After decades of fighting for the right to enter into the state of matrimony, the LGBT community is celebrating the extraordinary success of finally attaining marriage equality for same-sex couples in the state of Florida. This development brings equality to couples in all respects, meaning that divorce laws and procedures are now universal regardless of who weds whom. Therefore, same-sex couples need to understand the potential pitfalls of marriages that end in divorce so that both parties are able to protect their rights and property. While this is a general outline of marital rights, the law has numerous exceptions, so the consultation of a matrimonial lawyer is essential for understanding the impact of marriage on a couple. Below is a list of the pitfalls of divorce same-sex couples should consider before marriage:
1) Marital Property
Upon marriage, the law states that all assets and liabilities acquired or incurred during the marriage become marital property, regardless of how they are titled. In the event of a divorce, each spouse is presumptively entitled to one-half of all marital assets and liabilities. Furthermore, all income earned by either party during the marriage and any assets acquired with earnings are considered marital property. What does this mean? Cars, houses, furniture, companies, stocks, bonds, or anything else obtained while married is subject to being equally owned even if the asset is solely titled in the name of only one spouse. If one person is a spender, this also means that all liabilities or debts incurred during the marriage become the joint obligation of both spouses. The phrase “what’s mine is yours” couldn’t be more true than in this context.
2) Non–Marital Property
Property owned prior to the marriage, which is kept in one party’s individual name during the marriage, or property which is inherited by or gifted to one of the parties during the marriage, can remain that individual’s non-marital property and therefore would not be subject to division. Non-marital property must be maintained in individual names and never titled in joint names.
3) Comingling of Assets
What if the spouses keep their pre-marital financial accounts in individual names during the marriage? Does it remain separate property? It depends. Because income earned during the marriage is marital, often times marital and non-marital property are inadvertently comingled. If one spouse deposits earnings, bonuses, or other distributions into one of his or her non-marital accounts, the entire account can be transformed into a marital asset. Over time, the funds become so comingled that there is no way to determine which dollar was earned before or after the marriage began. For instance, one spouse had a non-marital savings account with $25,000 and continues to deposit earnings into the account after tying the knot. Five years later, there is $50,000 in the account, but sadly the couple decides to divorce. So what happens to the money? The entire $50,000 could be deemed marital property and divided in a divorce proceeding. Comingling can occur in all financial accounts regardless of the title or name on the account.
4) Appreciation of Non-Marital Property
If any marital efforts or money are spent on improving non-marital property during the marriage, which results in an appreciation of that particular asset, the appreciation becomes marital property. For example, one spouse owns a residence where the couple will live together once they are married. If either party uses marital money or effort to improve the home while married, then the increase in value of the residence can be deemed a marital asset. In the same respect, if one spouse is an active trader of stock and the earnings of a non-marital brokerage account substantially increase, then that increase can also be considered a marital asset. Business owners are similarly affected by this standard. If a spouse owns a business, or part of one, prior to getting married and he or she continues to work with that business throughout the marriage, the appreciation in value of the business as a result of the martial effort will be subject to division in the event of a divorce.
What if one spouse quits working to care for a family and maintain a home? The law now provides for various types of alimony based on years of marriage. The amount is dependent upon the needs of the non-working spouse after the divorce. Although the alimony statute is currently under legislative review, the working spouse could still be ordered to pay support to the non-working spouse after a divorce.
Despite the potential pitfalls of divorce, marriage undoubtedly has many benefits. To ensure that both parties understand the financial changes that occur as a result of marriage, it is wise for couples to meet with a matrimonial lawyer to understand all legal aspects of marriage and to avoid financial repercussions that were never intended or considered at the inception of the marriage. If the parties want to change the statutory impact of marriage, they can enter into a pre-nuptial agreement or post-nuptial agreement and specify exactly how they will handle finances and support in the event of a divorce. These considerations aside, congratulations to the LGBT community on this major achievement!
Roberta G. Stanley is a partner with the South Florida law firm of Brinkley Morgan. Certified by the Florida Bar as a specialist in marital and family law since 1995, Ms. Stanley is a Fellow of the American Academy of Matrimonial Lawyers. Her focus areas include pre-nuptial and post-nuptial agreements, same-sex marriage, dissolution of marriage, equitable distribution, business valuation, alimony, child support, parental responsibility and timesharing, attorneys’ fees and qualified domestic relations orders. Ms. Stanley can be reached at 954.522.2200 or Roberta.Stanley@BrinkleyMorgan.com.
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