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Disproving the Gift Presumption Regarding Personal Property

by Luis E. Insignares, Esq.

In its recent overhaul of Florida’s dissolution-of-marriage statutes, the Florida Legislature addressed two equitable-distribution issues that had previously been the subject of some debate and division amongst the district courts of appeal. The new provisions addressing these two disputed issues now state:

—-3. All personal property titled jointly by the parties as tenants by the entireties, whether acquired prior to or during the marriage, shall be presumed to be a marital asset. In the event a party makes a claim to the contrary, the burden of proof shall be on the party asserting the claim that the subject property, or some portion thereof, is nonmarital.

—-4. The burden of proof to overcome the gift presumption shall be by clear and convincing evidence.

§ 61.075(6)(a)3, 4, FLA. STAT. (2008) (emphasis supplied).

Prior to the above additions, the equitable-distribution statute provided only that jointly titled real property was presumed to be marital property. See, § 61.075(5)(a)5, FLA. STAT. (2007). The statute said nothing about personal property, nor about what evidentiary standard would be applied to determine whether the gift presumption would be overcome in a particular case.

As to the applicable evidentiary standard, there was little accord in the case law. Some opinions required proof “beyond a reasonable doubt.” See, e.g., Lindley v. Lindley, 84 So.2d 17 (Fla. 1955); Antonini v. Antonini, 473 So.2d 739 (Fla. 1st DCA 1985); Smith v. Smith, 597 So.2d 370 (Fla. 3d DCA 1992). The standard of proof favored in other decisions was “clear and convincing evidence,” Harrison v. Harrison, 314 So.2d 812 (Fla. 3d DCA 1975); Abbot v. Abbot, 297 So.2d 608 (Fla. 2d DCA 1974), while yet another decision applied the “greater weight of the evidence” standard. See, Heim v. Heim, 712 So.2d 1238 (Fla. 4th DCA 1998) (reversing trial court’s refusal to grant special equity in entireties property, because trial court imposed erroneous evidentiary standard of “beyond a reasonable doubt” to husband’s assertion that no gift was intended and that his nonmarital funds were source of funds purchasing jointly titled property).

As noted in the companion article to this one that concerns overcoming the real property gift presumption, practitioners have found the gift presumption difficult to overcome, whatever evidentiary standard formerly has been applied. Frequently, the only documentation as to title or the parties’ intent regarding a gift is the deed itself. Thus, the issue of whether a gift was intended has historically devolved to a “swearing match” between the spouses. In such scenarios, a gift typically is found and the presumption is not overcome.

For example, in Rutland v. Rutland, 652 So.2d 404, 406 (Fla. 5th DCA 1995), receded from on other grounds, Anson v. Anson, 772 So.2d 52 (Fla. 5th DCA 2000) (en banc ), the court stated: “The husband’s conduct evidencing joint ownership simply cannot be overcome by the mere unsubstantiated claim, raised for the first time during a dissolution proceeding, that he never intended a gift to the wife at the time of the conveyance. See Laws v. Laws, 364 So.2d 798 (Fla. 4th DCA 1978); Claughton v. Claughton, 483 So.2d 447 (Fla. 3d DCA), rev. denied, 492 So.2d 1330 (Fla.1986).” (Emphasis added, footnote omitted). See also, Gallinar v. Gallinar, 763 So.2d 447 (Fla. 3d DCA 2000) (absent any evidence to rebut presumption that)

In considering attempts to overcome the gift presumption in a real-property context, Florida courts have proven very reluctant to accept special-equity claims, because of the generally self-serving nature of the claim and testimony in support of it, and have rejected such claims if there were virtually any evidentiary basis to do so. See, e.g., Bomwell v. Bomwell, 676 So.2d 508, 510 (Fla. 4th DCA 1996) (“Wife presented no evidence to rebut the presumption that she had intended the funds to be a gift.”) [applied to the marital home] (bracketed material supplied); Smeaton v. Smeaton, 678 So.2d 501 (Fla. 1st DCA 1996) (stating simply that “there was insufficient evidence to overcome the statutory presumption that real estate held as tenants by the entireties constitutes a marital asset”); Rutland v. Rutland, supra (husband’s premarital down payment on marital home owned by husband alone prior to marriage, but transferred into entireties property following marriage, was insufficient to rebut gift presumption, where husband deeded property “without reserving his known claim – his premarital down payment. . .”); Glover v. Glover, 601 So.2d 231 (Fla. 1st DCA 1992) (noting presumption, but reversing award of special equity in marital home because “final judgment includes no specific finding as to whether the marital home and property are marital or nonmarital assets.” 601 So.2d at 233-34); Escudero v. Escudero, 739 So.2d 688, 692 (Fla. 5th DCA 1999) (although husband’s testimony regarding testamentary purpose [for joint titling] was unrebutted, trial court “did not have to believe . . . testimony even if unrebutted;” held: denial of special equity affirmed) (bracketed material added).

