EQUITABLE DISTRIBUTION

EQUITABLE

DISTRIBUTION

2023 FAMILY LAW REVIEW COURSE

NATALIE S. LEMOS

Leinoff & Lemos, P.A.

[email protected]

BIOGRAPHY

NATALIE S. LEMOS

Natalie Lemos practices exclusively in the area of Marital and Family Law with her

partners, Andrew Leinoff, Paul Leinoff and Max Leinoff at Leinoff & Lemos, P.A.

in South Miami, Florida. Ms. Lemos became board certified in Marital and Family

Law in 2002. Her certification has been renewed in 2007, 2012 and 2017. She is a

member of the American Academy of Matrimonial Lawyers and the International

Academy of Family Lawyers. She is a past President of the Florida Chapter of the

AAML.

She was selected as 2022 Top 50 Lawyers in America list. She has been named one

of the Best Lawyers in America since 2006 as well as Super Lawyers, South

Florida's Top Lawyers and Florida Trend's Legal Elite. Ms. Lemos co-authored an

article for the Family Advocate (ABA Section of Family Law) “The Perils of a

Prenup: First Do No Harm to Your Client or Yourself”, Winter 2011. In 2021 she

was named “Lawyer of the Year” for Best Family Law Lawyers by Best Lawyers.

In 1989, she graduated from the University of Pennsylvania Law School and began

her practice in New York. In 1990, she moved to Miami, Florida where she began

practicing in the area of Marital and Family Law. For over thirty years, her practice

has been exclusively in the area of Marital and Family Law. She handles complex

equitable distribution cases involving business valuation issues. She has tried all

forms of family law cases including valuation disputes, relocation cases, timesharing

issues, and support issues. Ms. Lemos has drafted numerous pre-nuptial and post-

nuptial agreements.

Ms. Lemos is a member of the New York and Florida Bars (1990); she is an admitted

member of the U.S. District Courts for the Southern and Middle Districts of Florida,

the U.S. Court of Appeals, 11th Circuit and the U.S. Supreme Court. Ms. Lemos

became an AAML Certified Mediator in 2016.

Ms. Lemos is a frequent lecturer for the Family Law Section of the Florida Bar, the

Florida Chapter of the American Academy of Matrimonial Lawyers and presented

for the FICPA and the ABA.

EQUITABLE DISTRIBUTION

TABLE OF CONTENTS

A. INTRODUCTION/OVERVIEW………………………………….. 1

B. MARITAL ASSETS/LIABILITIES ………………………………. 1-6

C. NON-MARITAL ASSETS/LIABILITIES…………………………. 6-10

D. IDENTIFICATION AND CLASSIFICATION…..….………………11-12

E. DATE OF VALUATION…………………………………………… 13-16

F. COMMINGLING…………………………………………………… 16-21

G. ENHANCEMENT/APPRECIATION…………………………….... 21-27

H. DISTRIBUTION……………………………………………………. 27-33

I DISSIPATION/DEPLETION…………………………………….... 33-39

J. INTERSPOUSAL GIFTS ………………………………………….. 39

K. VESTED/NON-VESTED BENEFITS, PENSIONS, QUALIFIED

PLANS, RETIREMENT ………………………………………..…. 39-49

L. METHOD AND MANNER OF

PAYMENT…………………………………………………………. 50

M. FACTUAL FINDINGS ……………………………….…………..... 50-53

N. ORAL FINDINGS CONSISTENT WITH FINAL JUDGMENT….. 53

O. LUMP SUM EQUITABLE DISTRIBUTION/EQUALIZER……… 53-54

P. ENFORCEMENT/MODIFICATION………………………………. 54-58

Q. MARITAL RESIDENCE…………………………………………… 5

-60

R. PARTITION………………………………………………………… 60-62

S. CORPORATIONS/THIRD PARTIES……………………………… 62-67

T. VALUATIONS…………………………………………………....... 67-71

U. INTERIM PARTIAL EQUITABLE DISTRIBUTION…………….. 71

V. TAX CONSIDERATIONS………………………………………… 72

W. PETS………………………………………………………………. 72-73

X. MISCELLANEOUS………………………………………………. 73-75

A. INTRODUCTION/OVERVIEW

Pursuant to Fla. Stat. § 61.075(1), in a proceeding for dissolution of marriage, in addition to

all other remedies available to a court to do equity between the parties, or in a proceeding for

disposition of assets following a dissolution of marriage by a court which lacked jurisdiction over

the absent spouse or lacked jurisdiction to dispose of the assets, the court shall set apart to each

spouse that spouse's non-marital assets and liabilities, and in distributing the marital assets and

liabilities between the parties, the court must begin with the premise that the distribution should be

equal, unless there is a justification for an unequal distribution based on all relevant factors,

including the factors as specified in Fla. Stat. § 61.075(1)(a)-(j).

A determination of how marital assets and liabilities are divided will usually impact most

other aspects of a divorce case.

• Income producing properties may impact alimony and child support

• Interest income on investments, real or imputed, may impact alimony and child

support

• Allocation of assets and liabilities may impact the needs of a support seeking spouse

• May impact allocation on payment of attorneys’ fees and costs

• Consideration of non-marital assets may also impact support issues and attorneys’

fees issues.

Every asset and liability must be identified, classified, and valued. This includes marital

and non-marital assets and liabilities. Then, each marital asset and liability must be distributed

between the parties. The premise is for an equal division of marital assets and liabilities (also

referred to as “the marital estate”). If the Court elects to depart from an equal division of the marital

estate, there must be findings of fact in support of that determination.

B. MARITAL ASSETS AND LIABILITIES

1. Definition of Marital Assets and Liabilities:

Pursuant to Fla. Stat. § 61.075(6)(a)1.-3., "marital assets and liabilities" include:

a. Assets acquired and liabilities incurred during the marriage, individually by either spouse

or jointly by them;

b. The enhancement in value and appreciation of non-marital assets resulting either from

the efforts of either party during the marriage or from the contribution to or expenditure

thereon of marital funds or other forms of marital assets, or both;

c. The paydown of principal on a note and mortgage secured by a nonmarital real property

and a portion of the passive appreciation in the property if the note and mortgage are paid

with marital funds.

d. Interspousal gifts during the marriage;

e. All vested and non-vested benefits, rights, and funds accrued during the marriage in

retirement, pension, profit-sharing, annuity, deferred compensation, and insurance plans and

programs;

f. All real property held as tenants by the entireties; and

g All personal property titled jointly by the parties as tenants by the entireties (even if

acquired prior to the marriage).

