For many Florida residents, protecting their family’s future is a top priority. Whether the Florida resident has inherited property, investments, or other assets from a parent or relative, they want to ensure those assets benefit their children or chosen heirs. However, unexpected life events, such as divorce, can threaten even the most carefully made plans.
If a Florida resident is concerned about how a pending or ongoing divorce could impact their assets or their ability to provide for their heirs, it is essential to seek guidance from attorneys experienced in both Florida divorce (dissolution of marriage) and estate planning matters.
Understanding Separate vs. Marital Property in Florida
Under Florida law, most assets acquired during the course of a marriage are considered marital property and are subject to equitable distribution during divorce proceedings. However, inherited assets are generally treated as separate property, so long as they have not been mixed (commingled) with marital assets.
If one receives an inheritance that remains solely in their name, and they avoid using those funds for marital expenses or placing them in a joint account, one can usually preserve that inheritance as separate property. In doing so, one can retain full control over these assets and can later transfer them to their heirs according to their wishes.
The Risk of Commingling Assets
Issues arise when inherited funds or assets become commingled with marital property. For example, if an individual deposits inherited money into a joint account used to pay household bills, mortgages, or vacations, those funds may lose their separate status. As a result, that individual’s inheritance could become subject to division during divorce.
Even if commingling occurs, it may still be possible to argue that some portion of the inheritance remains separate. However, proving this in court requires strong documentation and skilled legal representation.
Estate Planning Strategies to Protect Children’s Inheritance
If a Florida resident wants to shield assets for their children or beneficiaries, proactive estate planning is crucial. Caserta & Spiriti, as well as any other knowledgeable Florida divorce and estate planning attorneys, can help Floridians of all financial backgrounds, not just the wealthy, use estate planning tools to secure their assets. Some options to consider include:
- Trusts: Establishing a revocable or irrevocable trust can protect assets from equitable distribution and ensure they are passed down according to the subject person’s wishes.
- Prenuptial and Postnuptial Agreements: These agreements clearly define the treatment of inherited or premarital property in the event of divorce.
- Gifting Strategies: In some cases, lifetime gifting can help transfer wealth directly to heirs outside of divorce proceedings.
- Account Segregation and Proper Titling: Keeping inherited assets in separate accounts, without mingling them with marital funds, is vital for maintaining their protected status.
Reviewing Marital and Separate Property
As part of the divorce process, all marital assets and liabilities must be identified and equitably divided. These assets may include real estate, investment accounts, retirement accounts, business interests, and more. By working with experienced divorce and estate planning attorneys, a Floridian can better understand how the court may categorize and divide assets and develop a strategy to protect their family’s future.
Plan Ahead to Protect Your Legacy
The choices one makes during a divorce will have a lasting impact. With careful planning and the right legal support, a Florida resident can protect their hard-earned assets and ensure they are preserved for the next generation.
The foregoing is a brief and general overview of the topic and the need for specific and experienced legal and tax advice is emphasized.
At CASERTA & SPIRITI, our team is here to provide you with trusted guidance through divorce and estate planning matters. If you have questions or would like to schedule a confidential consultation, please contact our Miami Lakes office today.