How Does Transmutation Affect the Property Division Process?
Florida is an equitable distribution state, which means that when a couple divorces, they must divide their marital assets in a fair manner. This does not, however, necessarily mean that assets will be divided 50/50. Instead, Florida courts are directed to assess a couple’s individual circumstances when making these determinations, including the value of any separate assets owned by the parties. To make matters more confusing, assets that were initially deemed to be separate, could be transmuted into marital property, meaning that they will be subject to division. There are a few ways that this can occur, so if you have questions about how your own assets are categorized, you should speak with an experienced Fort Lauderdale property division attorney who can help you.
Is Your Property Still Separate?
Assets acquired prior to marriage are generally considered to be separate property, meaning that they will remain in the original owner’s sole possession in the event of divorce. Separate is not, however, a permanent state when it comes to property division. In fact, it is relatively common for property that was once considered to be separate to be transmuted, or changed, so that it is now marital in nature. There are three main ways that this can happen.
Formalized Marital Agreements
One of the ways that a separate asset can be changed to marital property is done deliberately by entering into a formalized marital agreement. Whether this takes the form of a prenuptial or postnuptial agreement, these contracts can declare whether certain assets will either remain separate, or should be considered marital in the event of divorce.
Entering into a prenuptial agreement requires a formalized contract. This is not, however, absolutely necessary to transmute property to a marital asset. For instance, one of the few exceptions to the definition of what qualifies as marital property involves gift giving. By giving someone separate property, or even making a promise to do so, a separate asset can be transmuted into a marital asset. It’s important to note, however, that relying on oral promises can create problems down the road, so if you are considering gifting a major asset to a spouse, you should speak with an attorney who can help you formalize the agreement.
Not all property transmutation is intentional. It is possible, for instance, for a couple to change the nature of an asset through the process of commingling. A house owned prior to marriage that is then used as a couple’s marital home, for instance, will usually be considered marital property, regardless of when it was purchased. Similarly, when funds from a separate bank account are used for investing, those assets will have transmuted and become marital property for the purposes of dividing the investment upon divorce.
Call Today for Help with Your Divorce
If you and a spouse have separated or have decided to divorce, you should start assessing your assets as soon as possible. For help determining which of your assets you will be able to keep and which you will have to share, please call dedicated Fort Lauderdale property division lawyer Sandra Bonfiglio, P.A. at 954-945-7591 today.