In March, Florida Lawmakers passed HB 639, a measure that established a
statutory formula for calculating the marital share of passive appreciation
of non-marital assets subject to property division. Prior to this measure
being approved, Florida courts relied on case law to aide them in determining
the marital portion of an asset’s passive appreciation for distribution.
HB 639 is important to
property division, which can be one of the most complex and contested aspects of a
divorce. Under Florida law, property subject to equitable division during divorce
is known as marital property, and it includes assets and debts acquired
during marriage, or with marital funds or labor. Non-marital property,
which is not subject to division, can include assets and debts acquired
before marriage, or through gifts or inheritance. Although certain assets
may be purchased using non-marital funds before a marriage – such
as a home – appreciation of that asset can be divisible marital
property if it was paid for during marriage with marital funds.
On July 1, when HB 639 takes effect, Florida courts will now use an established
statutory formula (written into law) when calculating the marital shares
of assets that appreciate in value,
including a home one spouse purchased before marriage, but which was paid
for with marital funds during the marriage. The bill uses a similar method as what was used in case law – dividing
the amount of mortgage at the time of marriage by the asset’s fair
market value (FMV) and multiplying that number by the value of passive
appreciation during the marriage. However, the bill calls for using the
amount of principal paid on the mortgage rather than the entire amount
of the mortgage. It also creates a cap on the marital share’s appreciation
value, and provides spouses with opportunity to argue if the use of the
statutory formula would be inappropriate under given circumstances.
Because homes are often the largest asset owned or shared by spouses, characterizing
them as marital or non-marital property, accurately appraising them, and
calculating any appreciation is critical to ensuring spouses are entitled
to their fair share. This is especially true when values of homes –
even those purchased by one spouse before marriage – are increased
through the combined efforts or contributions of both spouses, particularly
when they contribute funds to pay the mortgage, and potentially when they
perform or pay for updates and renovations.
Florida courts recognize that spouses who do financially contribute to
paying a home’s mortgage have rights and interests to that property.
Though it may be more disproportionate when compared to what spouses who
purchase a home together may equally share when they divorce, it can still
be a significant sum, especially when homes passively appreciate over
a number of years.
Although there are laws like HB 639 in place to govern the rights of spouses
in divorce, protecting those rights and your marital share of assets demands
the support of proven and experienced
family law attorneys like those at Owenby Law, P.A. Our award-winning Jacksonville
divorce attorneys have helped thousands of clients throughout Florida
navigate their divorce proceedings, as well as issues involving property
division and marital and non-marital homes.
If you have questions about dividing your home in divorce, or how the new
bill may impact your divorce case,
contact us for an initial consultation.