In summary, paternity by estoppel continues to pertain in Pennsylvania, but it will apply only where it can be shown, on a developed record, that it is in the best interests of the involved child.” Id. at *11. The court remanded the case to the trial court to further develop the factual record.

Case No. 2D10-2231

DISTRICT COURT OF APPEAL OF FLORIDA SECOND DISTRICT

Opinion filed December 16, 2011
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED

Appeal from the Circuit Court for
Charlotte County; Keith R. Kyle, Judge.

Elizabeth A. Wolt of Wolt & Associates,
P.A., Fort Myers, for Appellant.

Charles T. Boyle of Farr, Farr, Emerich,
Hackett & Carr, P.A., Punta Gorda, for
Appellee.

NORTHCUTT, Judge.

Terry Zambuto challenges the alimony award and equitable distribution scheme prescribed in the judgment dissolving his marriage to Lisa Zambuto. We agree with his arguments in part, and we reverse for the trial court to make certain adjustments.

During the marriage, Mr. Zambuto earned a substantial income and Mrs. Zambuto stayed at home with three children. Mrs. Zambuto’s evidence established a

Page 2

level of need that resulted in a significant award of alimony. Mr. Zambuto has not demonstrated an abuse of discretion in the trial court’s alimony award generally; the evidence supported the court’s findings regarding Mr. Zambuto’s income and Mrs. Zambuto’s financial needs. See, e.g., Canakaris v. Canakaris, 382 So. 2d 1197 (Fla. 1980). But Mr. Zambuto has shown error in the court’s failure to account for Mrs. Zambuto’s earning capacity, which would reduce the amount of alimony necessary to meet her needs.

In calculating alimony, the court may attribute to a party an earning capacity that is supported by the evidence. LaFlam v. LaFlam, 854 So. 2d 809, 810 (Fla. 2d DCA 2003). Here, the testimony showed that Mrs. Zambuto has a college degree, was licensed as a certified nurse assistant, and operated a small home-based business. Mrs. Zambuto acknowledged that she could return to work full-time, and Mr. Zambuto presented a vocational expert who testified about Mrs. Zambuto’s earning ability and about various programs that would enable her to reenter the workforce. The court announced its intention to make an award of rehabilitative alimony and to charge Mrs. Zambuto with earnings based on a forty-hour work week. But the final judgment is silent on both points. This may have resulted from the parties’ indication to the court that they would provide it with updated information about a rehabilitation plan. Our record does not disclose what later transpired in that regard. Regardless, we reverse and remand for the court to address this issue, with leave to take additional evidence if necessary. See Nicholas v. Nicholas, 870 So. 2d 245, 248 (Fla. 2d DCA 2004) (noting that remand for additional evidence “is appropriate in order to cure a deficiency that was

Page 3

not attributable to the trial judge, but to one or both of the parties” (citing Batson v. Batson, 821 So. 2d 1141, 1143 (Fla. 5th DCA 2002) (Peterson, J., concurring))).

We also reverse a portion of the equitable distribution. The trial court assigned $90,000 to Mr. Zambuto for money he had spent during the marriage. This figure represented gambling losses over the last two years of the marriage. It is error to distribute dissipated funds to a party in the absence of misconduct. See Belford v. Belford, 51 So. 3d 1259, 1260 (Fla. 2d DCA 2011). “Misconduct is not shown by ‘mismanagement or simple squandering of marital assets in a manner of which the other spouse disapproves.’ ” Id. (quoting Roth v. Roth, 973 So. 2d 580, 585 (Fla. 2d DCA 2008)). “Rather, there must be a specific finding of intentional misconduct based on evidence showing that the marital funds were used for one party’s ‘own benefit and for a purpose unrelated to the marriage at a time when the marriage is undergoing an irreconcilable breakdown.’ ” Id. (quoting Roth, 973 So. 2d at 585).

Here, the gambling losses occurred while the marriage was intact, not while it was undergoing an irreconcilable breakdown. Mrs. Zambuto may well have disapproved of the extent of her husband’s gambling, but she also engaged in gambling activities. Moreover, Mr. Zambuto often gambled in the course of entertaining business clients, and as such the activity served a marital purpose. For these reasons, it was error to charge Mr. Zambuto’s share of the marital assets for the gambling losses. On remand, the court shall revisit the equitable distribution scheme and adjust it accordingly.

Reversed and remanded with directions.

DAVIS and BLACK, JJ., Concur.

1. I don’t care what it costs, I would rather give you everything than give anything to my wife/husband. The reality is that no matter what you pay, you are going to give something to your spouse. Things said in anger or in the heat of passion will be taken back later. This is especially true when a client receives my final bill. You may want revenge, but that rarely happens in a divorce. It is better to spend your hard-earned money on your family, for your children’s college education, or a vacation. Divorces are expensive enough, both economically and emotionally, without adding revenge to the equation.

2. I would like to bring my “friend” with me to the interview. We have attorney/client privilege, and once you bring a third party in, whether it’s a relative, a lover or whoever, the attorney/client privilege is gone. Unless a third party is officially associated with your case, there is no attorney/client privilege. If a friend or lover is in a meeting, and the case gets nasty, in the event a deposition or trial ever occurs, there is no privilege and all these secrets can spill out in a deposition or in court.

