Florida Bar Journal

Is an Unequal Equitable Distribution Equitable?

In Florida, under the common law, title dictated the distribution of assets incident to a divorce.^[1] Wives were at risk in a divorce and were dependent on alimony and child support as courts were not permitted to alter title to achieve equity. Trial courts were not permitted to equitably distribute property except to the title owner thereof.

The earliest expression of the philosophical underpinnings of equitable distribution and partnership concepts found expression in 1974 in Brown v. Brown, 300 So. 2d 719 (Fla. 1st DCA 1974). In Brown, the couple had accumulated $233,000 in marital assets over a 21-year marriage, during which the couple had assumed traditional roles. Specifically, the wife had given up her career to make life worth living for the family. The wife abandoned her career as a nurse to be a housewife and mother, and the husband pursued a lucrative career as a CPA. At the time of the divorce, the husband held sole title to all of the parties’ assets accumulated during the marriage. The Brown court squarely faced the limits of the common law’s ability to impose equity in a property distribution incident to a divorce. The appellate court avoided an inequitable result for the wife by finding that no-fault divorce had altered the law and permitted the use of lump sum alimony, not only as an extraordinary remedy, but to “[adjust] the material wealth of the parties.”^[2] The trial court was empowered to consider the contributions of each and award lump sum alimony to achieve equity.

The Florida Supreme Court took the next step forward in the legal evolution of divorce fairness in 1980 when the court approved the remedy of equitable distribution in the seminal case of Canakaris v. Canakaris, 382 So. 2d 1197 (Fla. 1980). In Canakaris, trial courts were held to have the discretion to award lump sum alimony to ensure “an equitable distribution of property acquired during the marriage,” provided that the trial court found there was justification for lump sum alimony and the corresponding ability of the other spouse to pay the award.^[3] The lump sum alimony awarded to the wife in Canakaris was the husband’s one-half interest in the jointly titled former marital home.^[4] The justification for the imposition of lump sum alimony was the financial success of the marriage and the disparity in the parties’ assets and income and the equity that would result without such an award.^[5] The husband’s net worth was $3,749,930 and all had been accumulated during the marriage in which the wife was a traditional housewife.^[6] Even with the equitable distribution by lump sum alimony of the husband’s interest in the former marital home, the wife received total assets of only approximately $385,000.^[7] Thus, the wife’s significant need and the gross asset disparity was the justification for the award in Canakaris.^[8]

In 1985 in Tronconi v. Tronconi, 466 So. 2d 203 (Fla. 1985), the Florida Supreme Court further expanded the concept of equitable distribution of jointly owned real property to include non-support justification and determined that such an award was the “natural extension of the rule adopted by the Florida Supreme Court in Canakaris.”^[9] The Tronconi court extended the proposition of the transfer of property interests and affirmed a trial court award allocating the ownership of three pieces of jointly owned real properties between the parties to achieve an equitable distribution of their various property rights.^[10] The vehicle to achieve an equitable distribution in Tronconi was the cross-awards of property.^[11] The resulting awards were not “precisely [an] equal division of value” but the award was found by the trial court to be equitable and achieved “a clean break from the bonds of matrimony and joint ownership.”^[12] The focus in Tronconi was the equitable justification for the award.^[13] The basic tenet of a judicial system is to provide a remedy for every right.^[14] Tronconi merely applied this basic jurisprudence concept to divorces and ruled that if justification was present, the trial court was empowered to reward the contributions of a spouse through an equitable award.^[15]

The Canakaris court recognized the traditional justification of support needs and then expanded the permitted justifications to encompass a new justification, or an award of a special equity, that arises in appropriate equitable circumstances.^[16] The Tronconi court then expanded the category of justifications to encompass the cross-awards of jointly held real properties to achieve an “equitable distribution.”^[17] The law strained and evolved to achieve fundamental fairness for the impecunious spouse who had contributed to the marital partnership.

