DIY Divorce in Florida

Divorce, Death and Assets

Concluding our discussion of new Florida family laws passed in 2012, today we discuss HB 401. This legislation amends the Florida Probate Code so you may be wondering why we are venturing down this road. It's simple really. HB 401 specifies the effect of annulment or dissolution of marriage on assets like:

• Life insurance policies
• Employee banefit plans
• IRAs
• Payable on death (POD) accounts
• Securities
• Annuities

There are times when a former spouse maintains an interest in assets after the divorce. Life insurance is a good example. A "payor" spouse may be required to keep life insurance to secure his or her obligation to pay support.This will still be possible after July 1, 2012 so long as the court order requires the asset be held for the benefit of a former spouse.

The problem came about because those assets that are not ordered to be held for the former spouse's benefit require the spouse who owns them to take action to change the beneficiary or to disclaim tan interest after the final judgment. And sometimes the change or disclaimer does not get made before the owner-spouse dies.

In the 2008 Kennedy decision, the US Supreme Court awarded survivor pension benefits to a former spouse even after the beneficiary designation was changed - and even though the parties' agreement said that the surviving spouse waived all interest in the account. That's because there were specific forms that the surviving needed to sign to "disclaim" an interest in the pension. She did not sign those forms. The pension plan required benefits to be paid to the person designated as the "spouse" of the deceased.

The new law takes effect on July 1, 2012. It has many exceptions so you probably need to consult an attorney who provides unbundled legal services if you are representing yourself and have assets that have specific beneficiaries. You want to be clear and to know the effect of your final judgment.

Related Posts:

New Law: Florida Court Jurisdiction

New Law: Florida Natural Guardians SB 990

2012 Florida alimony Reform Update

 

Divorce, Foreclosure & Property Division

Foreclosures are high in Florida. That's no secret. And while some banks may not be seeking deficiency judgments, the Third District recently reminded us that Florida law allows deficiency judgements. That means divorce judges must take into account foreclosure situations when doing a property distribution in a Florida divorce.

Foreclosure & Deficiency Judgments in Florida

A deficiency judgment results when a creditor (the bank) is not paid the full amount of what is owed. That can happen in a foreclosure or a short sale. In the case from Miami, the wife did not want to go into foreclosure so the court awarded her the condo and its mortgage debt and then divided the rest of the property equally in the property distribution.

Here's what the Third District Court of Appeal had to say in Byrne v Byrne (decided in January 2012):

the trial court justified its decision not to assign half of the condominium's debt to Dan by stating that, although Ava wished to preserve her reputation by preventing foreclosure, "most homeowners in the circumstances of the parties would simply abandon the residence and/or return the keys to the banks holding the indebtedness." The trial court therefore concluded that it would be inequitable to require Dan to pay half of the condominium's negative value solely because Ava desired to protect her own reputation.

The trial court's justification was not "legally sufficient" because it erroneously assumed that the negative value associated with the condominium would simply vanish if the parties were to "abandon the residence" or "return the keys to the banks holding the indebtedness." It is well settled Florida law that, absent contractual agreement, debtors remain liable for the portion of their debt not satisfied in a foreclosure sale. See Webber v. Blanc, 22 So. 655, 656 (Fla. 1897)

Dealing with Negative Equity in Property Distribution

So once again, an unequal distribution was overturned on appeal.That's because the couple had no release from the underlying mortgage debt and could have been sued for the entire outstanding mortgage amount.

Just because one spouse wants to avoid foreclosure, even if it appears to others that it is a losing propsoition, the entire debt and negative equity must be considered by the trial court when dealing with foreclosure and divorce in Florida.

Non-Marital Property: Can Your Spouse Claim Your Property?

Non-marital property claims have been increasing in Boynton Beach and West Palm Beach. Ever since the Court decided Kaaa v. Kaaa, and changed the way non-marital property value increases are treated in Florida divorce. The Kaaa Court declared the passive appreciation (increased value) of a non-marital home is a marital asset subject to equitable distribution when marital funds paid down the mortgage during the marriage, these claims for non-marital property have been increasingly through Florida.

Non-Marital Property

Non-marital property in Florida is defined by Florida law as:

1. Assets acquired and liabilities incurred by either party prior to the marriage, and assets acquired and liabilities incurred in exchange for such assets and liabilities;

2. Assets acquired separately by either party by noninterspousal gift, bequest, devise, or descent, and assets acquired in exchange for such assets;

3. All income derived from nonmarital assets during the marriage unless the income was treated, used, or relied upon by the parties as a marital asset;

4. Assets and liabilities excluded from marital assets and liabilities by valid written agreement of the parties, and assets acquired and liabilities incurred in exchange for such assets and liabilities; and

5. Any liability incurred by forgery or unauthorized signature of one spouse signing the name of the other spouse.

Non-Marital Property and Increased Value

Just recently the 5th District Court of Appeal decided that the increased value of the husband's non-marital website domain was a marital asset. The domain name had been registered by the Husband and he had begun website development before the marriage, so the domain was his non-marital asset.

However, during the marriage it was the Husband's efforts that enhanced the value of his website business. The business grew and the family derived the majority of its income from the site. Because the Husband's "marital effort" resulted in more value to his asset, the Wife gets a share of the value increase of the HUsband's non-marital property - the website domain.

Non-Marital Property Valuation

The way the increased value would generally be the value at the filing date less the value on the date of the marriage. If you disagree on those numbers, it will be your responsibility to prove your value number at court. This may require expert testimony. Sometimes you can find public records to support your value - like the Property Appriaser and Tax Collector websites.

If you have any question about how to prove your case, it it best to represented by an attorney. You should at least consult with an experienced attorney if you have any questions about your dissolution of marriage case. ~Because an Ounce of Prevention Really IS Worth it.

 

Marital Home Appreciation - Florida Supreme Court Charts New Course

For years most Florida courts have found that passive appreciation of a nonmarital home is not a marital asset subject to equitable distribution. It used to be that when the mortgage on a non-marital home was paid from marital funds, only the decrease in the mortgage principle was treated as a marital asset and split at the divorce. Those days are gone - both the passive appreciation days and the days of only splitting the mortgage pay-down.

In Kaaa v. Kaaa, the Florida Supreme Court declared that when marital funds paid down a mortgage on a nonmarital home, the passive appreciation of the home is a marital asset subject to equitable distribution.  This is a big change, unless you are in the 1st District Court of Appeals area in the Panhandle. Read the case carefully - it changes property distribution in Florida divorces.

Think You Don't Have Marital Assets?

Since Florida divorce law calls for equitable distribution of marital property, it is important to understand what marital property is. Couples who keep their finances separate throughout the marriage and those who have been separated from their spouse for a long time often believe that they have no marital assets to divide during a Florida divorce.

You may be surprised to find out that you DO have marital assets. It doesn't matter whose name is on the account or the title or the deed. Money or property that you get after the wedding and before the divorce petition is filed is marital in Florida. While there are some exceptions, if it was bought during the marriage - even after separation - it is likely to be a marital asset.

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