Is Possession Really 9/10ths the Law?

Florida is an equitable distribution state in which the starting point is an equal division of the spouses' marital assets and liabilities.

Florida is an "equitable distribution" state, which basically means that the Court will look at the parties' particular situation to determine what are the non-marital and marital assets and liabilities; the valuation of the marital assets and liabilities; and the equitable division of the marital assets and liabilities.  

The Court will first set aside any non-marital assets to the particular spouse.  Once this is done, then the remaining assets and debts will be specified by the Court as marital; and then valuated.  The starting premise is to equally divide the assets and debts between the spouses but sometimes a court will permit an unequal distribution if the circumstances warrant. 

I have heard judges say that equitable distribution is simple arithematic.  Take the total assets and debts and divide them by two.  Sounds simple and, in some instances, this is the case.  However, the situation gets murky under the following scenarios:

A.   Let's say, a bank account is titled solely in the Wife's name as it was before the marriage.  At the date of marriage, the Wife had $ 5,000 in this Account.  However, after the date of marriage, both parties contributed their earnings into this Account and would further pay their household and living expenses out of it, including major purchases such as furniture.   Several years later, the Wife files for divorce.  On the date of filing, the Account has $ 5,000.00 in it.  Is this Account and the $ 5,000 in it, marital since it remained in Wife's name?  ANSWER:  NO!  A case in point is Pfrengle v. Pfrengle, 976 So. 2d 1134 (Florida 2nd DCA 2008) in which the Court held that "money is fungible", and once co-mingled, it loses it's separate character (as non-marital).  Title alone is not sufficient to determine whether an asset is marital or non-marital.   So, although the Account still had the same amount in it as when the parties married and the Account remained in the Wife's name, the fact that each party contributed marital funds (their earnings) into the Account and then paid expenses out of it, of which each benefited, makes the remaining $ 5,000, marital.

B.   What if the Husband acquires an inheritance or gift from someone other than his Wife, during the Marriage?  Is it marital?  No.  Non-marital assets include "assets acquired separately by either party by noninterspousal gift..."  Section 61.075(6)(b)2., Florida Statutes.  But, what if the Husband then takes this gift, let's say $ 50,000, and applies it as a down payment on a home for him and his Wife.  At the time of the purchase, the Property is titled in the spouses' names as Husband and Wife.  Thereafter, the parties live in the Home and each contributes to the maintenance of the Home, pay down of the mortgage, etc.  Is the Home marital?  Is the Husband entitled to a greater share of the Home by virtue of his applying his "non-marital" gift funds to the acquisition of the Home?  Well, I see this situation often enough.  During marriage, spouses give each other gifts and then the marriage goes south.  Perhaps the gift was intended for estate planning purposes and, therefore, not necessarily a gift.  However, this argument may be insufficient to overcome the presumption of a gift.  Therefore, the Home is marital.  And, no, chances are the Husband would not be entitled to an unequal distribution for the very same reason ("gift") and further due to the Wife's contributions towards the equity of the Home.

A plethora of case law exists in Florida interpreting Florida's equitable distribution statute (61.075, Florida Statutes).  Each case is unique.  The foregoing elucidates how difficult and, perhaps, painful, a division of the assets and debts can be especially if the parties have an expectation of how things should have been. 

I welcome your comments and questions.  Please note that the foregoing is not intended as legal advice or a representation as to any outcome.  If you are in need of legal advice or simply have a legal question, please feel free to comment or email me at garth@goodmanatlaw.com.  I do offer a free initial consultation.

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