In 1988, the State of Florida ultimately codified the concept of equitable distribution in its first equitable distribution statute, to-wit: F.S. §61.075 (1989). Prior to the adoption of the equitable distribution statute, an equitable distribution of marital property had been permissive. However, the 1989 statute mandated an equitable distribution in all actions.^[18] The underpinning of the law was the judicially imposed presumption that marriage is a partnership and that both spouses contribute to the accumulation of marital property in direct or indirect ways (such as through a contribution of services whereby the other spouse is thereby supported and empowered to accumulate income or property).^[19]

The current version of the equitable distribution statute, provides that “in distributing the marital assets and liabilities between the parties, the court must begin with the premise that the distribution should be equal, unless there is a justification for an unequal distribution based on all relevant factors.”^[20] This language not only narrows the trial court’s scope of discretion in awarding an unequal equitable distribution, but also requires the party requesting this relief to present sufficient facts to justify an equitable distribution pursuant to all or some of the 10 statutory factors (rather than relying on generalized notions of justice and equity). Ergo, we have to analyze the appellate decisions and trends in the caselaw regarding application of the statutory factors in order to truly determine when it is legally appropriate (i.e., not reversible error) for a trial court to award an unequal equitable distribution.

Since an equitable distribution award is premised on contributions of both parties to a marital partnership, the cases in which an unequal equitable distribution is granted should be limited to those cases in which a substantial contribution is absent. In practice, obtaining an unequal equitable distribution is often a difficult task due to proof issues. Note, to have a chance at having an unequal equitable distribution scheme affirmed on appeal, the trial court must first properly identify, classify, and specifically value and distribute the marital assets and liabilities. Any failure to properly perform these tasks results in the trial court not having the information necessary to know if the award is equal or unequal.^[21]

If the trial court believes the evidence presented at the final hearing was sufficient to justify awarding an unequal equitable distribution, the trial court must make specific findings of fact based on competent substantial evidence as to the statutory factors to support that conclusion.^[22] Such findings are required and an appellate court will reverse any attempted unequal equitable distribution that does not include these findings.^[23] This is true even when the record reflects that the trial court received potentially sufficient evidence and even referenced specific facts that could support an award of an unequal equitable distribution.^[24] This is also true even if there is no transcript of the final hearing.^[25]

If the trial court believes the evidence presented at the final hearing was not sufficient to overcome the presumption that an equal equitable distribution is appropriate, the trial court should deny the request for an unequal equitable distribution but must still make specific findings of fact based on competent substantial evidence about the statutory factors to support that conclusion.^[26]

An analysis of the statutory factors contained in §61.075 and the applicable caselaw reflects the type of cases in which an unequal equitable distribution is justified or rejected:

• The Contribution to the Marriage by Each Spouse, Including Contributions to the Care and Education of the Children and Services as Homemaker — Here, these contributions must generally be from a spouse directly and not indirectly through family members. For example, where a spouse’s parents gifted money to both spouses during the marriage, those gifts were not a spouse’s extraordinary contributions that would justify an unequal equitable distribution.^[27]

• The Economic Circumstances of the Parties — Disparate earning capacity, without more, cannot act as the sole basis for unequal distribution.^[28] The basic premise is that each party may play disparate roles in the partnership of marriage and earning more does not preclude other forms of contribution by the other spouse.

• The Duration of the Marriage — Regardless of the parties’ cohabitation status, the length of the marriage is measured from date of marriage through date of filing the petition for dissolution of marriage.^[29] When the parties’ marriage is short-term and only one spouse has contributed to the marital assets, unequal equitable distribution awards made to the contributing spouse have been upheld on appeal in multiple districts.^[30]

