Posted by Nydia Streets of Streets Law in Florida Divorce
Before assets and debts can be divided in a Florida divorce, a court must make a determination of what is non-marital versus marital property or debt. The court must also value each asset and debt. Generally, the court starts with the proposition that each party should receive half of the marital estate. However, there are factors for the court to consider in deciding that distribution should be unequal. The case Rennert v. Rennert, 2D18-3906 (Fla. 2d DCA December 16, 2020) is one which reiterates this requirement for equitable distribution and examines the nature of non-marital property which is paid down with marital funds.
The parties were involved in a complex dissolution of marriage, a trial for which spanned eight days over nine months. Despite the long trial, the court failed to identify and value marital assets and debts in its final judgment. The former husband appealed this failure, along with the court’s classification of his non-marital real property. Before the marriage, the former husband acquired ownership of four separate properties, one of which is referred to as Pinehurst in the court’s opinion. During the marriage, another property was purchased by increasing debt against the four non-marital properties. Marital funds were used to pay down this debt during the marriage. At some point during the marriage, the former husband sold three of his non-marital properties plus the property purchased during marriage and used the proceeds to pay off the mortgage which had been consolidated on these properties plus the Pinehurst property.
The trial court classified the Pinehurst property as marital, reasoning it had been commingled with marital funds and was therefore transformed to marital property. The appellate court disagreed, holding “Neither borrowing against Pinehurst to obtain new marital property nor later paying down the mortgage with marital funds caused Pinehurst to lose its separate character. Thus, Pinehurst remains nonmarital property, and the trial court erred in concluding otherwise.” The court continued “The trial court found that Pinehurst had appreciated during the marriage, but did not determine the amount of appreciation or the Wife's share. Thus, the trial court erred in finding that Pinehurst is a marital asset, and consistent with Higgins and Kaaa, we reverse and remand for the trial court to determine the amount of the property's appreciation and the Wife's share.”
Determination of non-marital versus marital assets and debts is a case-by-case analysis. Schedule a consultation with a Miami divorce lawyer to understand how the law may apply to the specific facts of your case.