Equitable distribution's impact upon an award of alimony: income producing assets
Florida law provides for an equitable distribution of the marital assets and liabilities. Generally, an asset or debt is marital if same was acquired/ incurred during the marriage with marital effort (or incurred for the benefit of the marital household) regardless of how the asset or debt is titled (individually or jointly). Section 61.075, Florida Statutes. Some assets are income producing such as rental real estate or investments. If a spouse (A ) is requesting alimony for As support, then the Court must take into consideration the income from any assets awarded to A as part of equitable distribution.
For example, the parties jointly own rental real estate during the Marriage. The mortgage payment, including escrow for taxes and insurance, is $ 1,500 per month. The property has been, and continues to be, rented out. The parties are receiving $ 2,000 per month in rent of which $ 1,500 is applied to the mortgage/ taxes and insurance. The parties have historically set aside an additional $ 200 per month towards repairs/ maintenance and improvement of the rental property leaving a net profit of $ 300 per month. A is awarded the rental property along with sole responsibility for any expenses associated with the rental including the mortgage, taxes and insurance. In determining As need for spousal support, the Court must factor the net $ 300 received by A each month from the rental property as part of As income. The same would hold true for any investments awarded to A such as brokerage accounts which generate returns of X amount each month. If A is awarded certain accounts generating returns of X each month, then X must be considered a part of As income when determining As need for alimony.
During trial, the parties are required to introduce competent evidence as to what constitutes the marital assets and debts as well as the valuation of same. In certain instances, an expert may need to testify as to what constitutes a marital portion of an asset and the value of same. For example, if B spouse owned a business prior to the Marriage which has goodwill at the date of marriage and produces income, then said Business has value as of the date of marriage. During the marriage, B continued to work the business (marital effort) and gross receipts were re-invested into the Business to not only operate the Business but to expand its client / customer base, region of operation, nature of doing business, etc. In this instance, a portion of the current value of the business is marital since the increase is due to marital effort. An expert will need to testify as to the value as of the date of marriage and the appreciation of value during the marriage as a result of marital effort. The appreciation is the marital asset not necessarily the Business itself.
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