What happens with a pre-marital home in a divorce?

Florida allows for the court to set aside pre-marital assets of the parties so they are not distributed in a divorce. Typically, so long as the asset wasn't re-deeded in the new spouse's name, the pre-marital home remained the intact asset of the owning spouse with some exceptions.

However, over the past few years, case law has evolved to allow the non-owning spouse to go after the appreciation of the property. There are two types of appreciation: active and passive. Active is just how it sounds. Either party takes action to improve the property, such as the addition of a pool or detached garage, and not merely maintenance on the property like a new A/C unit or replacing roof shingles. Passive is the natural increase of value due to the market. 

In March 2018, the Governor signed into law what years of case law had attempted to sort out--how to determine the marital value of passive appreciation on a non-marital home. First, there must be a mortgage on the property that was paid down with either spouse's funds (aka marital money). The mortgage's principal must have been paid down during the marriage.

The equitable distribution statute Fla. Stat. 61.075 (the law that dictates how the court divides assets and debts in a divorce) was modified. We now look at what the value of the property was on the date of marriage and on the date of filing to determine any passive appreciation. If there was any active appreciation during this period, we subtract that amount out. Then the formula allows us to use the pay down on the principal of the mortgage to determine the marital portion of the total passive appreciation.