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Portion Of Pension Plan Earned During The Marriage Should Have Been Subject To Equitable Distribution

March 8, 2016 by  
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Usually the portion of a pension plan earned during a marriage should be subject to equitable distribution.

In Coleman v. Bland the Fifth District Court of Appeals for the State of Florida opined that the trial court erred in ruling that the value of the marital portion of the former husband’s pension plan was de minimis and therefore did not include it in equitable distribution.  The Fifth Court of Appeals opined that the marital portion of the pension should have been subject to equitable distribution and that the amount in question was not de minimus to the Former Wife.

The Court stated in pertinent part:

Arvita M. Coleman, the former wife, appeals the trial court’s order entered on September 22, 2014, upon remand from this court. Determining that the trial court erred in ruling that the value of the marital portion of the former husband’s pension plan was de minimis, we reverse.

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Michael Bland, the former husband, worked for the Yonkers School Board of Education for approximately 31 years. After 49 weeks of marriage to the former wife, the former husband retired from this position. After a 39-month marriage, the former husband filed a petition seeking dissolution of the parties’ marriage. The trial court dissolved the parties’ marriage and equitably distributed the marital property. The former wife appealed. We affirmed the dissolution judgment, in all respects except one. We held:

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Arvita M. Coleman [“Former Wife”] appeals the final judgment dissolving her marriage to Michael Bland [“Former Husband”]. We find no reversible error in any of the issues raised on appeal, save one. Among the issues in dispute between these parties was the question whether any part of Former Husband’s pension was a marital asset. The trial court made no finding in the final judgment concerning whether this asset was marital or non-marital, as required by section 61.075(3), Florida Statutes (2009).
Former Wife contends on appeal that the lack of findings constitutes reversible error as to this and other assets; however, as to all except the pension, we find, after our review of the record, that any error was harmless. We are unable to make an adequate review of the pension issue without findings, however. The record seems to show that some portion of the pension, although small, was earned during the marriage and should be classified as a marital asset. We therefore reverse as to that issue only and remand for the trial court to hear and to make proper findings on the disposition of the Former Husband’s pension.
Coleman v. Bland, 73 So. 3d 795, 795-96 (Fla. 5th DCA 2011).

On remand, the trial court conducted a hearing which addressed the former husband’s pension. The trial court applied the following methodology to determine the marital portion of the pension:
31 years times 52 weeks . . . [equals] 1,612 weeks of which 49 were during the marriage. So . . . 49 divided by one – [1]612 is three percent which would be the marital portion and divided in half would equal 1.5 percent. [1.5% multiplied by $5,900 [the amount received monthly] equals $88.50]. But three percent is the marital portion.

At the close of the hearing, the trial court stated:
The Court finds that given all of the circumstances of the case including the fact that the wife received a car which was purchased with the husband’s non-marital funds and was supported for three years, in fact almost longer than the term of the marriage, in the home after the filing of the petition as well as other items that the d[e] minimus amount of the retirement account that would be marital, that it is a d[e] minimus amount and that the Court will find that at this time it’s not an equitable distribution given all the circumstances particularly those presented today concerning the support provided by the husband for three years following the filing of the petition and is sufficient that the Court will find that the amount of the marital portion of the husband’s retirement should remain his sole — to be his sole property.

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In a written order, the trial court awarded the former wife no portion of the former husband’s pension. The former wife appeals.
“The standard of review of a trial court’s determination of equitable distribution is abuse of discretion. Distribution of marital assets and liabilities must be supported by factual findings in the judgment or order based on competent substantial evidence.” Bardowell v. Bardowell, 975 So. 2d 628, 629 (Fla. 4th DCA 2008)(citations omitted) (internal quotation marks omitted). Also, “the trial court’s valuation and distribution of the marital assets” is reviewed for abuse of discretion. Claughton v. Claughton, 625 So. 2d 853, 855 (Fla. 3d DCA 1993).

