Posted by Nydia Streets of Streets Law in Florida Divorce
Can property a spouse owned before marriage be transformed into marital property? Yes, in some instances, but usually the transformation is intentional, such as a gift to the other spouse. In instances in which it is not intentional, however, the spouse claiming that non-marital property has been transformed has the burden of proving this to the court.
In the case Socarras v. Vassallo, 3D17-2579 (Fla. 3d DCA February 13, 2019), the former husband appealed a final judgment classifying his premarital real estate as marital because he took out a line of credit on the property during the marriage. The appellate court announced the standard of review was as follows, “A trial court's determination that an asset is marital or nonmarital involves mixed questions of law and fact. Although we defer to the trial court's factual findings if they are supported by competent, substantial evidence, we review the trial court's legal conclusions de novo.”
The evidence presented at trial showed the former husband purchased the disputed property 2 years prior to the parties’ marriage. The property remained titled in the former husband’s name, but the parties resided in the house during the marriage. The former husband was the sole breadwinner during the marriage and made all payments on the house. No evidence was presented that Former Wife contributed marital labor or funds to the property. The former husband subsequently obtained a line of credit for an investment overseas using the property as collateral. Some of the investment was recovered and it was returned to the line of credit without commingling with marital funds.
The appellate court reversed the trial court’s determination that this property was transformed to marital property. The court held, “Consequently, at trial, the Former Wife failed to establish that the Former Husband's Miami Property had been "transformed" to a marital asset. [. . .] On these facts, only an enhancement in value of the Miami Property, if any, minus any indebtedness, would become a marital asset for equitable distribution purposes. Accordingly, we reverse the judgment on appeal to the extent it classifies the Miami Property as a marital asset and relies upon this classification in determining equitable distribution. We remand with directions to treat the Miami Property as the Former Husband's nonmarital asset. On remand, the Miami Property must be classified as a nonmarital asset and the trial court shall revisit the equitable distribution. The Former Wife is entitled to her share of the appreciation, if any, in value of the marital interest in the Miami Property.”
Protecting your premarital property is best done through a prenuptial agreement. This type of agreement sets aside to each party before marriage what will be each respective spouse’s property before and after divorce. This way, there is no need to spend money litigating these issues at divorce. Schedule a consultation with a Miami prenuptial agreement attorney to learn how such an agreement might benefit you.