However, property division—especially if you and your spouse own a business together—is no laughing matter. That’s why it’s important to know basics about the law.
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, but not necessarily equal. While Florida law requires courts to presume an equal division of marital assets and liabilities, in some cases, courts may justify an unequal division.
“Distribution” generally refers to the assets and liabilities acquired or accumulated during the marriage as a result of some labor or effort made during their marriage. Nonmarital assets and liabilities usually refer to items owned by the husband or wife prior to marriage or received by one of them post-marriage as a gift or inheritance.
Marital assets can include everything from dishes to retirement plans to businesses. Even a nonmarital asset—such as a business launched by one person before the marriage took place—can have a marital component due to appreciation in value resulting from labor and effort made during the marriage.
A common example would be a person who owns a business prior to marriage, continues working in the business during the marriage, and causes the value of the business to appreciate as a result of his or her efforts. In this case, only the value that the business appreciated since the marriage took place would be subject to equitable distribution.
Fortunately, the law realistically acknowledges that if spouses cannot get along in marriage, they almost certainly will not get along in business. Thus, the equitable distribution of a business rarely will result in the former husband and wife staying in business together. Instead, one spouse might be awarded all the ownership of the business, and the other spouse will receive something of offsetting value. Still, each spouse should receive half the total value of all their marital assets and liabilities.
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. He can be reached at firstname.lastname@example.org or 904-296-7440.