Posted by Nydia Streets of Streets Law in Florida Divorce
Can a spouse’s separate property become marital or jointly-owned property during the marriage? Florida law recognizes a concept known as donative intent which means a spouse shows intent to gift separate property to the other spouse. This was an issue in the case Bernstein v. Bernstein, 4D21-2480 (Fla. 4th DCA April 19, 2023).
As part of equitable distribution in the parties’ divorce case, the trial court classified as marital a home purchased before the marriage (and titled always in the name of the former husband and his mother). The former husband argued that the increase in value of the property during the marriage was due to passive appreciation. The former wife argued it was due to active appreciation and pointed to her efforts to maintain and improve the home, including fixing the roof herself, and using $75,000 of a payout from her personal injury case to renovate the home. The former husband also listed the former wife on renovation permits for the property. The court found there was donative intent and that even if there was not, the non-marital nature of the property was lost due to the “action and inaction” of the parties. The court recognized the former husband’s pre-marital contribution to the home by awarding him $445,000 which was the purchase price for the home. The court also distributed a Corvette which the former husband traded in for over $15,000 in cash. $9,000 of this amount was awarded to the former husband without explanation from the trial court. The former husband appealed.
As to the marital home, the appellate court found the trial court reached the correct conclusion under incorrect analysis. The court held “no evidence supports a finding that Former Husband had donative intent regarding the home’s pre-marriage value. ‘[I]mprovements or expenditures of marital funds to a nonmarital asset does not transform the entire asset into a marital asset; rather, it is only the ‘enhancement in value and appreciation’ which becomes a marital asset.’” Martin v. Martin, 923 So. 2d 1236, 1238–39 (Fla. 1st DCA 2006) [internal citations omitted]. To the extent that the trial court found otherwise, such a determination was neutralized by the trial court providing Former Husband with a ‘credit’ for the $445,000 which he had paid for the property.”
As to the Corvette, the court held “We agree with Former Husband that the trial court erred when it awarded Former Wife more than fifty percent of the $15,150 which Former Husband received for the trade-in of his Corvette. The trial court erred when it awarded Former Wife a $9,000 credit, rather than fifty percent of $15,150 ($7,575). On remand, the trial court shall award each party an equal split of the Corvette’s trade-in proceeds.”
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