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Florida Divorce and Business Ownership: Marital Labor

DivDecree

On March 22nd, 2017, the Florida Second District Court of Appeal released a decision in the case of Bair v. Bair. This complex divorce case involved a business owner who held nonmarital interests in a company, but who also worked full time at the company throughout the length of the marriage. As such, the court ruled that his “marital labor contributed the increased value of his nonmarital business interests.” Here, our Orlando family law attorneys discuss this case and the general concept of business valuation and asset division in a Florida divorce.

Understanding the Dispute

The Background

In the fall of 2012, Mr. Bair filed for the dissolution of marriage. Through out-of-court negotiations, the couple was able to agree on issues of child custody as well as the division of certain assets, such as the family home. However, a sharp disagreement arose regarding the valuation of the ‘marital portion’ of Mr. Bair’s nonmarital business interests.

Equitable Distribution

Under Florida law, marital assets are divided in an ‘equitable’ manner. Three different questions must be asked when dividing up assets in a divorce.

  1. What is the value of each individual asset?
  2. Which assets actually qualify as ‘marital assets’?
  3. What constitutes a ‘fair’ distribution of assets?

In some cases, these questions are relatively easy to answer. For example, if a couple’s bank account has $10,000 in it, and the court determines that equal distribution is appropriate, then each spouse can simply split the amount, and take their $5,000. However, in other cases, valuing and dividing assets can be immensely complicated.

Dividing the Marital Portion of Nonmarital Business Interests

Mr. Bair owns a part of a boat dealership business in Clearwater, Florida. The business was started by his father when Mr. Bair was a teenager. He owns this business with his siblings. Mr. Bair began working at this company long before he met his wife. When Mr. Bair’s father passed away, he inherited a large ownership stake in the business. Notably, Mr. Bair also worked full time at this business throughout the length of his marriage. At the trial stage, it became clear that there was no question that Mr. Bair’s direct ownership interests were ‘nonmarital property’. However, because he committed so much ‘labor’ to the business during the course of the marriage, Mrs. Bair argued that the increase in value of the company, resulting from this labor, constituted a marital asset. The appeals court ruled that this labor does qualify as a marital asset, but that the trial court improperly valuated it. As such, the case was remanded to the trial court to determine the appropriate value of his marital labor.

Get Family Law Help Now

Are you currently stuck in a dispute over the division of your assets? If so, our team can help. At Law Offices of Steve W. Marsee, P.A., our attorneys have served Orlando and Central Florida for more than a decade. Please call our firm today at (407) 521-7171 to set up your confidential initial case evaluation.

Resource:

2dca.org/opinions/Opinion_Pages/Opinion_Pages_2017/March/March%2022,%202017/2D16-272.pdf

Steve W. Marsee, P.A.

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