Presumably, the results typically occurring in the real-property context will now carry over to disputes involving jointly titled personal property. In the real-property arena, the most frequent claim made has been that the property was jointly titled for estate-planning purposes; in the rare case where both spouses agree that this was the intent behind the joint titling the gift presumption will be overcome. See, Hill v. Hill, 675 So.2d 168 (Fla. 5th DCA 1996); compare, Hay v. Hay, 944 So.2d 1043 (Fla. 4th DCA 2006) (holding that home was marital property where gift presumption was not rebutted; husband testified that he placed wife’s name on deed merely to ensure that she could have property if something happened to him, and wife testified that husband told her that, “This is our house,” and that he had purchased it for the two of them and her children); Lyons v. Lyons, 687 So.2d 837 (Fla. 2d DCA 1996) (presumption rebutted where wife testified as to estate-planning purpose, but husband failed to present any evidence contradicting such purpose); see also, Kronfeld v. Kronfeld, 761 So.2d 411, 412 (Fla. 3d DCA 2000) (holding that in determining equitable-distribution scheme, husband was entitled to $300,000 credit against lump-sum amount due his wife because he had paid $300,000 to satisfy lien on marital home during separation period; husband overcame gift presumption by proving that he was not making contribution to intact marriage, but was satisfying corporate debt owed by parties that encumbered business owned solely by husband).

The really problematic area created by the statute’s addition of a gift presumption to personal property is how it may affect “commingling” claims involving joint accounts. In one of the leading cases rejecting the existence of a gift presumption as to jointly titled personalty under the prior statute, Archer v. Archer, 712 So.2d 1198 (Fla. 5th DCA)

The Archer court’s conclusion, however, was based on its holding that the prior statute’s gift presumption “clearly extends only to real property,” and that the prior statute did “not contain a similar presumption for personal property.” Since the statute now does contain such a provision, it appears that even “traceable” nonmarital assets within an entireties account will become presumptively marital. Certainly it could be argued that if specific assets can be traced to nonmarital sources, and there is no other contradicting evidence, then gift presumption should be overcome. Other pre-amendment factors, such as control over the asset, and the length of the marriage, see, e.g., Grieco v. Grieco, 917 So.2d 1052 (Fla. 2d DCA 2006) may also retain some relevance to overcoming the new gift presumption in entireties accounts. However, the burden of producing “clear and convincing” proof that no gift was intended will be on the spouse seeking to keep an asset nonmarital. If the real property gift presumption case law is any indication, virtually any credible testimony from a spouse -to the effect that the couple considered all the contents of an entireties account “ours” – will defeat a spouse’s attempt to overcome the gift presumption.

Even assuming that the difficulty that the “clear and convincing evidence” standard will present in overcoming the gift presumption, it does not follow that the commingled/traceable asset dichotomy will simply disappear under the new statute. Left open for debate under the new statute is how accounts titled as joint tenancies with rights of survivorship should be treated. The new gift presumption applies by its

—-[A]s between the debtor and a third-party creditor . . . , if the signature card of a bank account does not expressly disclaim the tenancy by the entireties form of ownership, a rebuttable presumption arises that a bank account titled in the names of both spouses is held as a tenancy by the entireties as long as the account is established by husband and wife in accordance with the unities of possession, interest, title, and time and with right of survivorship.

Beal Bank, SSB v. Almand and Associates, 780 So.2d 45, 58 (Fla. 2001). Thus, the practitioner should check the actual bank documents regarding exactly how the account is titled, as there is a potential possibility that an account simply titled in two names without further elaboration will be presumed to be an entireties account. Compare, Crouch v. Crouch, 898 So.2d 177, 182-84 (Fla. 5th DCA 2005) (refusing to recede from Archer and rejecting argument that Beal Bank analysis had any proper application to equitable-distribution scenarios). Exactly how “survivorship” accounts will be handled under the new statute is unclear, but the “commingled/traceable” dichotomy may still retain significance as to such accounts.

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