Posted by Nydia Streets of Streets Law in Florida Divorce
A home that is owned by one spouse prior to marriage is that spouse’s separate, non-marital property. But if a mortgage was paid on the home during the marriage with marital funds, the non-owning spouse is likely owed a credit in equitable distribution for the payment of those funds. This was an issue in the case Kerrigan v. Page, 2D2023-2186 (Fla. 2d DCA December 27, 2024).
The former husband owned real property prior to the marriage. During the marriage, the parties obtained a loan secured by a mortgage on the real property. Evidence submitted at trial on a divorce petition indicated that over $300,000 was paid during the marriage toward the mortgage. The trial court entered a final judgment which did not equitably distribute the marital portion of the payments toward the mortgage. The former wife appealed.
The appellate court reversed on this issue, holding “Under section 61.075(6)(a)(1)(c), Florida Statutes (2022), the reduction in the principal balance of a note and mortgage secured by nonmarital real property is a marital asset ‘if the note and mortgage secured by the property are paid down from marital funds during the marriage.’ Thus, Ms. Kerrigan was entitled to one-half that sum as part of her equitable distribution. [. . .] We reverse the final judgment insofar as it fails to include in the equitable distribution scheme the marital paydown of the Bentcross mortgage, and we direct the trial court to reconfigure the distribution to include that asset. We affirm in all other respects.”
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