The former wife contends that the trial court erred in its deminimis valuation, arguing that:
the transcript reveals that the trial court’s calculation of [her] share was $89.67 per month based on [the former husband’s] receiving $5,900 per month in pension times 1.5%. The $89.67 might be de minimis to [the former husband]; however, it is clearly not de minimis to [her] as it would increase her $331 per month income by 27.1%.

We agree.

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In Bardowell, the court observed:
At trial, the wife submitted evidence of a “retirement forecast” document prepared by the FRS, which stated that, as of December 2004, the husband’s current FRS balance was worth $17,438. The document noted that the current FRS balance “is the present value of your accrued FRS benefit given current years of service.” The FRS documentation provided competent evidence that the present value of the husband’s FRS pension was approximately $17,438 as of December 2004. This is not a nominal value. While the trial court would have been within its discretion to value the pension at an amount lower than $17,438 to account for the fact that the pension was not yet vested, the trial court was not free to ascribe a nominal value to the FRS pension. The trial court’s decision to assign a nominal value to the FRS pension was not reasonable or equitable.
475 So. 2d at 629-30. See also Locke v. Locke, 832 So. 2d 971, 972 (Fla. 2d DCA 2002) (“We find that a difference of several thousand dollars should not have been dismissed [as de minimis] without a more precise inquiry.”).

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Here, as in Bardowell, some portion of the pension was earned during the course of the parties’ marriage. Over the course of ten years, the pay out of the marital portion of this pension would be roughly $21,600. Thus, the trial court erred when it determined that the marital portion of the pension was of de minimis value.
Accordingly, we reverse the order entered on September 22, 2014, and remand for the trial court to reconsider the proper disposition of the marital portion of the pension.

Increase In Value Of Premarital Stock In Husband’s Employer Can Be Marital or Non-marital

February 17, 2016 by  
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In Witt-Bahls v. Bahls the Fourth District Court of Appeals for the State of Florida considered whether the increase on the value of stock purchased by the Husband prior to the marriage in his employer should be considered marital or premarital.  The Court ruled that the facts of the case before it did not warrant the appreciation in the value of the stock being considered a marital asset because the appreciation in the value of the stock was not due to the Husband’s active effort.

“Marital assets are subject to distribution between the formerly married parties. §61.075(1), Fla. Stat. (2015).  Marital assets include “[t]he enhancement in value and appreciation of nonmarital assets resulting either from the efforts of either party during the marriage or from the contribution to or expenditure thereon of marital funds or other forms of marital assets, or both.” Id. § 61.705(6)(a)1.b.

The enhanced value of stock from a company for which the owning spouse works can be considered a marital asset and be subject to equitable distribution. See, e.g., Pagano v. Pagano, 665 So. 2d 370, 372 (Fla. 4th DCA 1996). However, it can also be a nonmarital asset if marital effort or assets are not used in so enhancing its value. See, e.g., Oxley v. Oxley, 695 So. 2d 364, 367-68 (Fla. 4th DCA 1997). The question raised in this appeal is whether the husband exerted the sort of “effort” required to move the appreciation value from the nonmarital category to the marital one.

The details of our prior case law make the answer to that question quickly apparent. In Robbie v. Robbie, 654 So. 2d 616 (Fla. 4th DCA 1995), we held that the appreciation of stock owned by the general manager of the Miami Dolphins – a business enterprise run largely by the husband’s family-was a marital asset. Id. at 617.  Similarly, in Pagano, we held the same with regards to the appreciation of stock owned by the president and operations manager of a family wholesale plumbing supply business. Pagano, 665 So. 2d at 371-72. In Minton v. Minton, 698 So. 2d 936 (Fla. 4th DCA 1997), we again held that the appreciation of stock from a family-owned business for which the husband was chief operating officer of two subsidiaries and vice president of two others was a marital asset. Id. at 369-97.  The pattern here is clear.