• Any Interruption of Personal Careers or Educational Opportunities of Either Party — The focus of this factor is not merely that some type of interruption occurred, but that there was some resulting sacrifice by the party who experienced the interruption. The facts of Cooley v. Cooley, 253 So. 3d 1223 (Fla. 2d DCA 2018), are instructive here. The parties separated after just over four years, but the wife waited almost another two years to file a petition for divorce, resulting in a six-year marriage. The parties had no children together. Prior to the marriage, the wife worked as a teacher, earning approximately $40,000 per year, but enrolled in law school about eight months before the parties married. The parties lived together before the marriage and the husband supported the wife’s decision to attend law school, viewing it as a long-term investment for their future. The parties’ income decreased significantly while the wife was attending law school. At that time, the husband had a “good, stable job” with the county and was earning about $50,000 per year, although he testified that he put on hold “any other advancement or risk-taking” that would have furthered his career while the wife was in law school.^[31] The wife earned some income while she was a law student, including approximately $30,000 one year as a summer associate with a law firm. During the marriage, the wife took out student loans of $76,400 and the parties used joint funds to pay off the husband’s student loans that he incurred prior to the marriage. The parties stipulated that as of the date of separation, the principal and interest on the wife’s student loans was $91,362.11. The wife testified that excess loan funds were deposited into the parties’ joint account and were used for living expenses. The husband acknowledged that excess loan funds “probably did go into some regular living expenses.”^[32]

The wife graduated from law school prior to the parties’ separation and was admitted to The Florida Bar. She initially took a job as a staff attorney with the circuit court at an annual salary of about $40,000, but approximately a year later she took a job with a private law firm. By the time of trial, the wife had taken a position with another law firm and was earning approximately $100,000 per year. By the time of trial, the husband was earning about $64,000 per year. Because he had “worked [his] way up,” he had a “great opportunity” to move to a new position that increased his salary to $112,000 per year.^[33]

After assessing the statutory factors, the trial court awarded the husband an unequal equitable distribution. Despite the fact that both the credit card debt and the wife’s student loan debt were incurred during the marriage, the final judgment made the wife responsible for the entirety of these debts. The trial court valued the home on the date of separation at $175,000, found that it had appreciated from the separation date to the trial date in the amount of $17,000, and determined that the husband was entitled to the full appreciation. The trial court assigned the entire mortgage debt to the husband but gave him credits for payments he made on the mortgage and other home expenses (he continued to live in the home post-separation while the wife obtained an apartment). Under the equal equitable distribution plan that the wife proposed, the husband would have been required to make an equalizing payment of $81,062.61 to the wife. However, because the trial court awarded the husband an unequal distribution, the court ordered the wife to make “an adjusted equalizing payment” of $11,563.73 to the husband.

The main factors the court used to support the unequal distribution were the contribution to the marriage by each spouse, the economic circumstances of the parties, the duration of the marriage, and the interruption of personal careers. With respect to the contribution to the marriage, the trial court found that the husband supported the wife emotionally and financially in her career pursuit and that he was the primary income source. The appellate court rejected this as a basis to support an unequal distribution, but also noted that the wife did earn some income during law school.

The trial court also found that the husband contributed to the marriage by providing “substantial care for his handicapped sister-in-law while the wife was in law school.”^[34] Although the wife did not dispute that the husband helped care for her sister, his testimony was that he cared for his sister-in-law when the wife or her mother was not available. Since there was no evidence that his assistance affected his career or the parties’ financial situation, the appellate court rejected this as a basis to support an unequal distribution.

With respect to interruption of personal careers, the trial court found that the husband delayed pursuing advancement opportunities due to the reduced household income and that the parties chose not to take additional financial risks. But the appellate court noted that the husband’s testimony also showed that he suffered no financial harm. Rather, the husband had worked his way up with the county and then obtained a great opportunity with the Port of Tampa, nearly doubling his salary by the time of trial.

The parties did not dispute that the student loan debt incurred during the marriage was a marital liability. The trial court acknowledged that under the applicable law, “[t]he fact that one party will not receive any benefit from the other party’s education because of the dissolution is not a factor to be considered when allocating a marital debt for student loans.”^[35] Yet, the trial court also stated that “[f]or the Husband to now be burdened with such a large amount of debt, from which he did not benefit from the time the debt was incurred, is not equitable.”^[36] The appellate court ruled that this was not a proper consideration, as the trial court had already noted in its findings, and reversed and remanded for the trial court to effectuate an equal equitable distribution.

