How Are Assets Split in a Florida Divorce?

Documentation

Create a spreadsheet --- whether written or by using a spreadsheet program --- that lists all the assets that belong to both parties. Include non-marital assets --- assets that belong only to one of the parties. These usually include assets given to one party prior to the marriage, as long as marital funds were not used to increase the value of the asset. Another example of a non-marital asset is, in most cases, assets that are willed to one of the parties from a family member. Below the assets, write down the liabilities, including credit card balances. If a liability is attached to an asset, such as a mortgage, do not write it down separately.

In the first column after the name of the asset, write the value of the item. In the next column, write what is owed on that asset. When you get to the liabilities, the first column is blank --- you just have an amount owed. Subtract the number in the second column from the number in the first column to get the value of the third column --- this is the equity in the asset. This is the number that will be used to find equitable distribution for the asset split. The liabilities will have a negative number.

The decision process is the difficult part. You must decide who will get the marital home, if you own a home. If you have minor children, normally the parent with custody keeps the marital home, if that parent can afford the payments and upkeep on the home. Alimony figures in here, because alimony is considered income for tax and equitable distribution purposes. Make two more columns --- one labeled "Husband" and the other labeled "Wife." Move the equity from the third column to the column for the spouse keeping the house. This is likely the biggest asset and dictates how the rest of the assets are divided. Move the rest of the assets over to the Husband or Wife column so that the positive numbers are as close to equal as possible for each spouse. If one or more assets are non-marital, move those assets into the appropriate column. If a home is willed to a spouse, the other should receive the marital home.

Retirement accounts are treated in the same manner, but certain types of accounts require a qualified domestic relations order, often referred to as a QDRO, to transfer them. Fees are associated with having a QDRO drafted and implemented. Some accounts also charge fees for early cash-outs, even in a divorce situation. Tax implications must also be taken into consideration.

If you have a retirement account that needs to be moved from your column to your spouse's column that doesn't require you to pay fees, it is better to transfer that account. Even a savings account could be transferred in place of a retirement account, to keep costs down.

Transfer the liabilities to the columns for the husband and wife, keeping the total as equal as possible. If credit cards are in individual names, keep those in their respective columns, so you don't have to cut the credit cards off or go through the hassle of changing the names on the accounts.

If there are certain assets and liabilities that "must" go to a specific spouse, this may skew the numbers. You can figure an equalizing payment. Subtract the final totals, then divide the result by 2 to get the equalizing payment. The spouse with more assets pays the other spouse the equalizing payment.

Once you have the assets and liabilities broken down to 50/50 division, you must now equalize the division. If both parties make close to the same salary, no further action is needed. If one spouse makes 60 percent more than the other, the spouse making less needs to realize an extra 20 percent (60 percent minus 40 percent divided by 2). This can be transferred by moving an asset worth 20 percent of the total of the higher-earning spouse's column, or it can be made in an equalizing payment of cash. Don't forget that alimony, which works as an equalizing payment must be figured. The amount the receiver gets should be added to his income before making any equalizing calculations.

It is always better if the parties can equitably divide their assets and liabilities. If the court does it, it will use Florida Statutes 61.075, the equitable distribution statute, and while fair, you may not like the outcome, as you may not get a specific asset you wanted.