The case at bar demonstrates neither of the key features in the cases described.  Kiewit is not a business enterprise owned or run by the husband’s family. Nor was the husband in a position of significant authority in the company. Although he had some supervisory responsibility, the most reasonable description of his position would seem to be “middle manager”.

As was the case in Oxley, we today avoid a holding that “would effectively make all spouses partners in the increased value of all nonmarital assets that does not result from passive appreciation.” Oxley, 695 So. 2d at 368. Instead, we hold that, because the wife failed to establish that the husband occupied a significant management role in Kiewit, the appreciation of the Kiewit stock was not due to active effort and is therefore not a marital asset.”

If you need to talk to an attorney about your divorce, equitable distribution, and what the law may consider marital or non-marital please contact us to arrange a consultation.

Exclusive Use And Possession Of Marital Home With Sale In 18 Months Remanded For Lack Of Detail As To Carrying Costs, Sale Procedure ETC.

February 2, 2016 by  
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In Jones v. Jones, the trial court awarded exclusive use and possession of the marital home and ordered for it to be sold within 18 months.
The Fifth District court of Appeals for the State of Florida remanded the case to the trial court ruling that the trial court’s final judgment should have specifically addressed each party’s financial responsibilities during the period of exclusive use and possession prior to sale of the marital home and the consequences should Former Wife fail to sell or refinance the home within the allotted time frame.  While a trial court has considerable latitude to provide for exclusive possession and the sale of a property its judgment should be specific as to the carrying costs, sale procedure, and consequences should the sale not occur.
If you want to talk to a lawyer about equitable distribution, exclusive use and possession of a home, or the sale of a home as part of a divorce please contact us to schedule a consultation.

In A Divorce The Court Must Address Whether Assets Are Marital or Nonmarital For Equitable Distribution Purposes

December 22, 2015 by  
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In Goldman v. Goldman, The Fifth District Court of Appeals for the State of Florida ruled that it was error for the trial court not to have designate whether the wife’s checking account and certificate of deposit, both of which were in wife’s name, were marital or nonmarital property for the purposes of equitable distribution.  The wife had argued that the assets were nonmarital while the husband had argued that they were marital.

In its final judgment, the trial court stated that “[e]ach party shall be entitled to the sole and exclusive use and possession of the checking/savings, money market, CD and cash accounts in their respective names.”
 
However the Fifth District Court of Appeals found that this was not enough.  “Under the equitable distribution statute, the court must categorize the parties’ assets as nonmarital and marital.” Knecht v. Knecht, 629 So. 2d 883, 886 (Fla. 3d DCA1993) (citing § 61.075(1), Fla. Stat. (1991); Robertson v. Robertson, 593 So. 2d 491, 493 (Fla. 1991)). Because the record was not clear whether the trial court determined that these two assets were the wife’s nonmarital property, or instead, made an unequal distribution of marital assets, the decision was reversed for the trial court to provide clarification.

 

When Should Brokerage Accounts Funded With Inherited Money Be Considered Marital Assets And Subject To Equitable Distribution?

October 20, 2015 by  
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In a Divorce case the court determines what assets and liabilities are marital and which are not and equitably divides the marital assets and liabilities.  The Third District Court of Appeals just entered an opinion in the case of Gromet v. Jensen reversing the trial court for its decision to consider three brokerage accounts funded with inherited money to be marital and subject to equitable distribution. 

Of the three brokerage accounts, one  had been established prior to the marriage and the two others that had been established during the marriage.  All three had been funded  by the Husband with money inherited from his mother.  Inherited money usually starts of as being non-marital. 

The Wife claimed that the brokerage accounts were marital because the Husband had deposited about $1,100 from the dissolution of a marital business into a brokerage account and because the Husband had expended marital efforts and labor in his management of the accounts such that any enhancement in value should be considered marital.

The Husband claimed that while he had managed the accounts during the marriage they had actually decreased in value because of trading losses and the use of funds to maintain the marital household.  The Husband also testified that the had not deposited the $1,100 from the marital business into any of the three brokerage accounts having deposited it into a separate bank account.

