One of the most important divorce tips for a couple planning to divorce or, as it is now termed, have a dissolution of their marriage is to find out how to separate their assets and debts. Essentially there will be two ways in which assets and debts will be separated. The first way is to separate marital assets and debts from nonmarital assets and debts. When that has been done, it will be time to separate marital assets and debts between the two parties. However, before going into detail regarding separation, it is necessary to explain several points relative to this topic:
- Asset: assets can range from physical property such as furniture, cars, jewelry, and electronic equipment to money in the bank, to a business, to real property, which is real estate. An asset is basically anything with a monetary value.
- Debt: a debt is money owed to another person, a credit card, a home, a business, or any number of other possible scenarios.
- Nonmarital assets and debts: these are assets and debts which were acquired before the marriage. Each party will be able to keep assets and is responsible for debts that were theirs alone before marriage.
- Marital assets and debts: these are assets and debts which were acquired after the marriage. Sometimes these will include assets and debts that were nonmarital until changes were made following the marriage. For example, a home or bank account owned before the marriage was owned by one party but, following the marriage, was put in both parties’ names.
- Equitable distribution: Florida is an equitable distribution state, not an equal distribution state. In other words, marital assets and debts will be divided fairly, not necessarily equally. For example, one party might keep the yacht while the other party gets to keep the summer cottage. For those less endowed, one party keeps the stereo equipment, the other party keeps the large wall TV, or one party keeps the stamp collection the other party keeps a valuable painting. In the area of debts, they are usually divided down the middle, but extenuating circumstances, such as the debt owed to a car company for a party’s vehicle, may be awarded to that party alone.
- Mediation or judge’s decision: in Florida, most jurisdictions require a couple going through divorce to attend mediation before a court date can be set for a final hearing where a judge will decide who gets what, both in assets and debts. If possible, a couple should be willing to compromise and settle their divorce issues during mediation. A marital agreement would be drawn up for both parties to sign, and after a judge looks over the document and agrees it is correct, a final judgment will be ordered. Not only does mediation cost a lot less in attorney and court fees and take less time than waiting months for a court date, but the couple also gets to decide for themselves how to separate their marital assets and debts. A judge won’t know the emotional importance of assets and debts, so all too often, awards are made that devastate a party. For example, a family pet will be awarded to the “wrong” party, or a credit card debt used mostly for one party will be awarded to the other party.
Separating marital assets and debts from nonmarital assets and debts is done by the couple before mediation and or a court hearing. All items of value and debts must be put into one category or the other. In particular, nonmarital assets and debts need to be proven that they belonged to a party before marriage. There must be solid proof, for example, bills of sale, receipts, sworn statements from someone who gave a gift such as an antique dresser, bank statements, or retirement funds, for the court to agree on nonmarital status. If there is no proof, an asset or debt can be ruled marital.
Separating marital assets and debts between the parties has already been addressed under the heading of equitable distribution and how this is done in the state of Florida, either in mediation or by the decision of a judge.
Hopefully, this divorce tip will help explain how to separate assets and debts in a Florida divorce. A Family Law attorney will have definite suggestions of how they want their clients to itemize and prove the marital and nonmarital status of assets and debts. It is a big task for most couples but one that must be done to complete a divorce in palm beach gardens Florida.
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