Dividing marital funds, as discussed in our CFL™ course, may become a “bone of contention” in a divorce. When dissipation, hidden assets, and other forms of financial trickery are also involved, the proceedings become dicier. Like in the recent Florida appeals case of Sager v. Sager, the situation can become grounds for unequal equitable distribution, and it helps to ensure the terms are clear.
Jerry and Carol Sager married in 1982. By 2016, Jerry filed for divorce and the case proceeded to trial.
Mr. Sager was a mortgage broker/investment banker and his wife worked as a schoolteacher. They owned two homes: their residence and a rental property.
By the time of the trial, Jerry was retired and claimed his only income sources were his monthly Social Security benefits and rent from the income property. Before and after the separation, he managed and/or owned several business entities. He testified that he was in poor health, and no longer had a life insurance policy.
Carol lived with her sister and also spent time with a boyfriend. She didn’t pay rent or living expenses, but had a monthly auto lease and later bought a car. She continued to work and received a “modest” Social Security payout.
The trial court found Jerry’s explanation of his accounts and the transfer of funds among them to be unclear; he wasn’t revealing everything. It had also determined he had “dissipated his businesses, concealed assets, misled the court, and obfuscated the facts concerning his businesses.”
As a result, the court divided the couple’s assets through unequal equitable distribution. It ordered Jerry and Carol to sell their properties. Jerry had to maintain both of them until they sold, with most of the proceeds from the marital home to go to Carol. If Jerry delayed the sales, the equitable distribution wouldn’t be calculated at an 80/20 split. And, if the proceeds from the income property didn’t cover the mortgage, he had to pay the difference between the net earnings and the amount owed. If there was a profit, Carol would “receive a disproportionate share of the proceeds from the sale of the rental home in order to allow for an equitable distribution.”
The court further ordered Jerry to buy a life insurance policy of at least $250,000 and name Carol as a beneficiary. It awarded her a lump sum alimony.
Jerry motioned for a rehearing and to change the final divorce judgment. The court denied his rehearing request and altered the verdict to let him stay in the marital home until it sold. He appealed.
Fourth District Court of Appeal of the State of Florida Decision
In its ruling the appeals court cited Florida statute section 61.075 on equitable distribution of marital assets and liabilities and factual findings as support in a judgment or order.
“Typically, ‘[a] final judgment that fails to identify and value all of the parties’ marital assets and liabilities and that fails to distribute them equitably between the parties must be reversed.’ Tritschler v. Tritschler, 273 So. 3d 1161, 1163 (Fla. 2d DCA 2019). However, ‘[t]he trial court ‘may make an unequal distribution of assets, provided the court supplies a specific finding of fact to justify its unequal distribution.’”
As the appeals court stated, the division of the proceeds from the property sales “must be articulated, not assumed. And, it is unclear who gets the 80 or 20 percent.”
Regarding the life insurance policy, Jerry petitioned to require findings on his insurability and means to buy a policy. Carol responded that the trial court correctly required him to get the life insurance policy to secure the alimony due to her.
According to prior case law, the trial court must make specific evidentiary findings on the availability and cost of insurance, the buyer’s ability to pay, and the “special circumstances that warrant the requirement for security of the obligation.” Those circumstances can include if the recipient spouse is disabled, elderly, or has limited employment skills that would lead to lost income upon the former spouse’s death.
The appellate court decided that the trial court failed to “identify the value of the marital home and the percentages to be apportioned.” It reversed and returned the case to the trial court for a valuation on the marital home, clear identification of the allotment of the property proceeds, and an explanation for its conclusions. It also requested a determination on the availability and cost of life insurance for Jerry and his ability to pay for it.
The days of practicing family law without enough knowledge are over. Today, clients seek attorneys who fully understand the financial aspects of divorce. Our CFL™ course fills the gaps in your education, covering everything from hidden assets to business valuation and beyond while you gain Continuing Legal Education (CLE) credits. Passing the course doesn’t just add to your credentials. An enhanced skill-set lets you tackle more complex cases and distinguish your practice from your competitors