2. Burden of Proof:

Pursuant to Fla. Stat. § 61.075(8), all assets acquired, and liabilities incurred by either

spouse subsequent to the date of the marriage and not specifically established as non-marital assets

or liabilities are presumed to be marital assets and liabilities. Such presumption is overcome by a

showing that the assets and liabilities are non-marital assets and liabilities. Where assets/liabilities

acquired/incurred during the marriage, the burden shifts to the party trying to establish it as non-

marital. Once an asset/liability is established as pre-marital, the burden shifts to the opposing party

to establish the asset as marital.

When the marital character of an asset is in question, the burden of proving whether an asset

is non-marital is on the party claiming it to be so. Alpha v. Alpha, 885 So.2d 1023 (Fla. 5th DCA

2004). In Hamilton v. Hamilton, 328 So.3d 1093 (Fla. 1

DCA 2021), the trial court applied the

wrong statutory presumption. Husband had credit card debt in his name incurred during the

marriage. Some of the debt was for household expenses and some for his accounting practice. The

trial court determined the Husband failed to meet the burden of proof to show which debt was for

household expenses and found all of the debt to be non-marital corporate debt. Appellate court

reversed. Presumption that debt was marital and burden of proof on party seeking to classify the

debt as non-marital. Burden of proof was on Wife if she was seeking to have some of the debt

deemed non-marital.

Assets acquired before marriage are not marital assets and remain the property of the owner

spouse in the absence of evidence of a gift or conveyance of the assets to the owner’s spouse. Moss

v. Moss, 829 So.2d 302 (Fla. 5th DCA 2002). Additionally, property acquired during the marriage

through the exchange of non-marital assets is non-marital. Beaty v. Gribble, 652 So.2d 1156 (Fla.

2d DCA 1995). Where a party asserts a marital claim to appreciation in a non-marital asset, they

have the initial burden of proof to show marital efforts or funds used for improvement and the

burden then shifts to the owner spouse to show some enhancement is exempt. Yitzhari v. Yitzhari,

906 So.2d 1250 (Fla. 3d DCA 2005).

In Erdman v. Erdman, 301 So.3d 316 (Fla. 5th DCA 2019), the Husband claimed that the

source of the deposit to acquire the marital residence which was purchased during the marriage,

was from a non-marital source but other than his vague testimony, no evidence was produced. The

residence was titled in joint names. The trial court erred in awarding the house to the husband and

providing him with a credit for the claimed non-marital contribution. The Court incorrectly ignored

the gift presumption which was not overcome based solely on the husband’s testimony. The source

of the initial contribution was irrelevant.

3. Standard of Review:

The standard of review for the classification of an asset/liability is reviewed de novo. See

e.g., Ramos v. Ramos, 230 So.3d 893, 895 (Fla. 4

DCA 2017). However, for valuation purposes,

standard of review is abuse of discretion. McGowan v.McGowan, 2022 WL 3441442; 1D21-966

(Fla. 1

DCA 2022).

4. Identification of Prospective /Potential Assets:

4.1. Future salary not a marital asset but accrued benefits may be

In Barner v. Barner, 716 So.2d 795 (Fla. 4th DCA 1998), the district court held that the

husband’s future earning ability was not an “asset” for purposes of equitable distribution. The

husband’s future salary could not be characterized as accruing during the marriage; therefore, the

wife had no right to that portion in equitable distribution. Compare to Dye v. Dye, 17 So.3d 34

(Fla. 2d DCA 2009), the husband, a county employee, accrued 1060 hours of sick leave and 928.7

hours of unused vacation time at the time of divorce, which upon termination of employment, the

husband would be entitled to compensation for his unused hours. The district court held that since

the husband’s employment contract provided for the method of valuing his unused hours, the value

of the unused sick and vacation days was subject to equitable distribution. However, if the unused

sick and vacation day valuation was speculative in nature, the court would not have required

equitable distribution.

4.2. Future book may be subject to equitable distribution

In the decision of Valentine v. Valentine, 137 So.3d 566 (Fla. 2d DCA 2014), the Third

District held that the award of fifty percent of any proceeds from a potential book the former wife

may write about the death of her sister must be read specifically as a reservation of jurisdiction for

a future court to determine whether any portion of this as-yet-unwritten publication is marital

property.

During the marriage, the former wife's sister died under tragic circumstances and the former

wife kept a detailed journal regarding the death and her feelings. The former husband suggested

that this journal, or a book based thereon, might be published by the former wife and that a portion

of the royalties should be awarded to him in the equitable distribution plan as a marital asset. In a

protective order, the trial court placed the former wife on notice that should she ever publish the

journal or book, the former husband must be notified.

In the equitable distribution section of the final judgment, the trial court required that the

former wife convey to the former husband “[f]ifty percent of marital future proceeds from book

written by Wife.” But the final judgment also stated that “[t]he Family Law Court shall reserve

[jurisdiction] as to all current and future issues regarding the equitable distribution of the any [sic]

proceeds, royalties[,] or financial gain generated from the journal/book that was written during the

course of this marriage, or related matters” and that “[t]he court reserves jurisdiction as to the

equitable distribution matters regarding the Wife's book.” Thus, if the former wife publishes a book

based on the journal she kept during the marriage or publishes the journal itself, the court retained

jurisdiction to review the issue post-publication and to then determine what portion, if any, of the

royalties might qualify as marital assets.

4.3. Contingent Liability may be subject to equitable distribution

In Perkovich v. Humphrey-Perkovich, 2 So.3d 348 (Fla. 2d DCA 2009), the physician wife,

based on her treatment of patients during the marriage, may be prone to future malpractice lawsuits.

The trial court ordered the parties to divide any future claims that are not covered by malpractice

insurance. The husband appealed, contending he could not be held liable for potential future claims.

