Going through the divorce process can be, and often is, a difficult time, both emotionally and, in many situations, financially. Divorcing spouses may be forced to deplete financial accounts or sell assets to pay for necessary things like living expenses and legal fees. When you do, the expenditure of those assets may impact the outcome of your case with regard to equitable distribution. In any equitable distribution outcome, your goals certainly include not being penalized for depleting assets for legitimate reasons. To make sure you get a genuinely fair equitable distribution, make certain you have the services of an experienced South Florida family law attorney on your side.
For an illustration of the rules regarding the dissipation of marital assets, there’s the very recent case of T.M. and H.M. from Palm Beach County. Each spouse petitioned for divorce in 2016 after nearly 25 years of marriage. The couple’s divorce case covered several important issues, including equitable distribution and child support. After the trial was over, the wife appealed. In her appeal, she objected to several decisions the trial court made regarding equitable distribution as well as the calculation of her income for child support calculation purposes.
The outcome of the appellate argument regarding the equitable distribution of the couple’s marital assets was particularly useful. In T.M. and H.M.’s case, the trial judge awarded the wife her checking account and her savings account. The documents in the divorce case identified the value of the savings account as $13,275 and the value of the checking account as $13,212.
So, what that meant, in a “real-world” sense, was that the court was asserting that the wife was getting the benefit of nearly $26,500 from those two accounts. The husband, in turn, got $26,487 in other marital assets in correspondence with the wife getting those two financial accounts. There was one not-so-small problem, however: by the time the divorce was finalized, the two accounts didn’t have $26,487 in them. They had $0.In fact, the wife had testified during the case that she spent $6,000 from those two accounts paying legal fees in the early portion of the litigation.
This meant that ascribing $26,487 of value to the wife for those two assets was an error that required a reversal of the trial court’s equitable distribution. The reduction of the two accounts’ balances from $26,487 to $0 is what’s called “dissipation of assets.” Florida law is clear that the dissipation of an asset can only be held against a spouse, in terms of crafting an equitable distribution of marital assets, if there is proof (and a finding by the court) that the dissipating spouse engaged in intentional misconduct.
In other words, if, for example, a wife had drained her checking and savings accounts and dumped all of that money into a savings account held by her new boyfriend’s LLC, then that would potentially amount to intentional misconduct. (However, the husband would still need to prove it and the court must make a finding before it could be held against the wife.)
Dissipating an asset for such matters as legal expenses (for litigating your divorce) or to pay living expenses during the pendency of the divorce is not intentional misconduct. In T.M.’s case, the only evidence before the courts was her testimony about paying her divorce counsel $6,000. There was no proof of any improper diminution or depletion of the checking or saving account funds. That meant that it was wrong to count that $26,487 sum “against” the wife in the equitable distribution.
Whether your case focuses on alimony, equitable distribution or another family law issue, the South Florida family law attorneys at Sandy T. Fox, P.A. are here to help. Our attorneys have been providing clients with the zealous representation they need to get them the results they deserve. Contact our attorneys online or by calling (800) 596-0579 to schedule your confidential consultation.
More blog posts:
Equitable Distribution and the Correct Date for Analyzing a Marital Estate in Florida, Fort Lauderdale Divorce Lawyer Blog, Feb. 27, 2018
The Impact of the Depletion or Diminution of Assets on Your Equitable Distribution in Florida, Fort Lauderdale Divorce Lawyer Blog, May 12, 2017