When it comes to property division in a divorce, Florida is an “equitable division” state. While this means that the judge will divide marital assets “equitably” this does not necessarily mean that marital assets will be divided equally.
Equitable division means that a judge will weigh a number of factors in deciding how to divide marital property, including:
To better understand how marital property will divided in a Florida divorce, it’s helpful to first understand what property will be divided in a Florida divorce.
“Marital property” is property acquired by either spouse during the marriage. Marital property is jointly owned by both spouses and will be divided by the court during the divorce process. A divorcing couple will often agree on how to divide most, if not all of the marital assets. When the parties to a Florida divorce cannot agree on how to divide property, the court will step in to divide marital assets in a way that is “fair.”
“Separate property” is property that was owned by either spouse before the marriage and may include an inheritance received by either spouse (either before or during the marriage), a gift received by one spouse during the marriage, or payments received for pain and suffering in a personal injury settlement.
To be considered separate property, the spouse that owned the asset before the marriage must have preserved the separate nature of the asset. This may mean keeping the asset titled in that spouse’s name alone or, if the asset is an account, keeping that account separate.
However, separate property loses its status as separate if it becomes comingled with marital property.
Property acquired during the marriage will be considered marital property, regardless of how the property is titled.
Once the court has determined which assets are marital property and which are not, a monetary value will be assigned to each item. In many cases, especially for high-net worth individuals, it is necessary to hire a professional appraiser to fairly value the asset.
Retirement accounts and other financial assets can be difficult to value because of the speculative nature of investments and the market. A CPA or actuary is often hired to fairly assess the value of these items.
Both spouses need to consider the tax implications of a particular asset in divorce. In some cases, once the tax consequences have been analyzed, it may not make sense to fight over a particular asset. This can be particularly true of the marital home.
The marital home is often one of the most controversial aspects of a divorce, second only to concerns about child-care and child custody. The house is more than just an asset or a place to live – it takes on a greater significance as a symbol of the family that was.
However, without careful planning, the marital home can easily become a liability.
A house can be difficult and expensive to maintain, especially when you shift from a 2-income household to a single-income one. Also, you’ll likely need to refinance the house to buy-out your spouse’s interest in the home and consider maintenance issues that may not have been addressed while your marriage was deteriorating.
There are also tax consequences to consider. As a married couple you can exclude up to $500,000 in capital gains tax. But as a single person, you can only exclude up to $250,000 for the sale of the house and you will be taxed on any gains beyond that amount. Selling the house while you are still married might save you from having to pay additional taxes.
For high net worth couples who are dividing assets worth millions, it’s important to work with an experienced Florida divorce attorney who understands the complexities of divorce and property division in complex estates. High net worth couples often have much to gain by keeping a divorce civil and discreet.
By creating a divorce plan, a high net worth couple can avoid conflict in their divorce, saving themselves significant amounts of money in the process. By keeping the divorce out of the courtroom and negotiating all aspects of a divorce, high net worth families maintain control over the division of assets and can lay the groundwork so that both spouses have a strong financial foundation for the future.
Keeping your divorce out of the courtroom allows you to actively participate in shaping the divorce agreement, which gives you the freedom to create a customized division of assets that will work best for you and your family.
Of course, more assets require that more money be spent in appraising and valuing those assets. However, this is often money well spent. By working together, a divorcing couple can agree on most, if not all of the issues in the divorce, thereby saving you money that will be divided between you and your spouse or passed on to your children and grand-children.
By keeping your divorce out of the public eye and collaborating with your spouse in a high-net worth divorce you and your spouse maintain control of your financial future and avoid public scrutiny and exposure.
The Jacksonville, Florida law firm of Elrod & Elrod has extensive experience handling property division and high net worth divorce cases and has the tools to help you through this difficult time. The firm has proudly served the Jacksonville, Florida metropolitan area since 1966, and represents people in Baker, Bradford, Citrus, Clay, Columbia, Duval, Flagler, Hamilton, Marion, Nassau, Putnam, St. Johns, Sumter, Suwannee, and Union counties.
Contact an experienced northeast Florida divorce lawyer at Elrod & Elrod today. Call 904-356-1282, email firstname.lastname@example.org, or complete our online form.