The appellate court reversed, holding that “no liability incurred; only the possibility of a liability is

present.” Pursuant to the concurring opinion, if a married couple has enjoyed the income from a

spouse’s profession, there may be times when a known contingent, but unliquidated, professional

liability should be treated as a marital liability, just as the related income was treated as marital

income. However, the contingent liability must not be speculative.

4.4. Interspousal gift following prenuptial agreement may create marital property

In Hooker v. Hooker, 220 So.3d 397 (Fla. 2017), the parties executed a prenuptial agreement

to keep their substantial pre-marital assets separate, together with any and all identifiable

appreciation, substitution, improvements, additions and/or replacements of or to any of the property

described. After the parties married, they heard about vacant land available, for which interested

persons needed to purchase a lottery ticket for the chance to purchase one of the lots. The Wife’s

father funded the purchase of the lottery ticket. The parties obtained the option to purchase a lot,

and the Husband did so with non-marital funds. Only the Husband signed the original purchase

money mortgage, but both parties signed a later mortgage document for a construction loan. The

property was developed into a working horse farm and marital home. The Wife furnished the home

and helped clean and care for the stables and horses. Later, the Wife expressed a desire to have a

summer home, so the Husband purchased a vacant lot in Lake George, New York with his non-

marital assets. He sent the Wife a card for their tenth wedding anniversary with a picture of the lot.

The mortgage on the property was in only the Husband’s name. The Wife was deeply involved in

the designing and building of the home, and she believed that she owned the home with the

Husband.

Even though the Wife actively contributed to the appreciation of the property (referencing

the marital home), the parties’ prenuptial agreement provided that any appreciation remained non-

marital. The Wife’s name was kept off the title and the original mortgage, and when the Husband

had the opportunity to make any donative intent clear through the creation of the corporation, he

chose to keep the corporation solely in his name and excluded the Wife’s name from the final sale

of the property. With the Lake George property, the facts evidence sufficient donative intent

through the Wife’s testimony about the Husband sending her a card for their tenth wedding

anniversary with a picture of the property. The Wife also purchased some furnishings and

incidentals with her separate funds. Delivery was made at the time the Wife obtained keys to the

property. With regard to the Husband’s surrender of dominion and control of the property, the Wife

had unfettered access to the home and made decisions on care and maintenance of the property with

the ability to incur expenses on behalf of the Husband.

4.5. Even where value is undetermined, asset may still be marital

In Niekamp v. Niekamp, 173 So.3d 1106 (Fla. 2d DCA 2015), the Wife’s business, a music

studio, was classified as a non-marital asset by the trial court. The Wife conceded the error on

appeal, but asserted it is harmless because: 1) there was no evidence of value and 2) the business

is based entirely on her goodwill and personal services. However, as noted by the Husband, the

business also has other assets, including tangible assets such as funds in bank accounts and two

books it sells, and perhaps some enterprise goodwill. Further, the failure to present evidence as to

value could have very well been to the Wife’s detriment. When an asset is acquired during the

marriage, it is presumed to be marital unless specifically established as non-marital. If the trial

court had properly classified the business as marital but lacked evidence of its value or of how much

of that value might have been attributable to the Wife’s personal goodwill, the court could have

granted each party a one-half interest.

4.6. Bonus checks may be considered marital assets

The Husband challenged the valuation and inclusion of certain assets in the marital estate,

namely the inclusion of two bonus checks of $17,000.00 and $29,000.00, which he received from

his work. He claims that those funds were depleted by the time of trial because he used it to pay

the mortgage, child support, alimony, and so on. The Wife, however, was able to show that not

only did the Husband not list the amounts on his amended financial affidavits, he also stopped

making any mortgage payments on the residence at least a year before receiving those checks and

stopped making child support and alimony payments thereafter. Additionally, at the time he

received those checks, he was earning $143,989.88 in salary, from which he could have paid his

financial obligations to his family. The court had sufficient evidence from which to conclude that

the check amounts should be included in the marital estate. Byers v. Byers, 149 So.3d 161 (Fla. 1st

DCA 2014).

4.7. Annual Leave is a Marital Asset

In Rea-Manna v. Manna, 336 So.3d 804 (Fla. 1

DCA 2022), Husband’s annual

leave was determined to be a marital asset but only to the maximinum allowed eventhough hours

accrued exceeded maximum allowed to be compensated.

5. Identification of Prospective/Potential Liabilities:

5.1. Negative Equity is a Marital Liability

Where the Court determines a property has negative equity, the negative equity is a marital

liability subject to equitable distribution. Lostaglio v. Lostaglio, 199 So.3d 560 (Fla. 5

DCA 2016).

5.2. Joint Tax Liability

Trial Court erred by failing to include a joint tax liability in its equitable distribution

determination. The trial court left it to the IRS to determine the treatment of the liability. Stuft v.

Stuft, 238 So.3d 419 (Fla. 5

DCA 2018).

5.3. Adult Child’s Student Loan

Trial Court reversed where it failed to include their daughter’s student loan as a marital

liability when incurred prior to the date of filing. Conlin v. Conlin, 212 So.3d 487 (Fla. 2

DCA

2017).

5.4. Cost to transfer property

Trial court failed to include the cost to transfer property awarded to a spouse even though

evidence presented as to the cost to transfer. Gupta v. Gupta, 327 So.3d 950 (Fla. 5

DCA 2021).

C. NON-MARITAL ASSETS AND LIABILITIES

1. Gifts from a Third Party During the Marriage are Non-Marital:

In Madson v. Madson, 128 So.3d 207 (Fla. 1st DCA 2013), appellate court reversed where

the trial court erred by classifying former wife’s Coca–Cola shares as marital assets. At trial, the

former wife's son testified that he had purchased Coca–Cola shares for the former wife as a gift.

