Husband, 48, and Wife, 44, have been married for 17 years as of 2011. In 1998, the Husband started his own insurance sales business (John Doe Insurance, or JDI), which he continues to be the sole owner and proprietor as well as an employee. Since 2004, the Husband has paid himself an annual gross salary of $125,000. JDI continues to be profitable selling all types of insurances such as health, life and disability.

As of the date of marriage, the Wife was working as an LPN while pursuing her RN certification on a part-time basis. The Wife obtained her RN license within 18 months of the date of marriage (1996). The parties’ first (of two) children was born soon thereafter (1998) at which point the Wife no longer pursued her RN career on a full time basis even after the parties’ youngest child attained school. This arrangement was by agreement of the parties. Although the Wife thereafter served primarily a homemaker, she did assist her Husband with furthering his insurance career by marketing JDI and working as a secretary between the time period of approximately 2000 through 2009.

In 2010, the Wife went back to nursing school so as to renew her nursing career. The Husband filed for divorce just as the Wife obtained re-licensing as a nurse in early 2011. The Wife is currently earning $40,000 per year as a full time nurse at a local hospital. The Wife has counter-petitioned for divorce seeking both an unequal distribution of the marital assets and permanent periodic alimony as well as a contribution towards her attorney fees.

As the parties’ Marriage went south in early 2010, JDI suddenly experienced a decrease in sales. The Husband contends that he (as the sole owner of JDI) cut his salary in 2010 and again in 2011 by 50% as a result of JDI’s significant losses. The Husband denies the Wife’s entitlement to an “unequal distribution” and that the parties currently have comparable earning capacities and, therefore, the Wife should not be awarded any alimony.

Unequal vs. Equal Distribution

The starting point under Florida’s equitable distribution statutes is a 50/50 division of the “marital” assets and liabilities. However, Florida statute section 61.075 does provide for an unequal distribution in certain instances. Under this fact pattern, if the Wife made extraordinary contributions towards the Husband’s business and his insurance career all the while foregoing her nursing career and serving primarily as homemaker raising the parties’ two minor children, one may argue that the Wife is entitled to an “unequal distribution” of the marital assets. In order to effectuate an “unequal distribution”, the Wife may seek the sole and exclusive use and possession of the parties’ marital home during the remainder of the children’s minority and/ or a greater share of other marital assets including any interest she may have in JDI. Would the Wife be awarded the Husband’s business, JDI?

Highly unlikely, since the Wife is not knowledgeable of insurance(s) and holds no such licensing. Her vocation is nursing. The Wife would want the Husband to keep JDI as his sole property so as to earn income to pay both alimony and child support (and contribute towards her attorney fees). So does the Wife have a marital interest in the Husband’s business? Yes! The Husband would either buyout the Wife’s marital interest by lump sum or offset against other marital assets in which the Husband has an interest. The first step would be to valuate the Husband’s business, JDI.

In valuating JDI, the Husband would want to insure that he is not the victim of double dipping. For example, if the Husband is ordered to pay alimony, then same would be payable out of his business income. The business income, however, is also a factor in valuating the business, the value of which the Wife is seeking at least her one-half share (as a marital claim). If she receives one-half or more of the value of the business and then it’s income in the form of alimony, this is double dipping. To avoid this, the Husband would want to subtract out the yearly alimony payment from JDI’s net income and then valuate JDI on a lower net income. A CPA or other qualified professional would need to be retained for purposes of the valuation and avoidance of any double dipping.

Alimony

Prior to establishing alimony, the marital assets and liabilities will first need to be distributed. Once this is accomplished, we would then have a more accurate depiction of the parties’ relative financial resources for purposes of determining need and ability for alimony. Further, in this fact pattern, a presumption of entitlement arises in favor of alimony since the parties’ Marriage is “long” term (17 years or more).

The Wife would argue that the parties have a disparate earning potential; that she contributed towards her Husband’s business career while foregoing her nursing career and serving primarily as homemaker by agreement of the parties; and that she cannot be self-supporting in the lifestyle established during the parties’ long-term marriage without contribution from the Husband. The Husband may rebut the presumption of entitlement by seeking to prove that JDI is no longer profitable and the parties have equally divided all of the major assets (or that Wife received a greater share as part of an unequal distribution); that the Husband’s income has declined by 50% through no fault of his own since 2010 and that the parties, therefore, have comparable earning potential; and that the parties either lived beyond their means during the marriage or that their lifestyle was modest (and the Wife, therefore, can support herself on $40,000 per year).

