When planning tax strategies, consider Florida property division law
by
Daniel M. Copeland on Feb. 16, 2015
Summary: Financial advice that works well at tax time may prove to be disastrous when divorce enters the picture.
Though many Florida couples with high-value assets may have no intention of calling it quits on their marriages, it may be prudent for them to consider worst-case scenarios when planning their financial future.
Financial advisors often help couples avoid excess taxes by combining their assets. This works well, as long as the couple stays together. If the couple, for whatever reason, goes through a divorce, this advice can turn what was a gold mine into a disaster. Because these assets were combined for tax purposes, judges may consider all such assets the common property of both spouses. If that happens, the person who was the original owner of that asset may lose the right to claim it as his or her own in the divorce settlement.
High-wealth Florida couples may wonder how they can protect their individual assets in case they later divorce. Prenuptial agreements or postnuptial agreements may protect these couples from losing their original property while still saving money on taxes.
Before undertaking tax protection strategies with their financial advisor, these couples may want to consider signing a prenuptial or postnuptial agreement, so that their individual assets can be safe in case of divorce. Avoiding the cost, both emotional and financial, of a lengthy court battle over asset division by implementing a prenuptial or postnuptial agreement before the assets are combined for tax purposes can be a wise financial decision for Florida couples.