The former wife testified that the Coca–Cola shares were a gift from her son, and she neither

purchased additional shares nor reinvested the original ones. A trial court “shall set apart to each

spouse that spouse's non-marital assets,” which include “[a]ssets acquired separately by either party

by noninterspousal gift.” § 61.075(1), (6)(b), Fla. Stat. (2010); see also McKee v. Mick, 120 So.3d

162, 163–64 (Fla. 1st DCA 2013) (finding that the trial court erred by classifying a vehicle as marital

property and distributing it to the wife where the husband testified that the car used to belong to his

mother, who transferred title to him); Tradler v. Tradler, 100 So.3d 735, 743 (Fla. 2d DCA 2012)

(reversing and remanding the final judgment for the trial court to reclassify certain checks as non-

marital assets where the husband received them as gifts from his mother, kept them in his name

only, and never commingled the funds in a joint account); Capozza v. Capozza, 917 So.2d 365, 368

(Fla. 5th DCA 2005) (remanding “for a revised scheme of distribution deleting from the schedule

of marital assets the twenty shares ... which is to be considered the separate asset of [the husband],”

who had received them as a gift from his father).

2. Debt Accrued During the Marriage for Non-Marital Expenses are Non-Marital:

To the extent that a party incurred debts to cover non-marital expenses, the debt should not

be classified as marital debt for the purpose of equitable distribution. Fortune v. Fortune, 61 So.3d

441, 445 (Fla. 2d DCA 2011) (reversing because the trial court classified the entire amount of a

loan as a marital debt without making a finding as to when the debt was incurred or what the debt

was used to pay); Walker v. Walker, 827 So.2d 363, 364–65 (Fla. 2d DCA 2002) (reversing because

the trial court classified the entire amount of a debt as a marital debt without determining which

portion of the debt was used to pay the husband's litigation and living expenses versus paying his

personal income tax and property taxes).

In Krift v. Obenour, 152 So.3d 645 (Fla. 4th DCA 2014), the trial court determined that the

credit card debt in the former husband's name was non-marital. His testimony concerning the nature

and purpose of his credit card expenses sufficiently overcame the presumption that the liability was

marital. The Fourth District found no error in the trial court's classification of the former husband's

credit card debt as non-marital and affirmed since all assets acquired and liabilities incurred by

either spouse subsequent to the date of the marriage and not specifically established as non-marital

assets or liabilities are presumed to be marital assets and liabilities.” § 61.075(8), Fla. Stat. (2012).

Distribution of the marital assets and liabilities must be supported by factual findings in the

judgment based on competent substantial evidence. The appellate courts review such findings for

an abuse of discretion. However, they review de novo the trial court’s legal conclusion that an asset

or liability is “marital” or “non-marital.” However, to the extent that a party incurred debts to cover

non-marital expenses, the debt should not be classified as marital debt for the purpose of equitable

distribution. Here, the Husband’s own testimony concerning the nature and purpose of his credit

card expenses sufficiently overcame the presumption that the liability was marital.

3. Asset Acquired After the Date of Filing is Non-Marital:

In Smith v. Smith, 169 So.3d 220 (Fla. 2d DCA 2015), the trial court included as marital

assets in the equitable distribution scheme both a Ford truck, which was owned by the Husband at

the time the petition was filed but sold during the pendency of the divorce, and a Scion, which was

purchased by the Husband after the date of filing, but prior to the final judgment. The Husband

sold the truck for $3,000.00 and then purchased the Scion for $3,000.00 as a replacement. Since

the parties did not enter into a marital settlement agreement, the applicable date for determining

whether assets and liabilities are classified as marital or non-marital is the date of the filing of the

petition. Assets and liabilities not in existence on that date should not be classified as marital. The

trial court needs to strike the Scion from the equitable distribution scheme and reduce the equalizing

payment owed to the Wife by $1,500.00.

Post-filing earnings which resulted in a tax refund was non-marital. Padmore v. Padmore,

335 So.3d 239 (Fla. 2

DCA 2022).

4. Non-Marital Property Cannot be Awarded to the Non-Owner Spouse:

Once a determination of marital and non-marital assets is made, the court must set aside the

non-marital assets. In Rodriguez v. Rodriguez, 994 So.2d 1157 (Fla. 3d DCA 2008), the trial court

erred in awarding to the wife the husband’s non-marital property in the equitable distribution

scheme. The trial court was concerned that the husband’s alleged lack of financial responsibility

and career growth may encumber the family residence in the future and awarded the wife the non-

marital home. The district court reversed, holding that the consideration of the husband’s non-

marital assets in making a distribution of marital assets was an abuse of discretion.

In Wilson v. Wilson, 992 So.2d 395 (Fla. 1st DCA 2008), the district court determined that

the trial court erred in including a motel as a marital asset in an equitable distribution scheme. A

motel was gifted solely to the wife from her grandmother, which the wife managed during the

marriage. The trial court found that the wife’s non-marital interest in the motel became marital due

to the appreciation caused by the wife. However, the trial court erred by including the entire non-

marital asset and not just the appreciation. The district court held that the wife’s non-marital interest

did not become a marital asset and the trial court erred in not setting that portion aside when

awarding equitable distribution.

Once an asset has been determined to be non-marital, that asset may not be awarded to the

non-owner spouse as equitable distribution unless there has been agreement to the contrary. The

agreement may provide for such as part of a settlement agreement. Abernethy v. Abernethy, 670

So.2d 1027 (Fla. 5th DCA 1996).

5. If Court Determined Asset to be Non-Marital Must Make Finding:

In Goldman v. Goldman, 182 So.3d 722 (Fla. 5

DCA 2015), Court awarded two bank

accounts to the Wife but failed to identify if marital or non-marital. If marital, then the court ordered

an unequal distribution without making the required findings. If non-marital, Court must identify

those assets as such.

6. Premarital Component of Wife’s TSP Supported by Wife’s Testimony:

Although there were no documents presented to support Wife’s claim as to the premarital

balance of her TSP account, she testified based on her personal knowledge, which the Court found

to be substantial competent evidence. Premarital value and passive appreciation may be deemed

non-marital. Neiditch v. Neiditch, 187 So.3d 374(Fla 5

DCA 2016).

7. Wife’s Credit Card Debt Incurred Prior to Marriage is Non-Marital:

Wife claimed credit card debt was incurred during the marriage. However, credit report in

evidence, established that the initial debt of $19,000 was incurred prior to the marriage and the

balance at the date of filing was largely comprised of interest and penalties. Debt found to be Wife’s

non-marital liability. Cilenti v. Cilenti, 192 So.3d 673 (Fla. 2d DCA 2016).