The Husband’s sudden decline in earnings is suspect. If the Wife contends that the Husband is “voluntarily under-employed” and not using his best faith efforts to earn his customary $125,000 per year, then the Wife may seek to impute a higher level of income to the Husband. The Wife would have the burden of showing that the Husband is capable of earning more than he is in light of his work history, qualifications and the prevailing earnings in the local community. If the Husband is able to prove that he is doing the best he can to earn at his prior level and the decline in JDI’s receipts is due to an economic downturn, the Court may still award permanent periodic but in the form of “nominal” alimony.

Nominal alimony may be awarded in instances where, as here, the prospect remains that the Husband may realize his full earning potential in the future (leaving the door open for the Wife to pursue a higher amount of alimony).

May I relocate with the children to another state where I have a job offer with the possibility of career advancement?

Question:
I was divorced back in 2006. My Former Husband and I have two sons, ages 12 and 14. Our sons are good kids, get good grades are active in sports and their father, admittedly, does have a good relationship with the boys. My Husband sees the children on alternating weekends from Friday after school until the following Monday morning; usually one to two evenings per week; equal time during all major holidays; and one-half of the Summer. He has not missed any occasion to spend time with our children, and he is further active in our sons’ sports.

About 3 years ago, I obtained my Masters’ Degree and have since pursued a career as an adjunct professor at the local community college. I recently received tenure but the position offers no career advancement and is not in the area of education for which I have been trained and published. I have searched for a full time position with career advancement in my area of specialty but was only able to find a position at a reputable college in Illinois. The initial starting salary is comparable to what I am currently earning but within two years, I may be making two times what I am currently earning notwithstanding benefits.

I emailed my Former Husband of my desire to relocate to Illinois with our sons and to offer him extended holiday and summer time sharing as well as sharing the costs of transportation. Needless to say, my Former Husband went ballistic and adamantly objected to taking the boys to another jurisdiction. May I relocate with our sons? The opportunity is not available here in Florida, and I truly believe this move will enhance the quality of our sons’ lives.

Answer:
If you desire to relocate with your sons to another jurisdiction more than 50 miles away from your current residence for a period of at least sixty (60) consecutive days, then you will need to request permission from the Court by way of filing a Petition. Section 61.13001, F.S. If a parenting plan is already in place thereby giving your Former Husband court-ordered time sharing, then you will need to further put forth a “revised postrelocation schedule for access and time-sharing” Section 61.13001(3)(a), F.S.

The Court will evaluate a variety of factors in determining whether the relocation is in the children’s best interests. Although the move may enhance your career, this is not the primary basis for the move. You would need to prove, among other factors, that the “relocation will enhance the general quality of life for both the parent or other person seeking the relocation and the child, including, but not limited to, financial or emotional benefits or educational opportunities”. Section 61.13001(7), F.S.

The Father has grounds to object to the relocation. I believe the most difficult aspect of your request would be whether the substitute time sharing schedule will be “. . . [feasible in] preserving the relationship between the nonrelocating parent … and the child” in light of the Father’s apparent bonded relationship with the children. The alternative time sharing clearly will not provide the Father with the same level of frequency of time sharing or an ability to take part in the children’s activities. Although Florida Law does suggest that the substitute arrangements do not have to provide the same level of frequency of time sharing, your Husband will probably argue that he not only time-shares, but is an active participant in the children’s lives and that the relocation will severely hamper this bond. Let’s assume your Husband is current with his support obligation and that this was never an issue. This is another argument in his favor. Section 61.13001(7)(h), F.S. Finally, your Husband may argue that the move will not enhance the general quality of life of both you and your son’s lives and that any economic gain is speculative.

If you are seeking to relocate, the request in and of itself does not serve as a basis for the other parent seeking a modification of the parenting plan/ time sharing. A modification of the parenting plan and time sharing must be based on a substantial change(s) in circumstance, and a request to relocate does not amount to such a change in circumstance.

The Courts truly struggle with relocation cases, especially where the children have a bonded relationship with the non-requesting parent; the children have established roots in their community including extended family and school; and, the proof of enhancement in the general quality of life is alleged but not a given. Again, the main focal point is the best interests of the children.

The foregoing is not intended as legal advice. If you are in need of legal advice and/ or more information on the recent amendments to Florida’s alimony statute (section 61.08), the please feel free to schedule a free initial consultation.

