The Florida Supreme Court made a big decision in the Kaaa v. Kaaa case about how to divide property in a divorce. It’s a complicated issue that could have a big impact on many people. This article explains the history of the law and court cases on this issue, discusses the Supreme Court’s decision, and suggests a different solution that was proposed but not passed by the Legislature. The issue is whether a portion of the increase in value of a nonmarital property, which happened because the mortgage on the property was paid with money earned during the marriage, should be considered as marital property. According to Florida law, any increase in value of a nonmarital property that happened because of the efforts or money of the spouses during the marriage is considered as marital property. However, if the increase happened just because of general market trends, it is not considered as marital property. The courts have not yet made a clear decision about how to treat the increase in value of a nonmarital property in this specific situation. The Stevens case in Florida was the first to address how to divide property in a divorce when one spouse owns the property separately but marital funds were used to pay the mortgage. The court decided that the appreciated value of the property should be considered marital if marital funds were used to pay down the mortgage. However, this decision has been criticized for creating an unfair formula that could give one spouse too much of the property’s value. Another court suggested that each case should be looked at individually, considering factors like the length of the marriage and how much marital funds were used to improve the property. This is a simpler way to approach the issue and could lead to more fair decisions in divorce cases. Joseph and Katherine Kaaa got married and bought a house together. They used their joint money to make mortgage payments and do renovations on the house. After 28 years, the house was worth a lot more than when they bought it, and there was still money left on the mortgage. When they split up, the court said that Katherine was entitled to some of the increase in the value of the house, but not all of it. The court decided that the increase in the value of the house from the renovations was a joint asset, but the increase in value from just the passage of time was Joseph’s alone. In this case, the Florida Supreme Court disagreed with the Second Districtâs decision to not consider the passive appreciation of a marital home as a marital asset. The Court stated that if marital funds or efforts contributed to the appreciation of a nonmarital asset, it should be considered a marital asset. This means that the former wife should be entitled to a share of the passive appreciation of the marital home, not just the mortgage paydown and active enhancement. The Supreme Court agreed with a previous case, Stevens, that said if you use marital money to pay for a non-marital property, the increase in its value becomes a shared asset. But the Supreme Court in another part of their decision said that only the non-owner spouse’s contributions count. This is confusing and goes against the law. It’s also unfair because it can lead to situations where one party gets almost all the increase in value of the property even if they didn’t do much. There isn’t enough proof that Katherine Kaaa worked on building the carport herself. The Supreme Court said that both spouses have to contribute to increasing the value of property for it to be considered marital, but that goes against what the law says. You don’t need to actively increase the value for it to be considered marital. In simpler terms, the Court’s decision doesn’t match with what the law says. In some divorce cases in Florida, the value of the marital assets is determined at the date of the trial, rather than the date the divorce papers were filed. This can be important if the value of the assets has changed a lot during that time. It also means that any passive increase in the value of a property during the marriage is considered part of the marital property. This includes things like a retirement account that grew in value during the marriage. There was a problem called the Stevens problem, where it was unclear how to handle situations where the mortgage on a nonmarital property was paid off with marital funds and the property increased in value. There was a proposed law to fix this problem, but it didn’t pass. If it had passed, it would have helped to determine how much of the increased value of the property would be considered marital property. To figure out how much a married couple should each get from a house they bought during their marriage, we can use a formula. First, we look at how much of the mortgage was paid with money earned during the marriage compared to the total price of the house. Then we multiply that percentage by how much the house increased in value during the marriage. This gives us the amount that both spouses contributed to the increase in value of the house. We also add any extra increase in value that came from using money earned during the marriage. This gives us the total amount that both spouses should get from the increased value of the house. In Kaaa, the amount of money put into the mortgage during the marriage was $22,279 and the increase in value of the property due to efforts during the marriage was $14,400. The total value of the property due to marriage was $142,949. The nonmarital interest in the property, which is the part that isn’t related to the marriage, was calculated by adding the down payment of $2,000 and a part of the value increase not related to the marriage, which totaled $69,829. This formula was used to make a fair division of the value of the property between the marital and nonmarital parts. This calculation showed how much of the property value was related to the marriage and how much was not. In summary, the proposed formula would have been fair in determining how much each spouse contributed to the value of property during a marriage. The Supreme Court made a big decision on this issue, but it could still be improved. Some bills were proposed in 2012 to help with this issue, and further laws might make things more fair in the future. This is a summary of a legal case about how property should be divided in a divorce. The case discusses different formulas for dividing property, particularly when the property has a mortgage or appreciates in value during the marriage. The court also considers whether either spouse contributed to the increase in value of the property. Ultimately, the court decides how to divide the property fairly between the spouses. Perlmutter has been mentioned a lot in cases about passive appreciation. This means the increase in value of property without any effort from the owner. There have been several court cases where this issue has come up, and the decision usually depends on when the passive appreciation happened and whether it was paid for with marital funds. The exact language from the Florida House of Representatives talks about how to determine the portion of passive appreciation that should be considered marital property and subject to division in a divorce. A formula is used to figure out how much of a property’s value is considered “marital” and should be divided in a divorce. This formula looks at how much the property’s value has gone up, how much of the mortgage was paid off during the marriage, and any other increase in value. It’s used unless there’s a good reason not to. The person writing this is a family lawyer who knows a lot about this area of law.
Source: https://www.floridabar.org/the-florida-bar-journal/the-marital-share-of-passive-appreciation-of-nonmarital-property-deconstructing-kaaa-for-a-better-solution/
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