How to Determine a Marital Interest in a Business

Florida law expressly states that “marital assets” include “[t]he enhancement in value and appreciation of nonmarital assets resulting from the efforts of either part during the marriage or from the contribution to or expenditure thereon of marital funds or other forms of marital assets, or both. Fla. Stat. 61.075(6)(a) (2013).

There is not a significant amount of case law addressing this issue but what is available is fairly consistent with the express language of the statute. In Minton v. Minton, 698 So. 2d 936, 936 (Fla. 4th DCA 1997), a husband’s parents owned a company and the husband had a pre-marital stockholders interest in the business and its subsidiaries. The Husband also managed two of the subsidiaries during the marriage. Id. The appeals court found that the entire increase in the value of the entire business during the parties marriage, not just the two subsidiaries managed by the husband, were marital assets. Id. at 937.

Further, in Oxley v. Oxley, 695 So. 2d 364, 365 (Fla. 4th DCA 1997), the husband had numerous pre-marital trust and business interests in which he was only nominally active during the marriage. The husband in this case was essentially a figurehead who made no management of other decisions that affected the growth of the businesses. Id. at 367. The appeals court ruled that the increase in value of the husband’s non-marital interests were not marital assets subject to distribution because the husband did not expend marital effort or funds. Id. at 368. Rather, the appreciation in the value of those interests during the marriage was simply passive of any influence from him. Id.

These decisions are in line with prior decisions in Dunagan v. Dunagan, 664 So. 2d 68 (Fla. 3d DCA 1995) and Robbie v. Robbie, 654 So. 2d 616 (Fla. 4th DCA 1995). In those cases, the general rule is expressed by the appeals courts that the enhancement in value of privately-held, non-marital family businesses during a marriage is a marital asset if the owner-spouse contributed marital efforts and labor to enhance the value of those assets.

By Kenny Leigh

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