The issue of property division, or equitable distribution, is often the first and foremost concern among dissolution of marriage litigants. While your circumstances may or may not weigh in favor of alimony, child-issues or attorney’s fees; very few divorces can proceed without the identification and division of the marital estate.
Dividing up a marital estate is a four (4) step process which requires: (1.) the identification of assets and debts; (2.) the classification of assets and debts; (3.) the valuation of assets and debts and; (4.) the distribution of assets and debts.
Identification: In order to identify assets and debts you should make a list of each and every piece of property which you would value at more than one hundred dollars ($ 100.00) regardless of when you obtained it, how you obtained it, or whether you consider it to be you (or your spouse’s) separate property. Specifically, you should list all: (a.) real estate; (b.) automobiles; (c.) cash; (d.) bank accounts; (e.) retirement accounts; (f.) boats and recreational vehicles; (g.) jewelry; (h.) stocks; (i.) bonds; (j.) pensions; (k.) Individual Retirement Accounts IRAs and; l) 401-k plans. With respect to debts you should list all mortgages, credit card bills, promissory notes, student loans or other current obligations.
Classification: Once you have identified all of your assets and liabilities the next step is to classify them as marital or non-marital in nature. Florida Statute § 61.075 generally defines marital assets as: (a.) assets acquired during the marriage; (b.) the appreciation of non-marital assets to the extent that appreciation resulted from the expenditure of labor or marital funds and; (c.) gifts between spouses which occurred during the marriage. Non-marital assets on the other hand generally include: (a.) pre-marital assets acquired prior to the marriage or exchanged during the marriage for pre-marital assets; (b.) income obtained from non-marital asses and; (c.) gifts given to one, but not both, spouses.
Valuation: Now that you have identified and classified your marital assets, the third step is to value them. Generally, you will use the date that the petition was filed as your valuation date (although assets that passively appreciate or depreciate such as stocks and real estate will be valued as of the date of trial). There are many ways to value property but the standard must be what the fair market value is (i.e. what a willing buyer would pay and what a willing seller would sell for if neither were acting under any compulsion or pressure). In order to determine this information you will generally look to third-party sources. For example, real estate will generally be valued by a certified real estate appraiser; vehicles can be valued with the Kelly Blue Book; and pensions can often be valued in conjunction with the plan administrator. If you have a privately owned business it you may need to retain a forensic accountant to assist you in the valuation of that asset.
Distribution: The final step in the process is the actual distribution of the assets and debts. The guiding principle in this regard is that in almost every case each spouse will retain fifty percent (50%) of the assets and fifty percent (50%) of the debts. This is not to say that each asset must be divided or sold, instead; you will use the values obtained in step three (3) in order to ensure that both parties end up with roughly the same net worth (excluding non-marital assets/debts).
Thursday, January 21, 2010
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