Marital, Nonmarital, Premarital, and Inherited Property
One of the first questions many successful women ask when considering divorce is:
“What property is actually mine?”
The answer is not always as simple as whose name appears on an account or who earned the money used to purchase an asset.
Florida is an equitable-distribution state. In a dissolution proceeding, the court identifies marital and nonmarital assets and liabilities, sets apart nonmarital property, and begins with the premise that marital assets and liabilities should be distributed equally unless the circumstances justify a different result.
That makes identifying and documenting property before filing an important part of pre-divorce planning.
“I Earned It” Does Not Necessarily Mean “It Is Mine”
A professional woman may have earned the majority of the household income during the marriage.
That does not automatically make assets purchased with that income her separate property.
Florida law generally includes assets acquired during the marriage within the definition of marital assets, regardless of whether they were acquired individually or jointly, unless they are established as nonmarital.
This can include retirement benefits, deferred compensation, investment accounts, real estate, and interests accumulated in closely held businesses during the marriage.
What About Property You Had Before Marriage?
Property acquired before marriage may be nonmarital.
But the analysis may become more complicated when something happens to that property during the marriage.
For example:
- Marital money was used to pay down the mortgage on premarital real estate;
- Either spouse’s efforts increased the value of a premarital business;
- Premarital money was moved into jointly titled accounts;
- Separate funds were repeatedly mixed with marital funds; or
- An asset changed title during the marriage.
Florida law recognizes that the enhancement or appreciation of certain nonmarital property attributable to marital funds or marital efforts may create a marital component. The statute also specifically addresses marital contributions toward principal reduction and appreciation of nonmarital real estate.
This is why tracing records can be extremely important.
Inheritances and Gifts Require Their Own Review
An inheritance or gift from a third party may constitute nonmarital property under Florida law.
But that should not lead to the assumption that every inherited dollar will automatically remain separate regardless of what occurred afterward.
If you received an inheritance, gather:
- Estate or probate documents;
- Correspondence regarding the inheritance;
- Account statements showing receipt of the funds;
- Records showing where the funds were deposited;
- Closing documents if inherited funds purchased property; and
- Statements showing what happened to the asset afterward.
The same applies to significant gifts from family members.
The ability to show where property came from and what happened to it can be just as important as knowing its current value.
Do Not Forget Retirement and Deferred Benefits
Retirement assets are sometimes overlooked because the money cannot yet be spent.
Florida’s equitable-distribution statute expressly includes vested and nonvested rights and benefits accrued during the marriage in retirement, pension, profit-sharing, annuity, deferred-compensation, and insurance plans as marital assets.
That makes it important to identify:
- 401(k)s;
- 403(b)s;
- IRAs;
- Pension benefits;
- Profit-sharing;
- Deferred-compensation programs;
- Executive retirement plans; and
- Other employment-related benefits.
If an account existed before marriage, locate statements showing its premarital value if available.
Timing May Matter
Florida law establishes a statutory cutoff for identifying or classifying marital assets and liabilities based upon the earliest of certain events, including a valid separation agreement establishing a date or the filing of the dissolution petition. Valuation dates, however, may vary depending on the circumstances and the particular asset.
That is another reason filing should be a considered legal decision rather than an impulsive one when substantial or complicated assets are involved.
Use the Checklist to Begin Your Asset Inventory
The Perez-Calhoun Law Firm Pre-Divorce Financial Planning Checklist contains sections designed to help you identify:
- Premarital property;
- Inheritances and gifts;
- Bank and investment accounts;
- Retirement assets;
- Real estate;
- Business interests; and
- Supporting records that may assist your attorney in determining whether tracing or valuation is necessary.
Do not decide for yourself that something is irrelevant simply because it is titled only in your name—or only in your spouse’s name.
Identify it first. Let the legal analysis come next.
Allow Perez-Calhoun Law Firm to Help You Understand What You Have Built
The classification of property can be one of the most significant financial issues in a Florida divorce.
Allow Perez-Calhoun Law Firm to help you with your pre-divorce planning, identify the questions that should be addressed before filing, and evaluate which assets may require additional tracing, valuation, or legal analysis.
Your Financial Life May Cross Borders: Out-of-State and International Assets
This article provides general information concerning Florida family law and is not legal advice. Property classification is fact-specific and should be evaluated by qualified counsel.
