Divorce may mean something different to everyone, but for most, it is legal process that can have a considerable impact on one’s future – especially their financial future. From both a short-term and long-term perspective, divorce in many ways can redefine the finances of an individual after they’ve been interwoven with their spouse. As divorce attorneys, it is our job to do the unraveling.
To help you gain a better understanding of the financial aspects of divorce, we’ve put together a list of some of the most common finance-related issues divorcing spouses commonly address in their cases:
- Spousal Support – Spousal support, or alimony, is paid by one spouse to the other, and it’s one of the most well-known aspects of divorce. In Florida, there are several different types of alimony, including temporary alimony that’s paid during divorce proceedings, rehabilitative alimony to assist a former spouse as they improve their employability, and durational and permanent alimony awarded after divorce. Alimony is based on factors such as each spouse’s earning potential, employment history, the length of a marriage, and more. Spouses also have the ability to reach agreements on their own regarding alimony, such as lump sum payouts or awarding property instead.
- Child Support – Florida family courts go to great lengths to ensure the needs of children are met, and will always make decisions that are in their best interests. As such, child support is a factor in any divorce involving minor children, and it is calculated using an income shares model that gauges the amount of financial support parents would provide children in a single-family household, as well as factors such as income, the overall financial situation of each parent, and the child’s individual needs.
- Property Division – Florida views all income and assets obtained during a marriage as marital property, and anything received by gift or inheritance, or owned prior to marriage, as separate property. In divorce, marital property, which can include many different types of assets, will be divided between spouses using an equitable distribution model, which means fair and just, not specifically equal. Spouses who are able to communicate and negotiate settlements have tremendous power in how they choose to divide property. For example, they may exchange marital property shares of certain assets for others (i.e. the family home), or may use assets to offset alimony.
- High Net Worth – Divorces involving spouses with significant wealth, many assets, and unique and complex financial investments or obligations are more challenging than a “standard” divorce where spouses may not have any significant assets, or where the family home is the largest asset they own. In high asset divorces, the need for accurate valuation and creative solutions is critical, as is the ability to address unique financial concerns with a spouse’s rights and interests in mind.
- Real Estate – As mentioned, real estate can be considered marital property subject to division. However, matters involving real estate can become complex, particularly when a once separate property home becomes community property, when spouses own multiple homes or rental properties, and when real estate holdings are complex or of significant value. The need for experienced advocacy and professional assistance in addressing real estate issues is critical to making informed decisions, especially in terms of property division, taxes, and future implications.
- Debt – Most people generally know marital assets are on the table for property division in divorce. However, those “assets” also include debts and existing obligations spouses may have had during their marriage. Satisfying debts or addressing issues such as student loans can be a challenging part of the divorce process that can have a major impact on either party’s financial future.
- Hidden Assets – The hiding or concealment of assets can and does happen in divorce, which is why it is worth noting as potential financial issue to consider. At the very least, divorcing spouses should understand that hiding assets is something they should never do, as it can cost them in the long run. Spouses who suspect their partner may be concealing assets should also work to protect their rights with attorneys skilled in forensic accounting and addressing complex financial disputes.
- Taxes – Taxes are indeed a concern in divorce, particularly in matters involving alimony and property division. This includes the division of complex assets like stocks or retirement accounts, as well as the division of real property like a family home. As we have mentioned on our blog, the way alimony is taxed will soon change under a new U.S. tax law, which is why it is important to understand the tax implications of any decision you plan to make in your divorce.
- Retirement – Retirement accounts are often overlooked when it comes to property division, but they are considered marital property, in whole or in part, depending on the circumstances. Dividing retirement accounts is a very difficult process that requires not only negotiation with spouses, but solutions permitted by both the court and the administrator of the retirement plan. Different types of retirement accounts will also pose their own challenges. While retirement accounts are divisible in divorce, some spouses may choose not to divide them, or to make up any small difference through a buyout or by awarding other assets.
- The Process Itself – In the haze of unfamiliar laws and proceedings, many spouses tend to forget that the divorce process itself is a financial issue unto its own. While there is value in working with experienced professionals who provide a much needed service to protect your rights and interests, and ultimately work to protect your finances, it is important to remember divorce costs money, including various fees and court-related costs. Fortunately, spouses have the ability to keep divorce expenses in check, particularly if they can work together to negotiate rather than litigate , or approach the process through mediation or collaborative divorce. Our firm has experience to help clients however they choose to resolve their case, and is comprised of proven and Board Certified lawyers, as well as a Supreme Court Certified Mediator.
If you are considering divorce and have financial concerns, you are certainly not alone. However, because those concerns are warranted, it is important to work with experienced attorneys who can guide you through the process and address the unique financial aspects of your divorce. At Schuttler, Greenberg & Mullins, LLC, that’s precisely what our award-winning Boca Raton divorce attorneys have been doing since 2004.
To speak with an attorney about your Florida divorce, contact our firm today.