• The Contribution of One Spouse to the Personal Career or Educational Opportunity of the Other Spouse — Becker v. Becker, 639 So. 2d 1082 (Fla. 5th DCA 1994), is a rare case in which an appellate court reversed an equal equitable distribution and remanded for the trial court to consider the statutory factors when making an equitable distribution. There, the wife appealed the equitable distribution scheme and the appellate court found that the trial court abused its discretion “in finding a [50/50] split appropriate.” In support, the appellate court noted that the wife contributed little to the parties’ short-term marriage of only four years, the parties had no children of their own, and the parties had a housekeeper. The wife points out that she did pick up the husband’s children from Hebrew school and take them to their mother’s home on occasion and that she even rented video tapes for her husband’s entertainment. She also did the laundry and grocery shopping and sent birthday and Hanukkah cards for the husband. Even so, the husband paid the great majority of the wife’s educational expenses incurred in the two and a half years it took her to obtain a master’s degree in accounting. The wife worked before the marriage and after graduation, and used all but one of her pay checks for her own needs and wants. The husband otherwise paid all the household expenses. The parties carefully kept their assets separated during the marriage. On these facts, the appellate court concluded “Nothing about the marital history indicates that a [50/50] split could be considered equitable.”^[37]

• The Desirability of Retaining Any Asset, Including an Interest in a Business, Corporation, or Professional Practice, Intact and Free from Any Claim or Interference by the Other Party — The caselaw is clear that it is reversible error for the trial court to leave the parties as joint owners of a closely held business following the divorce.^[38] Thus, it is incumbent on the parties to present proper valuation evidence so that the trial court may award such an asset to one of the spouses and “devise a plan of distribution which causes the least interference with the ongoing business of the corporation, yet which is practical and beneficial to both spouses.”^[39] Usually, the party more involved in the business’s operations, or who has the relationships with the clients/potential clients, or who holds a license necessary for the business to operate is the spouse who is awarded a marital business in a divorce. This involvement and these contributions should be presented to the trial court not only in support of a request to receive the business, but also if helpful to justify a request for an unequal equitable distribution of marital assets.

• The Contribution of Each Spouse to the Acquisition, Enhancement, and Production of Income or the Improvement of, or the Incurring of Liabilities to, Both the Marital Assets and the Nonmarital Assets of the Parties — The facts regarding this factor in support of an unequal equitable distribution claim often involve one party contributing his or her non-marital funds (whether an inheritance, sales proceeds from a non-marital home, or funds from a non-marital brokerage account) toward the purchase of a home during the marriage that is jointly titled. In such situations, the spouse seeking the unequal equitable relief must overcome the presumption that the acquired property is a marital asset and that a gift of the funds was intended.^[40] On this issue, the Fifth District Court of Appeal stated:^[41]

“[S]tanding alone, evidence that one spouse provided nonmarital funds to purchase a marital home is insufficient to prove that the spouse did not intend a gift.” David v. David, 58 So. 3d 336, 338 (Fla. 5th DCA 2011) (citing Cintron v. King, 961 So. 2d 1010 (Fla. 4th DCA 2007)). If the subject property is jointly titled, and the parties’ conduct during the marriage demonstrates joint ownership, the party asserting that no gift was intended must do more than make an “unsubstantiated claim, raised for the first time during a dissolution proceeding.” [citations omitted] Further, “[i]t is irrelevant how the funds were received or how much each party contributed.” Jurasek v. Jurasek, 67 So. 3d 1210, 1212 (Fla. 3d DCA 2011) (citing David, 58 So. 3d at 336).