8. Mortgage Obtained During the Marriage but Recorded on Non-Marital Property was

Non-Marital:

Mortgage obtained during the marriage and signed by both parties. Funds used for

improvements to the husband’s non-marital property, the mortgage liability was non-marital. The

wife signed the mortgage but not the note, by signing the mortgage (which is often required by the

bank), she did not assume the liability. Frederick v. Frederick, 257 So.3d 1105 (Fla. 2

DCA 2018).

9. Engagement Rings and Wedding Rings Generally Non-Marital:

Generally, engagement rings and wedding rings are non-marital gifts of the receiving

spouse. Where those non-marital items of jewelry are converted into another piece of jewelry during

the marriage, the additional jewelry cost will be marital, and the initial engagement ring and

wedding rings will remain non-marital. Moody v. Newton, 264 So.3d 292 (Fla. 5

DCA 2019).

10. Non-Pecuniary Compensation for a Personal Injury Loss May be Non-Marital:

Trial court is to apply “analytical approach” set forth in Weisfeld v. Weisfeld, 545 So.2d

1341 (Fla.1989) to determine the nature of the award. Court intended to award the non-pecuniary

compensatory damages to the husband as part of his non-economic award which should have been

his non-marital award.

If compensation for personal injury received during the marriage, the presumption of a

marital assets shifts to the injured party to prove that the award was for non-marital compensation.

Failure to offer proof may result in a finding that the award was marital. Roth v. Roth, 312 So.3d

1021 (Fla. 2d DCA 2021).

11. Entity Formed After Marriage which Acquired Property Solely through Loan was Non-

Marital:

Husband formed an entity after the marriage. The entity acquired property through a loan

provided by Husband’s father. The entity (which was named as a third party defendant in the

divorce) defaulted on the loan and the property was turned over. Court found the property to be

non-marital. Turnover occurred before the divorce was filed. Apesteguy v. Keglevich, 319 So.3d

150 (Fla. 3

DCA 2021).

12. Tickets to Future Sporting Events are Non-Marital:

Future season football tickets and parking passes are not a marital asset subject to equitable

distribution. Assets acquired after the date of filing are non-marital. Tanner v. Tanner, 323 So.3d

808 (Fla. 1

DCA 2021).

13. Debt incurred via forgery is Non-Marital:

Fla. Stat. §61.075 (6)(b)(5) states that in the event of a forgery the liability shall be deemed

non-marital.

In Dampier v. Dampier, 298 So. 3d 695 (Fla. 1st DCA 2020), the trial court improperly

refused to assign certain debts and obligations to the former wife which had been incurred as a

result of forgery by the former wife. In the final judgment, the trial court rejected the former wife’s

explanation concerning the disputed liabilities and determined they were incurred as a result of

fraud. Yet the trial judge considered these obligations as marital obligations and equitably

distributed them. The only reason given was that the court could not determine how the illegally

obtained funds were spent. The trial court erred in determining that it mattered whether the funds

had been misused or misspent. Section 61.075(6)(b)5. does not place the burden on the wronged

spouse to prove how the funds were used but makes it mandatory that the party that committed the

forgery be assigned the debt.

14. Military Disability is Non-Marital Asset:

Wife was to receive a portion of Husband’s retirement benefit when received. Husband

became disabled before eligible to receive retirement benefit. Huband’s disability was erroneously

deemed distributable by trial court which was reversed on appeal. Martin v. Martin, 2022 WL

3441473, 1D21-2647 (Fla. 1

DCA 2022).

15. Pre-marital Personal Property not Marital:

In Twigg v. Twigg, 2022 WL 1434779, 2D21-543 (Fla. 2

DCA 2022) trial court

improperly classified the Husband’s premarital car as marital. Reversed by appellate court. Car

was located at site owned by Wife’s brother to which Husband had no access. Value of car assessed

against Wife.

16. Court erred in classifying the Husband’s premarital bank accounts and post-marital

accounts funded with premarital monies as marital. Street v. Street, 303 So.3d 1253 (Fla. 2

DCA

2020).

D. IDENTIFICATION/CLASSIFICATION

Pursuant to Fla. Stat. § 61.075(7), the cut-off date for determining assets and liabilities to

be identified or classified as marital assets and liabilities is the earliest of the date the parties enter

into a valid separation agreement, such other date as may be expressly established by such

agreement, or the date of the filing of a petition for dissolution of marriage.

1. Assets and Liabilities Acquired/Incurred After Date of Filing are Generally Non-Marital:

Assets acquired by one spouse after filing a petition for dissolution of marriage are

ordinarily deemed to be non-marital. Beers v. Beers, 724 So.2d 109 (Fla. 5th DCA 1998).

2. Student Loan Debt as Marital Liability:

Liabilities acquired during the marriage are also generally considered marital liabilities. In

Rogers v. Rogers¸ 12 So.3d 288 (Fla. 2d DCA 2009), the trial court erred in holding that the wife

was responsible for her student loan debt when the debt was incurred during the marriage. The

husband argued that although the wife was in school during the marriage to obtain her paralegal

degree, he would not receive the benefit of her education. The district court held that this is not a

factor to be considered when allocating marital debt. Absent some other justification for an unequal

distribution, the student loan debt was a marital liability, incurred during the marriage, to be shared

equally amongst the parties. See also, Gudur v. Gudur, 277 So.3d 687 (Fla. 2

DCA 2019) (Student

loan debt incurred during the marriage is a marital liability even if the non-student spouse will not

benefit from the education).

3. College Expenses Funded by Debt During Marriage may be Considered a Marital

Liability:

In Wagner v. Wagner, 136 So.3d 718 (Fla. 2d DCA 2014), the husband appealed the

distribution of marital debt. Specifically, the husband contended that the trial court erred in

determining that a credit card debt for an adult child's college expenses incurred just before the wife

filed her petition for dissolution was not a marital debt and was the husband's responsibility. The

Second District disagreed.