The Third District Court of Appeals considered the testimony, evidence, and law in detail coming to the conclusion that the three brokerage accounts were not marital on the record before it.  It reasoned that the Wife had not specified which brokerage account the $1,100 had been deposited into and did not have specific knowledge regarding the accounts such that the evidence before it was insufficient to find commingling had occurred based upon the vagueness of the Wife’s testimony and evidence concerning the deposit.

The Court then considered the Wife’s enhancement in value argument.  The Court reasoned that while the Husband had actively managed the accounts during the marriage the Wife had failed to meet her burden to show an enhancement in their value had resulted from it, and that the evidence of record actually supported that they had decreased in value. Accordingly, the Wife was not entitled to any portion of the three accounts.

This case shows the importance of properly preparing for trial and presenting the right evidence to the trial court.  Had a different record been established at trial through documents or testimony the outcome may have been completely different.  For instance a bank record showing the deposit of the $1,100 into the initial brokerage account which was then used to fund the other two may have affected the court’s consideration of whether the accounts had become marital through commingling.

If you need to talk to a lawyer or attorney about your divorce, the division of assets and liabilities, the classification of marital and non-marital property, valuation under the law,  and presenting the legal arguments and evidence to the court to support your position, contact our office to arrange a consultation on (786)539-4935

 

 

A Divorce Judgment Needs To Contain Specific Findings In Support Of Equitable Distribution

September 30, 2015 by  
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In Matteston v. Matteson, the First District Court of Appeals ruled that the Divorce Judgment before it did not contain sufficient findings to support the distribution of personal property, bank accounts, or tax refunds, and did not have attached the items that were meant to have been attached according to the Judgment to support the division of assets set forth in it.  A trial court needs to make specific findings in support of an equitable distribution award so that an appellate court can meaningfully review it.  Failure for a trial court to do so can constitute reversible error.

If you need to talk to a lawyer or attorney about your divorce, the division of assets and liabilities, the classification of marital and non-marital property, its valuation under the law, the dissipation of assets,  and presenting the legal arguments and evidence to the court, contact our office to arrange a consultation on (786)539-4935

Court Should Not Have Made An Unequal Equitable Distribution Of Marital Assets Based On The Husband’s Superior Ability To Earn Income Without Considering Other Factors

September 4, 2015 by  
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In Kyriakou v. Kyriakou, the Second District Court of Appeals held that the trial court should not have made an unequal equitable distribution of marital assets based on the Husband’s superior ability to earn income alone and without considering the other factors listed in the statute as disparate earning capacity alone should not form the sole basis for an unequal equitable distribution.  

The Appellate Court also took issue with the lack of findings on the record to support the categorization and valuation of the parties assets and made clear that if a judgment is being based on the dissipation of marital assets there must be evidence of it and specific findings of misconduct.

If you need to talk to a lawyer or attorney about your divorce, the division of assets and liabilities, the classification of marital and non-marital property, its valuation under the law, the dissipation of assets, misconduct, and presenting the legal arguments and evidence to the court, contact our office to arrange a consultation on (786)539-4935

 

Court Should Not Have Classified A Business Established During The Marriage As Non-Marital

September 4, 2015 by  
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In Niekamp v. Niekamp, the Second District Court of Appeals held that the Wife’s music studio business which was established during the marriage should not have been classified as a non-marital asset.  Instead, it should have been classified as a marital asset and valued for the purposes of equitable distribution excluding the goodwill due to the involvement of the Wife in the business.

For equitable distribution purposes in a divorce, assets and liabilities need to be classified as marital or non-marital, valued appropriately under the law based on evidence presented and divided accordingly.  It is important to understand the applicable law regarding classification and valuation and present the right evidence if the correct result is to be obtained.

If you need to talk to a lawyer or attorney about your divorce, the division of assets and liabilities, the classification of marital and non-marital property and its valuation under the law contact our office to arrange a consultation on (786)539-4935

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