3. My friend or neighbor has told me to do this … There is nothing worse than having all your friends and relatives — who mean well — give you advice. Every divorce is different. Every divorce is unique. What makes sense for your friend and relative may make no sense for you. In addition, people often tell you only part of the story. You often get a lot of misinformation from well-meaning friends and relatives. Think about this: There are at least five variables in every divorce. The first is you — your personality, your reasons for wanting to save or end the marriage. The second variable is your spouse — his/her personality and motivations. The third is your attorney — the attorney’s personality, motivations and experience. Fourth is your spouse’s attorney. And last but not least, the fifth variable is the judge. Change any of these people and variables, and you may get a different result. For these reasons, sideline quarter backing is often very detrimental to your divorce.

4. I’m in a hurry to get this over with. Saying this immediately puts you at a disadvantage. Compromise is critical in any divorce. It is also necessary to come to a resolution. If you let your spouse know how desperate you are, and the other attorney knows that as well, then the divorce is going to cost you a lot more and you will regret it in the future. I was in court this past week on a case where my client had been in a hurry to end the marriage because of a new relationship. I have seen these scenarios time and again. In this case, the relationship is lasting, but my client has a lot of regrets and remorse over the fact that she sold herself out for far less than she might have been entitled to if she had not been so desperate to end the marriage. Don’t rush. A divorce is one of the most critical events in your life, and while it is important get it over with, hurrying can be very costly. You do not want to have regrets once the divorce is final.

5. I’ve been promised that I will see the children more and pay less. I just have to sign the papers. Be careful. There is often a hidden motive behind a promise, and if someone told you this — especially if this is a hotly litigated case — there is often a hidden agenda. Remember, there is no Easter Bunny, and someone who is pushing you to sign the papers too quickly has something up his or her sleeve. This is where it is important to make sure that your attorney fully understands all the aspects of the case and is there to protect you and advocate for you where necessary.

6. Showing your biases and prejudices. I’ve had clients who will come to me and start using racial, religious or ethnic slurs. I think it’s wrong. I think it also shows something about the person that is highly unattractive.

7. Never say never. Never say that you will not pay any spousal support. Never say that your spouse can have everything. Never say that your spouse is going to get nothing. Never say that you are going to leave your children. Every case has an upside and downside, but saying “never” is the worst thing that you can do. There are exceptions to every rule, especially in a divorce situation. Keep an open mind. Remember that your attorney is there to counsel and advise you and help you go forward as you try to rebuild your life.

What are some other thoughts that you have as to things you should never say to your attorney? Share them with us.

Marriages rarely die overnight. Almost always, the destruction of a marriage happens little by little, over time. Ideally, if trouble arises in your marriage, you and your spouse should be able to respond to problems before they cause serious damage to your relationship. You can then either work things out and remain married, or make a mutual decision to separate or get divorced. However, if your marriage is in serious trouble, any discussion, cooperation, or compromise may be impossible, and you may have no option but to end it yourself, possibly against your spouse’s wishes.

When you are having marriage problems, whether they are big or small, the sooner you face facts and decide what to do about them the better. Burying your head in the sand when it comes to marital woes won’t make your problems go away. In fact, they’ll probably just get worse. Furthermore, if divorce is in the cards, the sooner you acknowledge it, the more emotionally and financially prepared you’ll be for what is to come.

You may find yourself replaying old arguments, resurrecting old hurts, crying a lot, or becoming consumed with anger when your marriage is in trouble. Those responses can quickly turn small problems into big ones and cause you to lose all perspective when it comes to your spouse and your marriage. Furthermore, when you let your emotions get out of control, it becomes difficult if not impossible for you to identify and realistically assess all the options you have for dealing with your troubles.

To help bring some objectivity and common sense to your situation so that you can gain a true appreciation of just how bad (or not so bad) things really are, consider some of the more common signs of a marriage in crisis, such as infidelity and contempt.
Do you have cause for concern?

When your marriage is going through tough times, you may find yourself wondering if it’s an instance of the “for better or for worse” your marriage vows alluded to, or if your relationship is truly on the rocks.

Although no test exists that can tell you if your problems are typical reactions to the stress and strain most marriages experience at one time or another, or if they point to more-serious issues, troubled marriages do tend to exhibit many of the same characteristics.

How many of the following statements apply to your marriage?

In your mind, your spouse just can’t do anything right anymore.

You fight constantly.

You’ve lost the ability or the willingness to resolve your marital problems.

Resentment and contempt have replaced patience and love.

You’ve turned from lovers into roommates.

One or both of you is having an affair.

You go out of your way to avoid being together and, when you are together, you have nothing to talk about.

Your children are reacting to the stress in your marriage by fighting more, having difficulty in school, getting into trouble with the police, abusing drugs or alcohol, or becoming sexually promiscuous.

You have begun having thoughts about divorce.

Don’t panic if you find that your marriage exhibits some of these characteristics — you are not necessarily headed for divorce court. However, you do have cause for concern and it’s time for you and your spouse, first separately and then together, to assess your options and decide what to do next.