The Fourth District Court of Appeal cited the foregoing language with approval in Chatten v. Chatten, 334 So. 3d 633, 636 (Fla. 4th DCA 2022). Thus, more than the fact of a larger and/or non-marital contribution toward acquisition of marital assets is needed to obtain unequal relief here.^[42]

Rather, evidence of a party’s extraordinary contribution as compared to the other spouse is needed. Extraordinary means something that is “over and above the normal marital duties.”^[43] For example, a 65% wife/35% husband allocation of mortgage proceeds from a marital campground the parties previously sold was affirmed on appeal because that “record contains substantial, competent evidence that the wife made extraordinary contributions to the daily operation and financial management of the campground business during 1976-1984, while the husband remained essentially idle, drinking large quantities of beer. This extraordinary contribution greatly enhanced the value of the campground business.”^[44]

• Retaining the Marital Home — The desirability of retaining the marital home as a residence for any dependent child of the marriage, or any other party, when it would be equitable to do so, it is in the best interest of the child or that party, and it is financially feasible for the parties to maintain the residence until the child is emancipated or until exclusive possession is otherwise terminated by a court of competent jurisdiction. In making this determination, the court shall first determine if it would be in the best interest of the dependent child to remain in the marital home; and, if not, whether other equities would be served by giving any other party exclusive use and possession of the marital home.

The generally accepted practice in circumstances in which this factor is relevant is to allow a spouse to maintain exclusive possession of the residence only until the children reach the age of majority, as the trial court had done in this case previously, at which point the residence should be sold and the proceeds divided equally between the parties.^[45]

An award to the wife of exclusive use and possession of the marital home was affirmed in Ortiz v. Ortiz, 315 So. 3d 149 (Fla. 2d DCA 2021), which involved a situation wherein both of the parties’ incomes were insufficient to meet all of their expenses. In support of this award, the trial court made the following findings that were supported by competent substantial evidence: The wife consistently made the mortgage payments for the former marital home since separation; the children consistently attended schools close to the marital home; if the home were required to be refinanced or sold, the wife and children would have to move out of that area to obtain affordable housing; the husband rented a comparable home minutes away from the marital home; and continuing to live in the marital home would be in the children’s best interest.

• The Intentional Dissipation, Waste, Depletion, or Destruction of Marital Assets After the Filing of the Petition or Within Two Years Prior to the Filing of the Petition — The use of “two years” within this factor is not a statute of limitations on the evidence the trial court can consider under this factor.^[46] Remote dissipation should be considered under any other factors necessary to do equity and justice between the parties (see below).^[47]

Furthermore, to be properly included, dissipation must be the result of misconduct and have occurred during the time the marriage was undergoing an irreconcilable breakdown.^[48] Misconduct is not shown by “mismanagement or simple squandering of marital assets in a manner of which the other spouse disapproves.”^[49] Specific findings of fact regarding the misconduct are also required.^[50]

The trial court’s finding that the wife had dissipated marital assets was affirmed in Collier v. Collier, 343 So. 3d 183, 187 (Fla. 1st DCA 2022). The wife transferred over $4 million in marital assets into a revocable trust in her maiden name about a year before initiating the underlying dissolution case. While the divorce proceedings continued in the trial court the wife moved those trust assets and other individually held assets to an irrevocable trust that also was in her maiden name. Notably, the wife was the sole beneficiary of both trusts, and neither trust made any provision for the husband. Despite the travails of the 33-year marriage that included the husband’s multiple affairs, extortion from one affair, arrests for drug use, and two stints in in-patient drug rehabilitation programs, neither the appellate court nor the trial court found that the wife’s actions in setting up an irrevocable charitable trust (because she and the husband had lived beyond their means, would never be able to spend all their money, and wanted something to survive them, and her contentions that she did not set up the trusts to conceal assets in anticipation of the divorce) were sufficient to avoid an unequal equitable distribution.

• Any Other Factors Necessary to do Equity and Justice Between the Parties — Equity and justice should certainly be considered in constructing an equitable distribution scheme, but the statute does not provide that this factor should be given more weight than any other factor. Moreover, mere reference to this catchall factor cannot substitute for the requirement for the trial court to make specific findings of fact based on substantial competent evidence in the record.

Synthesizing the foregoing cases, an unequal equitable distribution can be properly awarded by a trial court when sufficient factual evidence is adduced at the final hearing. Evidence that one spouse made contributions to the marital estate that are extraordinary and the contribution by the other spouse is absent can be sufficient. Dissipation is another factor that can be employed to justify an unequal equitable distribution. However, absent findings that satisfy the statutory criteria, the unequal equitable distribution will be reversed.