The wife argued that any obligation a parent has to fund the college education of an adult

child is moral, not legal, and that the court cannot require a parent to pay those expenses unless the

parties have contracted for them in a marital settlement agreement. See Madson v. Madson, 636

So.2d 759, 761 (Fla. 2d DCA,1994); Riera v. Riera, 86 So.3d 1163, 1167–68 (Fla. 3d DCA 2012).

That is true for college expenses incurred after the petition for dissolution was filed and in the

future. However, the expenses were incurred during the marriage, albeit a few days before the

petition was filed.

The trial court may consider a party's intentional waste or depletion of marital assets to do

equity and justice between the parties. Santiago v. Santiago, 51 So.3d 637, 638 (Fla. 2d DCA 2011);

see also, David v. David, 58 So.3d 336, 338 (Fla. 5th DCA 2011) (recognizing that intentional waste

of marital assets can justify an unequal distribution). The trial court did not make a finding of waste

of marital assets to justify an unequal distribution. See, Rosenfeld v. Rosenfeld, 597 So.2d 835, 838

(Fla. 3d DCA 1992) (reversing determination that the husband wasted marital assets by assisting in

the support of his parents). In fact, the trial court “hope[d] that both parenting partners would take

part in funding the Davidson College expenses outside of Court.” Although the wife did not favor

paying the college expenses, based on all of the circumstances, the Second District determined that

the Husband's actions did not constitute intentional waste. Wagner v. Wagner, 136 So.3d 718 (Fla.

2d DCA 2014).

4. Physical Separation May Not Establish an Earlier Date for the Designation of Marital

versus Non-Marital Assets and Liabilities:

In Broadway v. Broadway, 132 So.3d 953 (Fla. 1st DCA 2014), the record demonstrated

that the parties separated in early September 2010, and that the former husband purchased a 25–

foot pull-behind camper some time during the week the separation began. The former wife filed her

petition for dissolution of marriage on July 26, 2011. In the equitable distribution portion of the

final judgment, the trial court ruled that the camper was acquired post-separation and was

designated as a non-marital asset of which the former husband retained sole ownership. The First

District determined that the trial court erred.

The cut-off date for determining assets and liabilities to be identified or classified as marital

assets and liabilities is the earliest of the date the parties enter into a valid separation agreement,

such other date as may be expressly established by such agreement, or the date of the filing of a

petition for dissolution of marriage. § 61.075(7), Fla. Stat. (2011). A trial court's allocation of an

asset as marital or non-marital for purposes of equitable distribution is reviewed de novo. Puskar v.

Puskar, 29 So.3d 1201, 1203 (Fla. 1st DCA 2010).

In Morgan v. Morgan, 327 So.3d 898 (Fla. 2

DCA 2021), trial court improperly used date

when parties “effectively separated” to classify assets as marital or non-marital. This was error.

Trial court should have used date of filing per statute.

5. Credit card debt incurred during the marriage and discharged in bankruptcy is marital:

In Diaz-Silveira v. Diaz-Silveira, 305 So. 3d 646 (Fla. 3d DCA 2020), the trial court

awarded $14,200 in credit card debt to the husband. This was error. The debt had been discharged

by the credit card company. Thus, there was no debt to allocate as a part of equitable distribution.

The husband argued that he may still have a tax liability if the credit card company chooses to report

the write-off to the IRS. However, the husband's forensic accountant testified that if the debt was

discharged, it should not be included in the equitable distribution. The accountant further testified

that the husband had yet to receive the 1099-C form and had not received it in the previous two

years. At the close of trial, the husband still had not received the 1099-C form, and the record did

not contain an estimate of the amount of tax that may be due if/when the form is issued and received.

“The trial court correctly noted that it had to decide the case on the basis of the evidence before it

at that time and not what would or might happen in the future.” Hollinger v. Hollinger, 684 So. 2d

286, 288 (Fla. 3d DCA 1996). “A party who wants a trial court to consider the consequences of his

receiving a tax burdened asset must present evidence of the tax consequences as to all assets so that

the trial court may order a distribution that is equitable.” Id. Therefore, the trial court abused its

discretion in placing the credit card debt in the husband’s column, thus depriving the wife of

$7,100.00 in equitable distribution.

E. DATE OF VALUATION

Florida Statute §61.075(7) provides that the date for determining value of assets and the

amount of liabilities identified or classified as marital is the date or dates as the judge determines is

just and equitable under the circumstances. Different assets may be valued as of different dates, as,

in the judge's discretion, the circumstances require.

1. Court’s Discretion as to Date of Valuation:

Choosing a valuation date of assets in dissolution actions is determined on a case by case

basis, depending upon the facts and circumstances. There was no presumption that one date should

be used as opposed to another. Perlmutter v. Perlmutter, 523 So.2d 594 (Fla. 4th DCA 1988). The

Fourth District held that the date of the dissolution trial, rather than the date of filing of the action,

was the appropriate date for valuation of the marital assets for equitable distribution purposes.

The trial court must make a finding as to the date of valuation of pension and there must be

evidence as to the value or the trial court will be reversed. Here, trial court selected a valuation date

approximately one year before the filing date without any explanation. Smith v. Smith, 226 So.3d

948 (Fla. 4

DCA 2017).

2. Date of Final Hearing:

In Tucker v. Tucker, 966 So.2d 25 (Fla. 2d DCA 2007), the trial court’s selection of the date

of the final dissolution hearing as the date for determining the value of marital assets was not an

abuse of discretion. The trial court selected that date since the parties had attempted reconciliation

in the years since the original petition for dissolution was filed, and the former husband had

purchased a townhouse and a vehicle subsequent to the filing of the petition.

In Massam v. Massam, 993 So.2d 1022 (Fla. 2d DCA 2008), the trial court’s equitable

distribution scheme was reversed since the court did not include the unpaid rent of the husband’s

business as a marital liability. The final judgment gave the valuation date of assets and liabilities

as the date of trial. The trial court did not include the unpaid rent as a liability since the debt did

not accrue until after the petition for divorce was filed. Since the final judgment did not list the

time of filing as the valuation date, the district court was forced to depend upon the trial date as the

date of valuation. Therefore, the debt that was accrued after the parties’ separation was subject to

equitable distribution.

