What is obtained during the marriage belongs equally to both spouses — it’s marital property. So, it’s only natural that when a couple gets divorced these “things” need to be equally split between them. This is equitable distribution. And aside from alimony and child support, no other divorce matter causes more anxiety and confusion.
Florida statute provides that once an asset or liability is determined to be marital and valued as of a certain date, it is then fairly divided between the parties. Distribution of marital assets and liabilities is made without regard to alimony and support need of either party.
Equitable distribution does not mean that everything little thing needs to be split equally on an individual item basis. It does mean that when all the “splitting” is done; the distribution of assets and liabilities should “balance” or be equal between the parties. To look at how this works, let’s see what happened in the divorce of Joan and Tom. The couple was married for 20 years. They owned marital and vacation homes. Each one also had a primary vehicle.
The couple jointly owned a family business, which was started about 15 years ago. Via this business, Tom was able to contribute to an IRA.
Through the years, the couple managed to save some money and acquire stock in some publicly traded companies. Being prudent, the couple kept credit card debt to a minimum.
When it was all said and done and in order to reach a 50/50 distribution of all marital assets and liabilities, Tom owed Joan $37,750. This was the amount needed to “balance” the distribution between the couple. The couple agreed that Tom would pay Joan this amount over a four-year period at an interest rate of five percent.
It’s important to note that not every couple or judge would distribute the assets and liabilities as they were in this case. There are many options for the distribution of assets and liabilities in order to arrive at an equitable distribution. If you would like to see the sample equitable distribution between Joan and Tom, please send me a message at the email noted below.
Equitable distribution is one of those areas where parties to a divorce need to be prepared beforehand. Clearly understanding what the real assets and liabilities are is fundamental to negotiating what you want to keep or give away.
As is life, misguided and uninformed decisions always cost money in a divorce.
Carlos Blanco founded Matters of Divorce www.mattersofdivorce.com to provide answers, referrals and support to people considering divorce or who recently have been divorced. He may be contacted by calling 305-908-1171 or sending email to firstname.lastname@example.org