There are several ways in which a divorce can impact a spouse’s finances. The first is through direct costs. People have to pay for legal representation and time in the courts. In some cases, one spouse may have to provide financial support to the other. Orders of child support are common when people have children together. Alimony may also be necessary to help one spouse regain their financial independence after divorce.
Additionally, people have to prepare for the impending reduction of their overall resources. Most marital assets are subject to division under Florida’s equitable distribution rules. Spouses have to divide their property in a manner that is fair given the situation. They can potentially protect some of their resources from distribution by claiming them as separate or non-marital assets.
What property can people generally preserve as separate when they divorce?
Assets protected in a marital agreement
Prenuptial agreements have become much more common in recent years. With people marrying later in life and both spouses working, there is more reason to address financial matters proactively before getting married. People preparing for marriage sometimes designate certain assets as separate property to preserve those resources if they eventually divorce. Businesses, retirement accounts and even real property can become non-marital assets because of a valid marital agreement.
Property owned before marriage
Many people enter marital relationships with valuable property. Provided that they keep those assets separate from the overall marital estate, they may be able to claim them as non-marital property when they divorce. Not only are the assets themselves separate property, but any income or interest that they generate during the marriage may also remain separate property. Commingling can be a concern when people enter a marriage with valuable property. Sharing access or control of existing assets can endanger the status of separate property.
Inheritances and non-spousal gifts
If someone dies and leaves property to one of the spouses, the inheritance that they receive is their separate property. Even if estate administration occurs during the marriage, the spouse who inherits property can likely retain their inheritance after the divorce. Gifts can also be separate property depending on who gives the gift. A gift made from one spouse to another could be part of the marital estate. However, gifts received from outside parties, including friends or parents, may remain the separate property of the spouse named as the recipient of that asset.
Identifying separate property and gathering financial records to preserve non-marital resources can be important steps for those preparing for divorce. Those trying to ensure their financial stability after divorce may need help determining what resources they can protect, and that’s okay.
