Divorce Property Division in Pensacola
If you are going through a divorce in Florida or thinking about it, you might have questions about the division of assets and liabilities. Like most things related to divorce, it may be possible for the parties to come to an agreement regarding the division of marital assets, but this doesn’t always happen.
Understanding Equitable Distribution of Marital Property under Florida Law
There are only nine U.S. states that are still classified as community property states, and Florida isn’t one of them. If it were, all assets acquired and earned during the marriage are equally owned by the two spouses, even if only one spouse was generating income.
Instead, Florida is an “equitable ownership” state. This means that property earned or acquired during the marriage belongs to the spouse that earned or purchased it. So, asset distribution will not necessarily split everything down the middle. Depending on a variety of factors, it is possible for one or another spouse to walk away with two-thirds or more of the marital assets.
When the two parties cannot agree on the property settlement, Florida law requires that the judge make an “equitable distribution” of the marital property. An equitable distribution is one that the judge decides is fair to both parties, based on the arguments and evidence presented in court. The judge considers a variety of factors in deciding how to divide the property, including:
- Each spouse’s contributions to the family finances
- Each spouse’s contributions to maintaining the household
- The length of the marriage
- If one spouse contributed to the career or education of the other spouse
- Whether it is important to keep the family home in the hands of the parent with primary custody for the sake of the children
For example, if one spouse maintained the household and cared for the children, that may carry the weight of a financial contribution in a long-term marriage.
Another challenge that occasionally arises is if one spouse decides to hide assets from the other. Our firm is very adept at uncovering any assets to bring to the negotiating table as part of full disclosure.
How to Transfer Property
If one spouse has the means to afford the house by themselves, you both have the option of retitling the deed in that spouse’s name. Assuming s/he does not have the cash to buy out the other spouse, refinancing as the sole owner of the property is the cleanest option to remove the former spouse from the mortgage.
This could involve filing a quitclaim deed removing the other spouse, but some lenders do not allow this.
Assuming a mortgage is needed, the spouse who wants to keep the home may have to refinance and go through the process again:
- Requalifying – They must make sure they can cover the cost of the mortgage and utilities, cost of repairs, and taxes.
- Retitling the Property – This step involves filing a quitclaim deed to transfer ownership to the new sole owner.
- Interspousal Transfer Deed – This transfers ownership between a married couple. This option is advantageous if one spouse has poor credit and the couple wants to maintain the lowest mortgage interest rate available to the spouse with a better credit score.
Check with the lender, because retitling the property is cleaner and more straightforward than re-negotiating new terms on a mortgage, especially if rates have gone up. It is also essential to make sure the language of any new deed is as specific as the law mandates.
Generally, the lender requires a copy of the divorce decree and the quitclaim deed to complete the mortgage assumption. If done legally, the other spouse will have their name removed from the mortgage, eliminating any liability if the ex-spouse defaults on payments.
Florida law outlines how a transfer of property must be conducted legally.
- Both spouses must be listed who are involved in the transfer.
- It must include the property legal description and parcel identification.
- A notary public must sign the deed.
- The new deed must be recorded with the Clerk of the Court in the same county where the property is located.
- The new owner should claim a homestead exemption on the property if it is her only home. A homestead exemption promotes stability in the event of financial misfortune and demands of creditors.
Be aware, while the quitclaim deed changes ownership of the home, it has no impact on the outstanding mortgage loan.
Marital Property and Separate Property
Before the court can divide the marital property, it must decide what the marital property is. In general, all income and assets (and, importantly, all debts) acquired during the marriage by either spouse is marital property, while property a spouse had prior to marriage or after separation is separate property. There are many exceptions to this general rule, however, and separate property can become marital property (and vice versa) depending upon how it is treated by the spouses.
After it has been determined which assets go into which categories, a value will be placed on each item. This might require hiring an appraiser, CPA, or both. The courts will then decide about the division of assets and liabilities between you and your spouse. Some of the factors that might play a role in this decision include:
- How long you were married;
- The economic circumstances of each spouse;
- The debts that are attributed to each spouse;
- Whether a child is going to continue living in the marital home;
- Whether one spouse cut short a career or education to further the other’s career or take care of children;
- The contributions of each spouse to the marital assets, as a wage earner, and a parent;
- If any martial assets were intentionally hidden or destroyed with the intent to deprive the other spouse of assets; and
- Any difficulties associated with dividing a certain asset, such as a business, home, or vacation condo.
If the assets in your household include stocks, business ownership interests, retirement accounts and other complicated assets, make sure you are represented by knowledgeable and experienced legal professionals who know their way around high net worth cases. At Spencer Law, we understand how to navigate the technicalities of the law to make sure that all marital property is correctly identified as such. Furthermore, we have the skills and knowledge to argue for an accurate valuation of complicated assets, which is essential to an equitable distribution.
All of this can be outlined in a prenuptial agreement before the marriage to specify how assets will be divided in the case of a divorce. It can also be accomplished in the form of a will, a deed, or some other evidence to prove the intention of the deceased family member, in the case of inheritance.
Get Help with the Property Division
For sound advice and effective representation in the property division or other aspects of your case, contact Spencer Law, P.A. at our offices in Pensacola and Sandestin. Regardless of the complexity of your property, you will find a knowledgeable and capable attorney ready to make sure you are well-represented in your property settlement case.
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