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Certain Issues in Equitable Distribution of Property

September 5th, 2014 Comments off

In a dissolution of marriage involving property, the trial court must determine what asset is marital versus non-marital, what is the value of each asset, and decide how to split the assets. The date of determining the existence of marital versus non-marital assets is the date of filing of the petition. Because cases can take several months or even years to conclude, an asset may exit at the date of filing but not exist, or its value may substantially decrease, by the date of trial. A perfect example is a bank account. In this situation, what is a court to do?

In a recent case in Ballard v. Ballard, 39 Fla. L. Weekly 1670c (Fla. 1st DCA, 2014), the parties owned a bank account that was significantly diminished by the Husband during the dependency of the case. At the date of filing, the bank account had $42,012; by the trial date, the account had no funds. The Husband testified that he used some of the money to pay his attorney’s fees. The trial court did not find any misconduct on the part of the Husband but nonetheless included the $42,012 in the equitable distribution scheme.

The court found error to include the bank account as an existing asset to be divided parties, holding that

“[s]ums that have been diminished during dissolution proceedings for purposes reasonably related to the marriage, such as attorney’s fees for the dissolution, should not be included in an equitable distribution scheme unless there is evidence that one spouse intentionally dissipated the asset for his or her own benefit and for a purpose unrelated to the marriage.”

In the Ballard case, the court also considered an issue of whether equity acquired in a pre-marital house due to mortgage payments made during the marriage is a martial asset. The court answered this in the affirmative holding that

“increase in equity resulting from paying down the mortgage with marital funds constitutes a marital asset subject to equitable distribution.”

For more information see Ballard v. Ballard, 39 Fla. L. Weekly 1670c (Fla. 1st DCA, 2014). Liridona Sinani is an Attorney with Martin Law Firm, P.L. who practices Family Law and Civil Litigation. She is admitted to practice law in the State of Florida and the Federal Court for the Middle District of Florida. She primarily practices in Lee County and Collier County Florida in Cape Coral, Fort Myers, and Naples.

What is durational alimony?

August 27th, 2014 Comments off

There are several different types of alimony within Florida Law including permanent periodic alimony, rehabilitative alimony, bridge the gap alimony, and durational alimony.

Durational alimony is alimony for a set period of time.

The length of an award of durational alimony may not be modified except under exceptional circumstances and may not exceed the length of the marriage.”  Cooley v Cooley, 106 So. 3d 17, 17 (Fla. 2d DCA 2013).

 

In one recent Second District Court of Appeal case, the trial court ordered durational alimony for a period of fifteen (15) years.  However, the length of the marriage was only fourteen years and ten months.  The appellate court found it error to order alimony for a period of time in excess of the length of the marriage and remanded the matter to the trial court.

 

See, Egle v. Krinsk, 39 Fla. L. Weekly D1450 (Fla. 2nd DCA 2014).

 

Dustin Michael Butler is an Attorney with Martin Law Firm, P.L., whose practice focuses in Family Law, Civil Litigation, and Estate Planning.  He is admitted to practice law in the State of Florida and the Federal Court for the Middle District of Florida. He primarily practices in Lee County Florida in Cape Coral and Fort Myers, Florida.

If I am relocating, can I seek to modify the time-sharing agreement of my minor child?

January 16th, 2014 Comments off

It is important to note that any modification to a determination of parental responsibility, a parenting plan, or a time-sharing schedule may not be achieved without a showing of a substantial, material, and unanticipated change in circumstances. In addition, the modification must be in the best interests of the child. In a recent case in Moore v. Mcintosh, 39 Fla. L. Weekly 78a (Fla. 1St DCA 2014), the 1st DCA held that relocation does not itself constitute a substantial change in circumstances to warrant modification of a time-sharing agreement. The court cited several cases in which relocation did not constitute a substantial change in circumstances.

In Moore, the parties had entered into a marital settlement agreement which specifically stated that the parties anticipated to reside in close proximity to one another and in the same school district. Then, both parties relocated to different cities. The Court held that

although this expresses a hope that the parties would remain in close proximity to each other, the possibility of relocation is expressly contemplated.

In sum, if one party is seeking to relocate, he or she must still show a substantial change in circumstances to justify the relocation and the change in the time-sharing agreement. This hurdle may be avoided with proper drafting of your time-sharing agreement.