Question:
My Husband and I have been married for 12 years.  During our marriage, we lived in a Home that he purchased prior to marriage for $125,000 – and which was encumbered with a mortgage.  I did not contribute towards the purchase of the Home, and the Home remains titled solely in my Husband’s name.  However, during our marriage, I did contribute my earnings towards payment of the mortgage and other expenses associated with the improvement and repair of the Home.  Although today’s real estate market is not too good, a comparable property sold down the street for $300,000.   We are now getting divorced.  My Husband contends the Home is his non-marital asset and that I am not entitled to any of it.  Is this true?

Answer:
I would argue that you have a claim to the “passive appreciation” of your Husband’s non-marital Home under current Florida Law. The Florida supreme court recently came out with an opinion in the matter of Kaaa v. Kaaa, 39 Fla. L. Weekly S521 (Fla. 2010) which provides that passive appreciation of a non-marital asset may be a marital asset under certain circumstances, which as here, a mortgage is encumbering the Property (or was encumbering the Property during the marriage); and you have contributed towards both the mortgage and other expenses associated with the Property.  Your entitlement to a claim is against the appreciation/ enhancement in value of the non-marital Home and not the Home itself.  Further, you would have the burden of proof that your monetary contributions and/or marital efforts “enhanced the value” of the Home.

For example, let’s say the Home was worth $X at the date of marriage and was encumbered with a mortgage of $Y.  Further, during the marriage, the parties applied their respective earnings (marital funds) towards the payment of the mortgage (principal reduction) and the improvement and repair of the Property.  Let’s further assume that the mortgage balance had been reduced during the Marriage and the Property’s value increased by $100,000.  If you prove that your monetary contributions resulted in principal reduction of the mortgage; that improvements (such as, without limitation, the addition of a swimming pool, new roof, conversion of a car-port into a garage, room addition; etc) enhanced the value of the Home; and that your marital efforts towards repairs and maintenance of the Home increased it’s value, then you would be entitled to a claim against the Home’s appreciation in value (against the $100,000 enhancement in the example, above, not the Home itself).

The foregoing is not intended as legal advice.  If you are in need of legal advice and/ or more information on the recent amendments to Florida’s alimony statute (section 61.08), the please feel free to schedule a free initial consultation.

Question:

My Wife and I have been separated for about three months now.  We have a five year old son, who pretty much lives with his Mother.  I get to see him on alternating weekends from Friday afternoon until Monday morning and some Thursday overnights (although my Wife says the Thursday overnights will stop once school starts latter this month).  I have been giving her $ 500.00 per month since we separated.   I have just been served with divorce papers.  Can I get additional visitation time?  What is my child support?

Answer:

Florida now requires parents to establish a “Parenting Plan” which includes “time sharing”.  If the parties are not able to agree upon a Plan, then the Court will establish one.  Under current Florida law, the courts will no longer designate one parent as the “primary residential parent” (custodian) and the other “secondary residential” with rights of visitation.  The parties will have “time sharing”, which may be specifically set out in the Parenting Plan during the school year, school breaks such as Spring Break, holidays, summer and telephonic access.  If you have been an active participant in your son’s life, live relatively close to his current residence and have a good rapport with your Wife, then I do not see any reason why you could not ask for what is called, “substantial” time sharing (currently defined as 40% or more of the overnights).

This brings me to my second point.  The Child Support guidelines were recently amended.  Effective January, 2011, if a parent has “20% or more” of the overnights, then this time sharing arrangement would reduce that parent’s child support (as opposed to 40% or more of the overnights).    I would still inquire of your Wife’s counsel as to applying the amended statute even though it is not effective until January.  You could argue that by applying the statute now, we are saving you and your then-Former Wife from having to go back to Court in January, 2011 to modify downward your support obligation.

In order to calculate the parents’ support obligation, then I would need to know the parties’ respective incomes;  the cost for any health insurance coverage for the parent and to add family to his/ her coverage;  and whether the parties’ child(ren) have any day or after care expense incidental to employment or an educational pursuit.   Both parties have to make mandatory disclosure, which would include provision of this information.  Upon receipt of this information, I would then apply same to the child support guidelines.  Again, I would also seek to apply the amended child support statute at this time in order to reduce your obligation based on the amount of your time sharing with your son.

The foregoing is not intended as legal advice.  If you are in need of legal advice and/ or more information on the recent amendments to Florida’s alimony statute (section 61.08), the please feel free to schedule a free initial consultation.