Error to use date of filing to value bank accounts and other investment accounts since

changes were due to market forces. Trial court should have used current values or should have

made findings explaining its decision. Schroll v. Schroll, 227 So.3d 232 (Fla. 1

DCA 2017).

Trial court used the valuation date of the marital residence appraised at date of filing and

also credited the spouse occupant with one-half of the mortgage reduction. Court should have either

used date of filing to value and not provided a credit or used value closer to trial (which included

appreciation) as the increase in value resulted from passive appreciation. The trial court was

reversed for combining the two different valuation dates. Mattison v. Mattison, 266 So.3d 258 (Fla.

DCA 2019).

3. Date of Filing:

In Schmitz v. Schmitz, 950 So.2d 462 (Fla. 4th DCA 2007), the Court determined that the

date to be used for valuing marital assets and liabilities for the purpose of equitable distribution was

the date of the filing of the petition for dissolution, rather than the date of trial, since the parties did

not have a separation agreement or reach an agreement on any alternative date.

In Jordan v. Jordan, 127 So.3d 794 (Fla. 4th DCA 2013), the Fourth District found that

competent substantial evidence was lacking to support the trial court's valuation of certain marital

assets and liabilities in the equitable distribution schedule attached to the final judgment.

As to the Former Husband’s challenge to the trial court's decision to value the marital assets

and liabilities as of the date of filing the petition for dissolution, the Fourth District found his

arguments without merit. “The date for determining value of assets and the amount of liabilities

identified or classified as marital is the date or dates as the judge determines is just and equitable

under the circumstances.” § 61.075(7), Fla. Stat. (2012). The trial court did not abuse its discretion

in determining that the date of filing the petition for dissolution was an appropriate date to value

the assets.

In Clark, the court determined that one of the Husband’s investment accounts had a greater

balance at the beginning of the marriage than it did at the time of the filing of the petition for

dissolution of marriage. As there was no evidence that the account increased in value due to marital

funds, the Court properly found no legal basis to designate a portion of the account as marital. The

Court also did not err in using the petition filing date as the date for valuing the asset, since the date

for determining the value of assets classified as marital is the date the judge determines is just and

equitable. Here, however, it appears that the Court inadvertently misread the value on the account

statements, so the correct value needs to be ascertained with the equitable distribution scheme

revised accordingly. Clark v. Clark, 155 So.3d 1261 (Fla. 1st DCA 2015).

4. Post Filing Efforts:

In Parry v. Parry, 933 So.2d 9 (Fla. 2d DCA 2006), in determining which date to use, the

trial court valued stock on the dissolution petition filing date, rather than on the date of trial, since

the expert testified that the appreciation in value of the employer's stock was not passive but rather

due in part to the husband's work as a senior officer of the company.

Assets should not, ordinarily, be valued as of a post-dissolution date because the subsequent

change in the property's value due to non-marital labor or efforts cannot be distributed. Jahnke v.

Jahnke, 804 So.2d 513 (Fla. 3d DCA 2001).

In Catafulmo v. Catafulmo, 704 So.2d 1095 (Fla. 4th DCA 1997), the trial court properly

selected the date of the petition for dissolution, rather than the date of trial, as the valuation date for

equitable distribution, where the increase in the value of the husband's businesses resulted from his

individual efforts after the parties separated and after the filing of the petition, compared to merely

passive appreciation.

5. Date of Filing Separation Action in Out-of-State Action was the Valuation Date Selected

by the Trial Court:

A party filed suit for a separation in 1995 in Ohio and the parties thereafter lived separately

and had no communication and contact. This resulted in a divorce but one in which equitable

distribution was not determined. When Florida addressed the equitable distribution in 2009, the

trial court used the Ohio date of filing of the separation action for purposes of valuing the equitable

distribution. Kvinta v. Kvinta, 277 So.3d 1070 (Fla. 5

DCA 2019).

6. Exceptions:

6.1. Appellate court considered separation in determining liability was non-marital

In Cardella-Navarro v. Navarro, 992 So.2d 856 (Fla. 3d DCA 2008), where the trial court

assigned a portion of the business liabilities incurred by the husband’s business to the wife. The

wife appealed. The husband owned a yacht brokerage business as an S Corp and the husband was

the only shareholder. During the marriage, the company entered into an agreement for wholesale

financing with GE. The company went into default with GE for failure to pay $5,862,203.31 and

owed the state $211,478.82 for past-due sales taxes, interest and penalties. GE intervened and

became a party to the action, alleging they had in interest in the sale of the former marital home as

the property was collateral under the terms of the financing agreement. The trial court awarded

one-half of the business debt to the wife, approximately $4,694,000.00. The appellate court

reversed. The reasoning was that the husband controlled the company and most, not all, of the debt

arose after the parties separated. The trial court found that the husband mishandled corporate

finances and that it would be inequitable for one party to leave a short-term marriage with so much

debt. Also, the husband guaranteed the business loan and therefore there was no privity of contract

between the wife and creditor. In this case the trial court appears not to have considered the

liabilities having been incurred after the separation date while the appellate court did factor that in

in determining those liabilities to be non-marital.

6.2. Date of transfer (prior to filing date) was considered by the trial court

Three errors were made with regard to the trial court’s equitable distribution. First, the

distribution scheme should be revised to exclude an account in the amount of $23,660 from

inclusion as a marital asset. The Wife concedes the error. Second, the Husband, just weeks before

the Wife filed for divorce, transferred $100,000.00 to a Bulgarian bank. Upon converting the dollars

to Bulgarian leva, the account became worth approximately $91,015 in U.S. dollars. The funds

were not transferred for any nefarious reason, as the Husband did not know the Wife was going to

seek a divorce. The court ordered the Husband to pay the Wife $50,000.00 in U.S. dollars to

equitably divide the account. However, the Wife should bear her half of the decrease in value of

the account. The court was within its discretion in ordering the Husband to repay using U.S. dollars,

but it was error to value the asset as of the date it was transferred to Bulgaria and converted to leva.