For more information, see Moore v. Mcintosh, 39 Fla. L. Weekly 78a (Fla. 1St DCA 2014). Liridona Sinani is an Attorney with Martin Law Firm, P.L. who practices Family Law and Civil Litigation. She is admitted to practice law in the State of Florida and the Federal Court for the Middle District of Florida. She primarily practices in Lee County and Collier County Florida in Cape Coral, Fort Myers, and Naples.

If my ex-spouse is currently in a supportive relationship, can I seek to reduce or terminate my alimony obligation?

January 13th, 2014 Comments off

Pursuant to Florida statutes, alimony may be awarded when one spouse has a need for financial assistance and the other spouse has the ability to pay. If a court awards alimony, then the obligor may later seek to modify or terminate the alimony obligation if there is a substantial change in circumstances or if the obligee has entered into a supportive relationship. Pursuant to Florida statutes, the court has discretion to reduce or terminate an award of alimony if the court finds that since the granting of the divorce decree, a supportive relationship has existed between the obligee and a person with whom the obligee resides (“cohabitant”).

The burden is on the obligor to prove by a preponderance of the evidence that a supportive relationship exists. In a recent case, Gregory v. Gregory, 39 Fla. Weekly D1A (Fla. 5th DCA 2014), the 5th DCA held that once the court finds that a supportive relationship exists, the burden of proof shifts to the obligee to prove that he or she has a continued need for the financial support. In that case, the Husband sought to reduce or terminate his alimony obligation based on the wife’s supportive relationship. Ultimately, the court held that the  wife was living in a supportive relationship and she failed to prove that she had the continued need for alimony.

Some of the facts on which the court relied included former wife’s inheritance of $370,000 from her mother, wife’s ability to make substantial gifts to her son and cohabitant, and the cohabitant’s valuable non-economical assistance to the wife. Further, evidence showed that the wife supported her cohabitant to a certain extent. In response to this, the 5th DCA stated “the former husband is under no obligation to help support the former wife’s cohabitant.” While these factors were particular to this case, they are not exclusive and each individual case is unique.

For more information, see Gregory v. Gregory, 39 Fla. Weekly D1A (Fla. 5th DCA 2014). Liridona Sinani is an Attorney with Martin Law Firm, P.L. who practices Family Law and Civil Litigation. She is admitted to practice law in the State of Florida and the Federal Court for the Middle District of Florida. She primarily practices in Lee County and Collier County Florida in Cape Coral, Fort Myers, and Naples.

Does Florida have jurisdiction over my child support case?

November 18th, 2013 Comments off

In order to prevent jurisdictional disputes with courts in other states on matters relating to child support and time sharing, Florida has enacted the Uniform Child Custody Jurisdiction and Enforcement Act (UCCJEA). Pursuant to the UCCJEA, the exercise of jurisdiction in making an initial custody determination lies with the child’s home state. “Home state” is the state in which a child lived with a parent or a person acting as a parent for at least six consecutive months immediately before the commencement of a proceeding involving a child.

Many jurisdictional disputes arise when one parent decides to remove the child from Florida and move to another state with the child. Then, either one or both parents will file a petition seeking establishment of timesharing and child support in their respective states. In this instance, the courts will have to decide whether Florida or the other state has jurisdiction to preside over the case.

In the recent case of Barnes v. Barnes, 38 Fla. L. Weekly D2255 (Fla. 4Th DCA 2013), the mother and father moved with their children to Florida in October 2010. On August 24, 2011, the mother and the children moved to Colorado. On December 8, 2011, the father filed a petition in Florida for a parenting plan, child support, and timesharing. The Mother also filed a petition for dissolution of marriage in Colorado.

In Barnes, the issue was whether Florida or Colorado was the home state. The trial court declined to exercise jurisdiction because it determined that Colorado was the home state. In overturning the trial court’s decision, the 4th DCA relied on a previous case decided by the 2nd DCA, M.A.C. v. M.D.H., 88 So. 3D 1050 (Fla. 2d DCA 2012). In M.A.C., the court looked at the time period between six months prior to the filing of the petition and the date of the filing of the petition to determine if Florida qualified as the home state at any time in between.

In Barnes, because the Father filed his petition on December 8, 2011, the court looked at the time period of June 8, 2011 and December 8, 2011 to determine if Florida qualified as the home state at any time in between. The court found that as of June 8, 2011 the children had been living in Florida for eight months. Therefore, the court held that Florida was the home state.

Jurisdictional disputes can be complex. If a case is improperly filed, it may lead to additional time and expense. It is important to contact an attorney before you file your case to determine if Florida has jurisdiction. You may always contact Martin Law Firm for a free consultation.

For more information, see Barnes v. Barnes, 38 Fla. L. Weekly D2255 (Fla. 4Th DCA 2013). Liridona Sinani is an Attorney with Martin Law Firm, P.L. who practices Family Law and Civil Litigation. She is admitted to practice law in the State of Florida and the Federal Court for the Middle District of Florida. She primarily practices in Lee County and Collier County Florida in Cape Coral, Fort Myers, and Naples, Florida.

The trial court ordered that my spouse pay my attorney’s fees, but my spouse refuses, can I enforce the order?

October 21st, 2013 Comments off

Florida Statute § 61.16 provides for attorney’s fees to be paid by a more financially abled party in Dissolution of Marriage cases. Florida Statute  § 61.16  provides:

The court may from time to time, after considering the financial resources of both parties, order a party to pay a reasonable amount for attorney’s fees, suit money, and the cost to the other party of maintaining or defending any proceeding under this chapter, including enforcement and modification proceedings and appeals,”

Fla Stat. § 61.16 (2013). This is not to say that the other spouse always has to pay attorney’s fees in divorce cases, but rather that both parties are entitled to be on “equal footing” within the family law courts. Therefore when there is need by one spouse and an ability to pay by the other spouse, the court may order attorney’s fees to be paid.

Unfortunately, the order to pay often occurs later in the case, after you have already paid some or all of you attorney’s fees.  Once this occurs, the money paid directly to the attorney is refunded to the client.  Therefore, you may have a strong interest in your spouse actually paying the ordered amount.

While it is well settled that the attorney who is entitled to receive the monies may bring a motion to enforce the order of attorney’s fees and costs, there was some question as to whether the actual spouse may enforce the order. The Second District Court of Appeals answered this question in a recent case.  The Former Husband brought a Motion to Enforce the Court’s order to pay attorney’s fees and costs to the court.  The trial court found that he did not have standing to bring said motion.  That is to say, that the Former Husband could not bring the motion on his own before the court.

The Second District Court of Appeal reversed and found that the order to pay attorney’s fees on behalf of of the Former Husband was an award to the Former Husband and therefore he could bring a Motion to Enforce.

Martin Law Firm, P.L. will always aggressively seek attorney’s fees when they are appropriate.  Once an order to pay them on behalf of a client is entered Martin Law Firm, P.L. will also aggressively seek collection of that order.

See, Coppola v. Coppola, 38 Fla. L. Weekly D2045 (Fla. 2nd DCA 2013).

Dustin Michael Butler is an Attorney with Martin Law Firm, P.L., whose practice focuses in Family Law and Civil Litigation.  He is admitted to practice law in the State of Florida and the Federal Court for the Middle District of Florida. He primarily practices in Southwest Florida including Lee County and Collier County, Florida, Fort Myers, Cape Coral, and Naples.

Is a Court Required to Consider the Tax Implications of An Alimony Award?

September 29th, 2013 Comments off

In determining whether to award alimony, the court must first make a determination as to whether either party has an actual need for alimony and whether either party has the ability to pay alimony. If both of these questions are answered affirmatively, then in determining the proper type and amount of alimony, the court must consider all relevant factors specified in Fla. Stat. § 61.08(2). One of the enumerated factors in the statute is “[t]he tax treatment and consequences to both parties of any alimony award, including the designation of all or a portion of the payment as a nontaxable, nondeductible payment.” Fla. Stat. § 61.08(2)(h).

In Tarkow v. Tarkow, 38 Fla. Law Weekly D1827 (2nd DCA, 2013), the parties were married for twenty-eight years and divorced in 2000. Pursuant to the final judgment, the Former Husband was required to pay the Former Wife $6000 per month in permanent periodic alimony. In 2010, the Former Husband filed a supplemental petition seeking to reduce or terminate his alimony obligation. In support of his petition, he claimed that there was a “substantial change in circumstances,” in that his income was reduced, and that the former wife was in a “supportive relationship.”

After a hearing on the issue, the presiding General Magistrate found that the wife was in a supportive relationship and that there was a substantial change in circumstances – that the change was not contemplated at the time of the final judgment, and that the change is sufficient, material, involuntary, and permanent in nature. Consequently, the General Magistrate reduced the alimony award. During the hearing, in order to determine her need, the Former Wife introduced a chart into evidence which listed her living expenses. Part of her living expenses included a $13,497 item for State and Federal income tax liabilities attendant with her investment and retirement incomes. However, in calculating the Former Wife’s need, the trial court declined to consider the income tax expenses.

In her appeal, the Former Wife argued that the circuit court erred in failing to consider the tax consequences of the reduced alimony award to the Former Wife in determining her need for continued support. The 2nd DCA agreed, concluding that

“[i]t is error for the trial court to fail to consider the tax implications of an alimony award when such evidence is presented.” (citing Farley v. Farley, 800 So. 2D 710, 712 (Fla. 2nd DCA 2001)).

In this instance, the case was reversed on this issue and the trial court was ordered to reconsider the reduction in light of the Former Wife’s income tax obligations. For more information, see Tarkow v. Tarkow, 38 Fla. Law Weekly D1827 (2nd DCA, 2013)

Liridona Sinani is an Attorney with Martin Law Firm, P.L. who practices Family Law and Civil Litigation. She is admitted to practice law in the State of Florida and the Federal Court for the Middle District of Florida. She primarily practices in Lee County and Collier County Florida in Cape Coral, Fort Myers, and Naples, Florida.

My Marital Settlement Agreement gave me ½ interest in my spouse’s retirement, now my spouse is retired, what do I get?

September 16th, 2013 Comments off

It is common practice to divide retirement accounts at the time of divorce.  Often this is accomplished through a Qualified Domestic Relations Order (QDRO).  A QDRO orders the account holder to divide the applicable account and is entered after the final judgment of dissolution of marriage.

In one recent example out of the First District Court of Appeal, the parties agreed to divide the Husband’s pension and 401k in half as of the date of their agreement.  They also agreed to do this by QDRO.  However, the QDRO was never arranged by the parties and thus was not entered by the trial court.  Once the Husband retired the Wife brought an action to have the QDRO entered (approximately 20 years later).

Fortunately the value of the Wife’s interest had increased substantially since 1993.  The Husband argued that she was only entitled to the specific dollar amount she would have received in 1993 ($18,111.49) and the Wife argued she was entitled to the amount she was to receive and any gains on that amount ($103,000.00).  The trial court initially agreed with the Husband’s argument.

On appeal the First District remanded the case finding that the Wife was entitled to any gain or loss on the retirement account.  As is often the case on appeal the Court looked very carefully at the language of the agreement.  The Court found that if a specific dollar amount had been intended the parties would have stated the amount instead of giving her an ½ interest in the account.

When dealing with complex matters such as the division of retirement accounts it is always advisable to have an attorney draft the marital settlement agreement and assist in providing a QDRO to assure proper division.  Martin Law Firm offers assistance for people in need of Uncontested Dissolution of Marriages or help drafting a Marital Settlement Agreement.  This can save the confusion and difficulty many years later as experience in the above example.

See, Graham v. Graham, 38 Fla. L. Weekly D1869 (Fla. 1st DCA 2013).

Dustin Michael Butler is an Attorney with Martin Law Firm, P.L., whose practice focuses in Family Law and Civil Litigation.  He is admitted to practice law in the State of Florida and the Federal Court for the Middle District of Florida. He primarily practices in Southwest Florida including Lee County and Collier County, Florida, Fort Myers, Cape Coral, and Naples.

What is goodwill in a professional practice, how is it valued, and is it a marital asset?

August 18th, 2013 Comments off

In a dissolution of marriage proceeding, the parties must present competent substantial evidence of the existence and value of marital assets. The court must identify each asset, designate it as marital or non-marital, and equitably distribute the marital assets. One area of complexity in the equitable distribution scheme is the valuation of a business and goodwill attributed to the business.

