Posted by Nydia Streets of Streets Law in Florida Divorce

Property acquired before marriage in Florida is generally considered separate property. During the marriage, a party may unknowingly take steps which give a non-owning spouse interest in the party’s separate property. In the case Nathey v. Nathey, 2D19-441 (Fla. 2d DCA February 26, 2020), the issue of non-marital property was appealed after the parties’ divorce.

The evidence showed the former husband built a home prior to the parties’ marriage. He kept title in his name only and the mortgage on the home was in his name alone. During the marriage, the mortgage was satisfied with marital funds and the parties used it as their primary residence. Thereafter, a line of credit was taken out on the home which remained outstanding at the time of the parties’ divorce. The trial court characterized the home as marital and awarded the former wife $100,000.00 as her share of equity in the home. The former husband appealed on the grounds that this home was his separate property and should not have been characterized as marital.

The appellate court agreed with the former husband, reversing the trial court’s order with a mandate that the home be characterized as the former husband’s separate, non-marital property. Further, the court held, “That, however, is not the end of the matter. Section 61.075(6)(a)(1)(b) defines ‘marital assets’ to include ‘[t]he enhancement in value and appreciation of nonmarital assets resulting either from the efforts of either party during the marriage or from the contribution to or expenditure thereon of marital funds or other forms of marital assets.’ Thus, ‘an increase in equity due to the use of marital funds to pay down a mortgage balance is a marital asset subject to equitable distribution.’ [. . . ] Here, the mortgage on the home and home equity line of credit were both paid down by marital funds. Accordingly, any increase in the property's equity due to these payments is a marital asset subject to equitable distribution. Therefore, on remand, the circuit court shall calculate the amount by which marital funds reduced the indebtedness on the home and equitably distribute to [the former wife] her share of that amount.”

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