Substantial assets in divorce cases evoke all sorts of thoughts and fears. Who among us wants to lose half of what they have? Our income and wealth are our financial security, now, on a rainy day and for retirement. While married couples are in love and thinking in terms of forever, this is not an issue; however, all that changes in the face of divorce.
The primary issues in a divorce are: (1) whether one is entitled to be divorced, (2) property division, (3) alimony or spousal support, (4) children, and (5) attorney’s fees to be paid by one spouse on behalf of the other. Arguably, each of these issues might involve some element of finance, but financial issues primarily begin with property division and can affect alimony and attorney’s fees.
In theory, a court should first determine property division, then alimony, and finally attorney’s fees. For instance, if a divorcing spouse receives actual or potential income-producing assets, he or she might not need as much or any alimony or a contribution to attorney’s fees.
When people are married to each other, they naturally accumulate assets and liabilities together. When their marriage ends, those assets and liabilities must be divided. Since 1980, Florida has viewed marriage as a partnership. For instance, if one spouse stays home and raises children and the other is dedicated to the “pursuit of material wealth,” the courts generally consider that each person is making an equal contribution to the marital partnership. Conceptually, like a business partnership, the marital partners should share in the division of their assets and liabilities.
To accomplish this, Florida law uses a legal method called “equitable distribution,” which differs from “community property” used in some other states. Under Florida law, “equitable” means fair, and “distribution” refers to marital assets and liabilities, which generally are those acquired or incurred during the marriage. While Florida law requires courts to presume an equal division of marital assets and liabilities, courts may justify an unequal division in some cases.
In cases involving moderate or substantial wealth, each party might receive income-producing assets, such as businesses, rental property, retirement plans, investments, cash, trusts or pretty much anything capable of producing income for an individual. The income derived from assets would be considered the same as income from working for purposes of determining the money available for alimony and attorney’s fees.
For example, if one spouse owns a business that produces a healthy income, and the other party is only able to earn an entry-level salary, the business is an asset providing a means for the owner to pay alimony and the other’s attorney’s fees. In contrast, if the business owner was able to support herself with her business income, and the non-owner spouse had a similar amount of investment income, neither party likely would be a candidate for paying alimony or attorney’s fees. Basically, the closer one is to being able to support himself or herself at the standard of living attained during the marriage, the less likely that person is to receive alimony or attorney’s fees.
Financial issues are only part of many weighty issues in divorce. It’s simply an overall traumatic experience. Considering the emotions involved, differing circumstances of each family, legal complexities, and effects likely to last for years to come, virtually everyone should have some legal advice. At a minimum, one should seek advice as early as possible in the process from someone who practices family law, but also may want to consider an attorney with further specializations.
Lawrence Datz is a partner at Datz & Datz, P.A. with more than 30 years of family law experience. He is Board Certified in Marital and Family Law, a Fellow of the American Academy of Matrimonial Lawyers and a Master in the Florida Family Law Inn of Court.