Generally speaking, a business acquired during the marriage is marital property. Additionally, goodwill in a professional practice is marital property. However, personal goodwill, which is attributable solely to a party’s effort in a business, is not marital property. The Florida Supreme Court has held that the determination and value of goodwill in a spouse’s practice should be made on a case-by-case basis with the assistance of expert testimony. Thompson v. Thompson, 576 So. 2d 267, 270 (Fla. 1991).

In a recent case, the 4th District Court of Appeal, with the aid of Florida Supreme Court precedent as well as its own precedent, provided a little more guidance on how to distinguish personal and enterprise goodwill. In Schmidt v Schmidt, 38 Fla. L. Weekly D1491a (Fla. 4th DCA 2013), the husband had a retail optical business, which the trial court had valued at $2,520,562 for purposes of equitable distribution. The wife’s expert testified that the total fair market value of the business was $3,519,519. The expert testified that out of that figure $974,199 represented personal goodwill attributable to the husband, which was subtracted from the fair market value. The expert further testified that the $2,520,562 assumed and required the husband to execute both a non-compete and a transitional consulting agreement. The expert did not know what the value of the business would be if the husband were not required to sign a non-compete agreement.

The 4th DCA, relying on the Thompson case, held that “enterprise goodwill, defined as the value of a business ‘which exceeds its tangible assets’ and represents ‘the tendency of clients/patients to return to and recommend the practice irrespective of the reputation of the individual practitioner’ is a marital asset. . . .[However,] personal or professional goodwill attributable to the skill, reputation and continued participation of an individual is not a marital asset.” Id. (citing Thompson, 576 So. 2d at 269, 270). The 4th DCA found the necessity of a covenant not to compete to be a significant factor in determining the value of enterprise goodwill, as such a covenant signals the existence of personal goodwill. The court looked to its own precedent where previous cases held that if a business could not be sold without an accompanying covenant not to compete or without a non-solicitation or non-piracy agreement, then the value of the business was attributable to the individual spouse’s personal reputation. As such, the court ultimately held that

[b]ecause the $2,520,562 value requires execution of a non-compete agreement, it is clear that such valuation still includes a personal goodwill component.”

The court reversed on this issue and remanded the issue for further proceedings. Why is this all important? Because the value of personal goodwill must be excluded when assigning a value to a business for purposes of equitable distribution.

For more information, see Schmidt v Schmidt, 38 Fla. L. Weekly D1491a (Fla. 4th DCA 2013). Liridona Sinani is an Attorney with Martin Law Firm, P.L. who practices Family Law and Civil Litigation. She is admitted to practice law in the State of Florida and the Federal Court for the Middle District of Florida. She primarily practices in Lee County and Collier County Florida in Cape Coral, Fort Myers, and Naples, Florida.

My Marital Settlement Agreement provides for attorney’s fees in case of a default, what does that mean?

August 2nd, 2013 Comments off

A common clause in marital settlement agreements provides for prevailing party attorney’s fees and costs in case of a default which must be enforced by one party.  The question then turns on what is “default?”

In one recent case out of the Fourth District Court of Appeal the mother filed an emergency motion for temporary sole custody and parental responsibility and for contempt against the father.  Ultimately the trial court denied her motion.  Since the court denied the motion the court found that the father was the prevailing party.  The court then went on to utilize Florida Statute §57.105(7) which provides for prevailing party attorney fees in cases of contract which have unilateral attorney fees provisions.

The application of this statute was an error in this case. The applicable clause in the contract, as is the case with most marital settlement agreements, provides the prevailing party attorney’s fees in the case of default by the other party.  This is not a unilateral provision as it applies equally to both parties.

The District Court of Appeal further found that simply because the court didn’t find the father in default did not mean that the mother was in default.  In this case, no one was in default, therefore no one was entitled prevailing party attorney’s fees.  Of course, both parties would be entitled to recover attorney’s fees under the standard provisions in Florida Statute §61.16.

See, Sacket v. Sacket, 38 Fla. L. Weekly D1358a (Fla. 4d DCA 2013).

Dustin Michael Butler is an Attorney with Martin Law Firm, P.L., whose practice focuses in Family Law and Civil Litigation.  He is admitted to practice law in the State of Florida and the Federal Court for the Middle District of Florida. He primarily practices in Lee County Florida in Cape Coral and Fort Myers, Florida.