Most Floridians know that their state is a community property state, but the exact meaning of the term can be difficult to grasp. This difficulty becomes more acute when a wealthy couple is faced with dividing their assets in a divorce. The basic rule of property division in Florida is that all property acquired during the marriage must be divided equally and property owned before the marriage is separate property and not subject to the community property rules. For wealthy couples, especially those in their second or third marriage, the distinction between marital and separate property can become the most difficult issue in their divorce.
One problem is created by both spouses having separate and high-paying jobs, such as each being a lawyer employed by different firms. A seemingly simple solution can become very complicated in practice. Suppose each spouse is allowed to keep his or her income – a very simple and fair solution. But what about interest earned by income deposited in a bank account or used to buy stock? And what about income used to purchase shares in a retirement plan in which the other spouse has no legal interest? Generally, courts will allow each spouse to keep their individual income and the fruits of that income. If, however, the division results in a grossly unfair distribution of marital assets, The court may decide to reduce the share of the higher earning spouse to protect the financial situation of the lesser earning spouse.
Wealthy couples who have been married for a significant period of time, say in excess of ten years, may have commingled a great many of their assets. Most such couples hold title to their residence as joint tenants, and the house has more likely than not experienced a significant increase in value. This increase is a marital asset unless one spouse used a separate asset, say income from a trust fund, to pay for improvements. Or the couple may have a family business in which only one of them is active. Is the value of the shares of the company a joint or separate asset? In most cases courts will make separate awards of property reflecting any salary paid by the business and the asset value of the business.
As can be seen dividing assets can be a complicated and difficult issue for wealthy couples. This is why the assistance of an experienced divorce attorney is a virtual necessity in a high asset divorce.