The measurement of marital property is very complex. It requires applying complex legal principles to different properties. Congress recognized that this skill is critical in protecting employee's right to retirement benefits. It created very strict licensing requirements for actuaries. This same skill used to protect retiree interests can also be used to measure the proper marital value of real estate, liquid funds and certain business properties. An under-valuation of marital property means one spouse is shortchanged. An overvaluation of property means the other spouse is shortchanged. Either occurs almost all the time. This results in one spouse being shortchanged. This occurs often because the experts retained lack proper discipline to undertake correct valuations.
It is the burden of the spouse who claims a non-marital component to demonstrate it. Because property is presumed marital, failure to demonstrate a non-marital portion transmutes the property into marital property. Sometimes this burden is met with a prenuptial agreement defining what is non-marital property. Sometimes this burden is met by methods of tracing funds. But tracing funds requires an understanding of the law and the issues involved. In some circumstances, the method is defined by statute. Transactional tracing is often confused with tracing funds. The first is used in overcoming a presumptive gift by demonstrating intent. The second is used in establishing a non-marital portion. When the two are confused (which occurs more often than not) the marital property is vastly overstated.
Non-marital Property can create marital property when it appreciate only because marital effort was used. It can be changed into marital property when it is commingled inside a joint accounts or held in a tenants by the entireties account. It can be changed into marital property through an inability to calculate a marital portion. It can be changed by securing a marital loan and repaying the loan with marital money. The latter occurs with great frequency with both 401(k) plans and real estate initially outrightly owned by one party. For all of these reasons how you fair in court is directly linked to the quality of the expert you retain.
Measuring the Marital Standard of Need
Do not be mislead that this is an easy computation. While the court has broad discretion in determining the amount of support, the underpinnings of the award it makes are based on the level of skill deployed in these measurements. When the amount of the award is reversed on appeal, it is more often than not these measurements which are wrong. An appellate court seldom reverses a discretionary decision of the court. Measuring the marital standard of need requires an in-depth understanding of how the marital statutes define need. It also requires applying the statutes to measure the need. Both involve skill. As the appellate court is unlikely to reverse the court needs to get it right and getting it right depends on the expert you retain.
Ability to Pay
Ability to pay requires an in-depth understanding of income and all its related components and how that income is related to the way marital property is divided. When the ability to pay is undervalued the court is unable to award a sufficient amount. When it is overvalued the alimony award can be excessive. Undervalued income often results when income is not imputed when warranted. When and how much to impute is a complicated matter and very often determined incorrectly. It is the most likely thing overturned by the appellate courts because neither attorneys nor the experts they hire have any knowledge in this area. Mr Reiss is a written authority on the subject and helped shaped case law for it.
Overvalued income results by confusing an income stream with actual income. An income stream includes repayments of principal such as repayment of a note, the coupon rate of a bond and an annuity payment.
It is also overvalued when it is counted elsewhere in the equitable scheme. When proper measurements are not made the court makes the awards without proper guidance. (There is a Florida Bar Journal article covering the topic of alimony and the issue of ability to pay in the publication links section. Jerry Reiss & Michael Walsh, The Mathematics for Imputing Income, 80 Fla. B. J. 64 (July-August, 2006) ). This specific article is cited as authority in West Law's Annotated statute of alimony, F.S. 61.08 (2006).
The Division of Marital Property is interrelated to the Alimony Amount
This requires a complete understanding of the statutory definition of income as well as how the income is directly related to the valuation of the property that produces the income. Only when the expert knows both can proper measurements of either be made.
For example, how can an expert lay claim to qualifications to value a stream of income that requires retirement for its receipt without understanding how to factor into that calculation the case law that prevents the person paying support from retiring before a certain age? The plain simple fact is most experts do not know proper valuation techniques nor do they observe the law that governs the calculation. This leads to substantial over and under-valuations of property. This error compounds because support payments are directly related to the valuation of property.
How can a person claiming expertise with support lend proper assistance without understanding retirement plans and the way they work? Income and the ability to pay spousal support cannot be determined without first determining the amount of marital assets and how they will be divided. This is required by statute. Either extra support payments or an unequal division of marital property and sometimes both correct marital assets dissipated from marital misconduct.
Who pays attorney's fees is determined with very similar principles to alimony. Except the very right to alimony is determined by the court by considering a laundry list of statutory factors; whereas an award of attorney's fees is determined under principles of due process of law.
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