The decrease in funds was an event that both parties bore at the time it occurred, which was before

the dissolution action began. In the absence of any evidence that notions of justice and equity

required valuing the account as of the date it was transferred, it was an abuse of discretion to use

that date. Third, the Husband testified that the Wife had used $4,000 in marital funds to make an

initial payment to her attorney. That amount was removed from a marital account about two months

prior to the date that the Wife filed for the dissolution. The Wife used marital funds for the down

payment for her attorney’s fees, making it at a time the parties were still living together. After they

separated, the temporary support began, which was specifically designed to include the Wife’s fees.

The Husband should be credited for half of the amount the Wife used to pay her fees. Stantchev v.

Stantcheva, 168 So.3d 313 (Fla. 5th DCA 2015).

6.3. Date of valuation in oral ruling differed from date in final judgment

Where Court announced petition date as the appropriate date for valuing assets and liabilities

but instead used different date to determine the value of the business, appellate court reversed. On

remand trial court is to select valuation date and calculate the equitable distribution accordingly.

Holaway v. Holaway, 197 So.3d 612 (Fla. 5

DCA 2016).

F. COMMINGLING

1. Generally:

Non-marital property may become a marital asset when the non-marital assets are

commingled with marital assets. Non-marital property loses its non-marital character once

commingled. Pfrengle v. Pfrengle, 976 So.2d 1134 (Fla. 2d DCA 2008)(holding that even if an

account is titled in one party’s name, the fact the marital and non-marital funds are commingled,

the entire account became marital.)

In Lakin v. Lakin, 901 So.2d 186 (Fla. 4th DCA 2005), the district court held that funds

received from the husband’s mother’s estate lost their status as non-marital and were subject to

equitable distribution, although securities purchased with funds were kept separate from the money

market portion of the brokerage account when the funds were transferred from the estate to the joint

banking account. The money was transferred from the joint banking account to the brokerage

account, and the husband and the wife treated the entirety of account as a marital asset and the

account became marital.

In Holden v. Holden, 667 So.2d 867 (Fla. 1st DCA 1996), in which the court found that the

evidence did not support the finding that certificates of deposit held in the wife's name and

purchased with distributions on the wife's shares of stock in her family's business constituted marital

assets subject to equitable distribution as the stock itself was a non-marital asset, and the court was

presented evidence that distributions were included in the joint federal tax return. Also, the husband

testified that he assumed that the wife's non-marital income was the source of the purchase money

for acquisition of the property in the husband's name, and he did not establish that distributions

were commingled with marital assets. The certificate of deposits remained non-marital, not subject

to equitable distribution.

Similarly, in Robinson v. Robinson, 10 So.3d 196 (Fla. 1st DCA 2009), five shares of stock

in a closely held corporation that husband acquired prior to the marriage were non-marital property

and, thus, were required to be excluded from the equitable distribution plan in the dissolution

proceeding, regardless of the premarital value of the stock, where there was no evidence of

enhancement, commingling, or gift to the wife.

In McMullen v. McMullen, 148 So.3d 830 (Fla. 1st DCA 2014), the First District agreed

with the former husband that the trial court erred in determining that $250,000 of the distribution

he received from a non-marital joint venture and transferred into his checking account was subject

to equitable distribution. There was competent substantial evidence that did not support the trial

court's finding that those funds were treated, used, or relied on by the parties as a marital asset. See

§ 61.075(6)(b) 3, Fla. Stat. (2011); Holden v. Holden, 667 So.2d 867, 868 (Fla. 1st DCA 1996).

However, as to the remainder of the equitable distribution award, the First District disagreed with

the former husband and found that there was competent substantial evidence that supported the trial

court's findings that the former husband's marital efforts and contributions enhanced the value of

the non-marital joint venture. Thus, the court did not abuse its discretion in determining the amount

of the enhancement to which the former wife was entitled. See § 61.075(6)(a)1b, Fla Stat. (2011).

In Sorgen v. Sorgen, 162 So.3d 45 (Fla. 4th DCA 2014), the First District found that the

wife’s one-third interest in the proceeds from the sale of inherited real property ultimately was

commingled in the joint account, which created a presumption that she gifted an undivided one-half

interest in the proceeds from the sale of the home to the husband. The wife presented no evidence

to rebut that presumption. Although the wife argued that her one-third interest in the proceeds from

the sale of the home remained non-marital because no evidence existed that the funds representing

her one-third interest were untraceable from the funds in the joint account, the First District

ultimately determined that the funds were marital.

1.1. Burden of Proof

The spouse seeking to have jointly titled property declared a non-marital asset “has the

burden of overcoming this presumption by proving that a gift was not intended.” Robertson v.

Robertson, 593 So.2d 491, 494 (Fla.1991); see also § 61.075(6)(a) 3, Fla. Stat. (2008) (“All personal

property titled jointly by the parties as tenants by the entireties, whether acquired prior to or during

the marriage, shall be presumed to be a marital asset. In the event a party makes a claim to the

contrary, the burden of proof shall be on the party asserting the claim that the subject property, or

some portion thereof, is non-marital.”). “The burden of proof to overcome the gift presumption [is]

by clear and convincing evidence.” § 61.075(6)(a) 4, Fla. Stat. (2008)

2. Pre-Marital Property Transformed During Marriage by Acts of Non-Owner Spouse:

As to a chiropractic building owned by the Former Husband prior to the marriage, during

the marriage, Former Wife was an instrumental part in coordinating and helping with the vast

improvements that were done to the building, which included replacing walls, installing new

flooring, adding columns and a flag pole to the front, modifying lighting and other electrical work,

adding an additional parking lot, replacing the roof, and putting in new doors and windows.

Contrary to the Former Husband's arguments, these actions went beyond mere maintenance and

were improvements that enhanced the value of the building. These actions, combined with how the

proceeds from the sale of the building were used, sufficiently transformed the non-marital asset into

a marital asset. The Former Husband did not offer evidence to show that only a portion of the asset

was transformed rather than the entire asset. Thus, the trial court’s determination that the Jordan

Realty asset was a marital asset was affirmed. Jordan v. Jordan, 127 So.3d 794 (Fla. 4th DCA

2013).

3. Non-Marital Property and Prenuptial Agreement; Interspousal Gift: