Posted by Nydia Streets of Streets Law in Florida Divorce
The enhancement in value of non-marital property during a marriage may be a marital asset subject to equitable distribution in a Florida divorce. How do we determine if the increase in value of property is marital or non-marital? This was an issue in the case Strickland v. Strickland, 1D21-3894 (Fla. 1st DCA October 11, 2023).
In this divorce case, the former husband owned a dental practice. The dental practice leased space in a building which was owned by a company also owned by the former husband. The trial court classified both the dental practice and the property company as non-marital assets belonging to the former husband. The former wife attempted to prove at trial that the dental practice appreciated in value during the marriage but this was rejected by the trial court. However, her argument that the property company appreciated in value during the marriage was accepted by the trial court on the basis that the mortgage on the building had been paid down by marital funds. The former husband appealed this issue.
The appellate court reversed, holding “The only source of income of Biggs & Strickland is the rental income it receives from Spanish Trail Dentistry. This results from a lease agreement signed between the two companies in which Spanish Trail Dentistry pays a set amount of money to Biggs & Strickland to rent the space used for the dental practice. Biggs & Strickland then uses that money to pay down the mortgage. At no point does the money cross over into Former Husband’s hands personally. The money went directly from Spanish Trail Dentistry to Biggs & Strickland. Both are nonmarital assets, making the money nonmarital. And the rent payments were an essential expense of the nonmarital business. While a party cannot hide the results of marital efforts in a nonmarital company to avoid their classification as marital property, there was no evidence that Former Husband stored, or comingled, marital assets in his companies.”
Schedule your meeting with a Miami family law attorney to determine how the law may apply to your case.