Articles Posted in Division Of Property And Assets

In making a division of property and assets in a divorce proceeding, there must be extraordinary circumstances to award an interim partial distribution. In Defanti v. Russell, the Florida Court of Appeal recently stated: “This is an appeal from the circuit court’s order granting the former wife’s amended sworn motion for summary judgment, which sought an interim partial distribution of marital assets in a dissolution of marriage case. The former husband’s estate argues that the former wife was not entitled to the interim partial distribution because she did not show the statutorily-required good cause. We agree with the estate and reverse.

The good cause requirement for an interim partial distribution arises from section 61.075(5), Florida Statutes (2012). Section 61.075(5), in pertinent part, states: If the court finds good cause that there should be an interim partial distribution during the pendency of a dissolution action, the court may enter an interim order that shall identify and value the marital and nonmarital assets and liabilities made the subject of the sworn motion, set apart those nonmarital assets and liabilities, and provide for a partial distribution of those marital assets and liabilities…..(a) Such an interim order shall be entered only upon good cause shown and upon sworn motion establishing specific factual basis for the motion. The motion may be filed by either party and shall demonstrate good cause why the matter should not be deferred until the final hearing…(d) As used in this subsection, the term “good cause” means extraordinary circumstances that require an interim partial distribution. Section 61.075(5), Fla. Stat. (2012) (emphasis added)….We conclude that the former wife did not show without genuine issue of material fact that extraordinary circumstances required an interim partial distribution of her one-half share of the liquid assets. See id. (“Summary judgment is proper if there is no genuine issue of material fact and if the moving party is entitled to a judgment as a matter of law.”). As the husband’s memorandum in opposition argued, the former wife’s motion offered no showing of good cause, that is, extraordinary circumstances which required the interim partial distribution. Thus, the circuit court should have denied the former wife’s motion pending trial, at which time the court could have included the former wife’s one-half share as part of its determination of whether to impose an equal or unequal distribution of the parties’ marital assets and liabilities pursuant to section 61.075(1), Florida Statutes (2012).”

To speak with a Wellington Florida divorce attorney, contact Matthew Lane and Associates, P.A. at (561) 328-1111

In making a division of property and assets in a divorce proceeding in Florida, the award of a ½ ownership interest in property as of a particular date entitles the recipient to share in the gains and losses in the account on the date of distribution. In Graham v. Graham the Florida Court of Appeal stated that: “JoAnn Graham appeals an order granting post-judgment relief on grounds it fails to effectuate the marital settlement agreement she and Nathaniel Graham entered into in September of 1994 in anticipation of the dissolution of their marriage later that year. She maintains the trial court erred both in calculating her share of the former husband’s 401 (k) account and in calculating her share of his Army pension. Persuaded she is right in both instances, we reverse and remand.

The parties’ twenty-year marriage ended with a final judgment of dissolution of marriage, entered on December 22, 1994, which did not specifically address either Mr. Graham’s Army pension or his 401 (k) account. The judgment ordered instead that the “Agreement entered into by the parties at mediation is hereby confirmed and made a part of this Final Judgment of Dissolution of Marriage, and the parties shall comply with its terms and conditions in their entirety. In September of 1994, the parties had signed a typewritten marital settlement agreement that gave Ms. Graham “10/23 of the Husband’s Army retirement as of the date of this agreement…and 1/2 of the Husband’s 401K retirement as of July 24, 1993’…

The phrase “1/2 of the Husband’s 401K” describes a one-half ownership interest in the 401 (k) account itself. Half ownership of any asset, real or tangible personal property…plainly means something other than entitlement to a fixed sum of money. The same is true of intangible personal property, the value of which may also fluctuate. If the parties wanted to agree to a specific dollar amount, they could have done so easily enough by specifying a sum certain…This ownership entitles her to gains (and puts her at risk of losses) on her share. See Hoffman v. Hoffman, 841 So. 2d 695, 696 (Fla. 4th DCA 2003) (holding wife’s entitlement to a specific share of her husband’s IRA account carried with it an entitlement to an equal proportion of the gains and losses until distribution).”

In effectuating a division of property and assets in a divorce proceeding in Florida, enterprise goodwill represents the tendency of customers to return to a business regardless of the reputation of a person who works at the business. Personal goodwill is attributable to the reputation and continued participation of an individual who works at the business. The Florida Court of Appeals recently addressed this issue in Schmidt v. Schmidt. 

In Schmidt v. Schmidt, the Florida Court of Appeals stated that: “Enterprise goodwill, defined as the value of a business “which exceeds its tangible assets” and represents “the tendency of clients/patients to return to and recommend the practice irrespective of the reputation of the individual practitioner,” is a marital asset subject to equitable distribution. Thompson v. Thompson, 576 So. 2d 267, 269 (Fla. 1991).

Personal or professional goodwill attributable to the skill, reputation, and continued participation of an individual is not a marital asset. id. at 270 (explaining ” ‘[a]ny value which attaches to the entity solely as a result of personal goodwill represents nothing more than probable future earning capacity, which … is not a proper consideration in dividing marital property’ “) . Thus, the value of personal or professional goodwill must be excluded when assigning a value to a business for purposes of equitable distribution. If a business only has value above its assets if a spouse refrains from competing with the business, it is clear that the value is attributable to personal goodwill. “The existence of a covenant not to compete signals the existence of personal goodwill. “When valuing the enterprise goodwill of a business, the necessity of a covenant not to compete is significant as it signals the existence of personal goodwill, which cannot be included in determining the value assigned to the business for purposes of equitable distribution. Walton v. Walton, 657 So. 2d 1214 (Fla. 4th DCA 1995), and Held v. Held, 912 So. 2d 637 (Fla. 4th DCA 2005), illustrate the point. In Walton, the trial court was faced with the task of valuing the husband’s accounting practice. 657 So. 2d at 1214-15. The evidence established that it was the husband’s name on the door, the husband who conducted the majority of client conferences, and the husband who was responsible for bringing clients to the practice…The trial court accepted the wife’s expert’s valuation for purposes of equitable distribution. This court reversed, finding that “[t]he most telling evidence of a lack of any institutional goodwill was the wife’s expert’s testimony that no one would buy the practice without a noncompete clause.”

On Behalf of Matthew Lane & Associates, P.A. | Jun 18, 2011 | Division Of Property And Assets