It is not uncommon for either or both spouses to enter the marriage owning separate premarital property.
What happens with that premarital property during their marriages varies widely from couple to couple.
As to one couple, the titleholding spouse may keep the title separate, pay any loans or expenses for the property from a separate account funded with separate premarital funds and keep any income generated by the property in a separate account for entirely nonmarital use.
As to another couple, at the other end of the spectrum, things may be more complicated. Maybe the other spouse contributed toward expenses of the premarital property. Or perhaps they contributed time, energy and skill to make improvements to the premarital property.
In either case, the question must be asked: has the premarital property actually increased in value over the course of the marriage?
Possible considerations. If so, how and why? General appreciation of the market? Specific improvements made to the property? Who did the work? How was it paid for?
These are examples of the kinds of situations and questions that have made addressing separate premarital property quite complex in the event the couple later divorces in Florida.
Up until 2010, Florida case law was all over the ballpark and tended to vary from one region (technically known as a judicial “district”) of the state to another, making outcomes in family court often unpredictable and inconsistent across Florida.
But the treatment of premarital property in divorce court was finally settled in an important Florida Supreme Court decision in 2010, and now the law is uniform throughout the state of Florida.
Passive, market-driven appreciation during the marriage of separate premarital property in Florida is now considered marital property that should be divided between spouses in a divorce.
It is key to recognize that this new rule applies only to the appreciation of the premarital property, not to the entire value of the property as a whole. At least one spouse often glosses over this significant distinction.
And for anyone potentially impacted by this – or any other – dramatic change in the law, another takeaway lesson is that it is important never to lose sight of all of the particular facts and circumstances of your case.
As an example, I recently tried a case in which my client had purchased the marital home prior to the marriage, but had paid the mortgage with his salary earned during the marriage. Legally, considered marital funds.
Not surprisingly, the opposing party claimed an interest in the marital home. Half of the entire value of it. And my client’s goal was to defeat his spouse’s claim to any part of the home.
At first blush, my client’s goal might have seemed unattainable in light of the Florida Supreme Court case discussed here. That was certainly our family court’s initial take on the situation at trial.
But my client’s divorce court case had been filed by his spouse prior to rendering of this new divorce law ruling. When the family law in our particular district in Florida, the fourth district, still favored my client’s position.
So, I argued at trial in family court that the new Florida Supreme Court decision entered after my client’s case was filed should not apply to my client’s case.
And, after hearing my argument, the trial court in family court agreed with me.
And my client got to retain the full value of their marital home as his separate premarital property.