20 Year Equitable Distribution Divorce Payment Reversed
Equitable distribution in a divorce can sometimes be fashioned such that one party pays periodically to the other for any difference between the typical 50/50 split that is supposed to occur under Florida statutes. Judges will usually try to balance everything out so that such payments aren’t necessary.
Of interest, equitable distribution payments cannot be enforced through contempt. The usual remedy is to obtain a final judgment and collect the judgment just like any other creditor. Obviously, this can cause quite a bit of consternation for people that are owed these payments. Additionally, these payments are treated differently than alimony.
No income tax liabilities occur as these are distribution of asset-balancing payments. The usual duration for these payments is sometimes hard to predict. It sometimes comes down to how much extra cash a spouse has to pay toward this debt. Typically, somewhere between 12 and 60 months seems to be the norm. However, sometimes the judges go too far in deciding how long the payments are to last.
In the recent appellate court decision of Evans vs. Evans, a 20-year payment plan of $150 per month was reversed because it would take too long for the receiving party to get their share. Such a plan effectively deprives the receiving party of the majority of the equitable distribution for too long a period of time. The problem with this opinion is that the appellate court gave no assistance to the trial judge on what realm of time would be acceptable. Obviously, appellate courts try not to give advisory opinions, but what happens if the trial judge doubles the payments per month and now the recipient is stuck with 10 years worth of payments? Is another appeal going to occur? It is a possibility, depending upon the circumstances.
Equitable distribution is designed to split up assets and liabilities, not provide for a strung out payment plan. Florida statute 61.075 provides no instructions to the court on the extent of how these payments are to be calculated. Savvy practitioners will usually require life insurance so that the unexpected demise of the spouse paying these payments will not affect the equitable distribution scheme. Judges should be requested to make similar provisions. Otherwise, the recipient is simply another creditor of the estate.