The Commingling of Nonmarital and Marital Funds: Untangling the Changing Character of Assets in Equitable Distribution

When a married couple combines their money, it can be complicated to figure out who gets what if they decide to divorce. In Florida, the law says that assets should be divided equally, but there are exceptions if one person can prove that the money used to buy something was theirs before the marriage. The court will also consider other factors, like how long the couple was married and how much each person contributed to the marriage. It’s important to get legal help to sort out these issues. Prior to 2008, Florida law said that if a married couple put their premarital home in both their names, it was assumed to be a gift to the marriage. In 2008, the law changed to say that this presumption also applies to other things like cars and furniture. To prove that it wasn’t a gift, you need really strong evidence that shows it wasn’t meant to be a gift. This makes it hard to keep things separate if you put your own money into something that’s in both your names. A new law was passed to fix a problem with joint property ownership. Before, it was hard to prove that property wasn’t a gift if it was owned jointly by a married couple. But now, the law makes it easier to prove. However, the new law only applies to certain types of joint ownership, so there may still be some confusion in some cases. Commingling is when it’s not clear whether an asset is part of a marriage or separate from it. The court has to decide this before figuring out how to divide the assets. There are three theories about how commingling affects the classification of assets. The strict transmutation approach says any commingling makes the entire asset part of the marriage. The tracing approach says if the nonmarital money can be traced, it stays separate. The intent approach looks at what the parties meant to do. Florida courts have different views on this issue. Most of them look at whether the money can be traced back to its original source or if it’s too mixed up to separate. It’s a complicated process and depends on the specific situation. Under this theory, when money from before marriage and during marriage is mixed together, all the money from before automatically becomes part of the marriage without considering anything else. This happened in a case where a husband had stocks before he got married, and then during the marriage, he used joint money to buy more stocks and put everything into a cash account. When he sold all the stocks and put the money into the cash account, the court said that the old stocks lost their special status and became part of the marriage. Before 2008, Florida courts usually believed that if one spouse put their own money into a joint account, they could still keep that money if they could prove it was theirs. But after some changes to the law, it’s harder to prove that. In a case called Steiner v. Steiner, the husband put money from his premarital properties into a joint account, and the court decided that the wife had a right to some of it because they used it for things like paying bills and mortgages. But the money he used to buy new properties and the marital home was still his own. This case shows when you can prove where your money came from in a joint account, and when you can’t. Florida law looks at whether a spouse intended to keep an inheritance as separate, nonmarital property, or if they shared it with their spouse during the marriage. If the inheritance was kept in a separate account and not mixed with other money, it’s likely to be considered nonmarital. The law changed in 2008, so there may be new ways of looking at this. The court looked at the wife’s actions and decided that she did not intend to give her husband a gift of $200,000. She had put the money in a joint account and then moved it back into her own account later. The court also said that the $25,000 she gave to her husband for living expenses was a loan, and she got the money back. The court believed the wife’s side of the story in the end. Simply using nonmarital funds to pay for shared expenses doesn’t automatically make the money a marital asset. Only the portion of the funds used for shared expenses loses its nonmarital status. The remaining money keeps its nonmarital status. If one spouse uses their nonmarital funds to buy a property and maintain it, the court will look at whether they intended to give a gift to the other spouse. If there’s proof of intent to gift, the property may be considered marital even if it’s only in one spouse’s name. In a divorce case, the court decides how to divide the assets between the spouses. They first figure out what belongs to each person, then decide what to do with the shared stuff. If it’s hard to tell who owns what, it can get complicated. The rules and assumptions in the law can have a big impact on the outcome of the case, especially if one person gave something to the other person before the divorce. This is a list of court cases and legal statutes related to property division in divorce cases in Florida. It discusses how money placed in joint accounts, gifts, and changes in ownership can affect the division of assets in a divorce. It also explains the burden of proof and how courts determine whether property should be considered marital or nonmarital. Susan W. Savard is a lawyer in Orlando who is really involved in the Family Law Section of The Florida Bar. She’s written articles and given talks about family law, and she’s really knowledgeable about it. She works at a law firm called West, Green & Associates, P.L. in Orlando. The Family Law Section is a part of The Florida Bar that focuses on family law, and this article was written on behalf of that section.

Source: https://www.floridabar.org/the-florida-bar-journal/the-commingling-of-nonmarital-and-marital-funds-untangling-the-changing-character-of-assets-in-equitable-distribution/