New Florida Supreme Court Ruling Affects Marital Assets in a Divorce

POSTED ON JUNE 16, 2011 BY CHARLES

The Florida Supreme Court has recently issued an opinion in Kaaa v. Kaaa, 58 So. 3d. (Fla. 2010) which provides that the passive appreciation of nonmarital residential real property is a marital asset.  Passive appreciation is appreciation which occurs simply because of market forces instead of the efforts of either party or the expenditure of marital funds.  For example, if a home appreciates in value druing the ten years of a marriage from $100,000 to $200,000 simply as a result of passive appreciation, all of that appreciation would be marital and each spouse would be entitled to $50,000 of the appreciation.  This would be the result even if the home had been purchased before the marriage by one of the spouses and had been kept in that spouses name all through the marriage.  While this opinion seems rather innoucuous and even fair where a home is brought into the marriage with some equity, given the current state of the real estate market where approximately 43% of all residences have a value less than the outstanding mortgage indebtedness, the application of this ruling to those "underwater" residences is going to lead to some incredibly inequitable results.

Posted in Articles | Tagged: Marital & Family, Real Estate