Divorce in Florida: How to Prepare Financially

Going through a divorce is never easy — beyond the emotional challenge of separating from a partner, you also have to go through the long, complicated, and time-consuming legal process of divorce. But the good news is that things aren’t entirely out of your hands. The more research and preparation you do, the more likely it is that you’ll end up with a favorable financial outcome. 

While we’ve covered divorce and financial planning from a general perspective before, in this article, we’ll be diving more into the financial implications of getting a divorce in Florida specifically. Read on to learn what to expect when getting a divorce in Florida, which areas of your finances could be impacted, and how to protect your interests. 

Options for Divorce in Florida

There are a few different options available for couples seeking a divorce in Florida: 

Simplified Dissolution of Marriage/Non-Contested Divorce 

One of the simplest options is called a simplified dissolution of marriage, or a non-contested divorce. While this method tends to be simpler and more cost-effective than others, only couples who meet a specific set of criteria can qualify for it. Both parties in the marriage must: 

• Agree to pursue the process 
• Not have dependent children (including adopted children) under the age of 18 
• Not be pregnant 
• Agree on how to divide all property and debts 
• Not seek alimony 

Mediation

If you and your spouse don’t yet agree on how to split things but are still seeking a relatively straightforward and economical divorce, you may want to consider mediation. Those who pursue this option work with a neutral third party (not necessarily a lawyer) to mutually come to an agreement on how to split property and debts. 

Collaborative Divorce 

Collaborative processes are more involved than the previous two options, but significantly less so than trial proceedings. With this process, you and your spouse each hire your own attorney and sign an agreement stipulating that you won’t go to court. Instead, you’ll come to an agreement on how to split debts and assets through a series of meetings and discussions. 

Trial 

While the three options above are usually simpler, faster, and less expensive, trials are sometimes necessary, particularly in cases of contentious splits or complex financial situations. In divorce trials, each party hires an attorney to present evidence and call witnesses before a judge, who will ultimately make the decision on all contested issues. 

What’s Up for Discussion & How It’s Settled 

So what exactly is at stake in a divorce in Florida, and how do things get split up? Let’s walk through a few of the more common items and how they are decided in court. Even if you’re not going to trial, understanding the key factors can help you protect your financial interest. : 

Alimony/Spousal Support in Florida 

Alimony, also called spousal support, refers to payments made from one former spouse to another following a divorce to help support them. One of the tricky things  about divorce in Florida is that alimony is very unpredictable. 

Unlike some states, Florida doesn’t have any concrete guidelines around when alimony should be awarded and if so, how much. Instead, it’s entirely at the discretion of judges — the same exact case could get 10 different decisions in 10 different county courts. 

The most common type of alimony granted is permanent alimony which, as its name suggests, is paid indefinitely unless a court orders it to be stopped. If no such order is made, the payments will continue until either a) one of the parties dies or b) the party receiving alimony remarries or enters another financially-supportive relationship. 

A few of the main factors judges take into account when considering alimony include: 

• The length of the marriage
     – The longer a marriage is, the more likely alimony — especially permanent alimony — is. At seven years or more, permanent alimony is possible; at 10 years or more, it’s likely; and at 17 years or more, it’s almost certain. 
• Each spouse’s:
       – Income
       – Other financial resources (e.g. trust funds, inheritances, etc.)
       – Age & health
       – Contributions to the marriage (e.g., financial contributions, childcare, household maintenance, etc.)
       – Earning capacity & educational background
  – Behavior
  For example, a judge may be more likely to order a spouse that’s had an affair to pay alimony 

Tip: When factoring alimony into your post-divorce financial forecast, note that any payments made won’t be tax-deductible, nor will payments received be considered taxable income if a new settlement or agreement was reached on January 1, 2019, or later, per the Tax Cuts and Jobs Act.1 

Child Support in Florida 

Unlike alimony, the rules for determining child support — the payments one former spouse makes to another to help financially support their children — are much more cut-and-dried. When it comes to divorce in Florida, child support operates on an income-share model. 

Under this model, courts attempt to estimate how much money a couple would have spent on their children for things like health insurance, taxes, employment-related daycare costs, and basics like food (but not necessarily all existing household expenses) had they not split up — then, they divide those payments up according to each parent’s take-home income.  

Beyond income, courts may also consider the following when determining child support: 

• Additional needs of the child or children 
• Number of children
     – Note, however, that the number of children isn’t proportional to an increase in payment 
• Spousal behavior (e.g., adultery) 
• Annual number of overnights spent with each parent 

You can find online child support calculators to help give you an idea of what your child support payments might come out to, but keep in mind that: 

• They don’t always work well if one parent’s income is too high or too low 
• The court may choose to increase or decrease the payment
     – Courts can increase or decrease that payment by less than 5% at their discretion, or by 5% or more if justified in a written explanation (although this isn’t as common) 

Of course, with inflation rampant and not all household expenses factored in, there’s a good chance that child support payments alone won’t be enough to cover all of the costs associated with raising a child. You may need to make some tough decisions about what to cut and how to save for college. 

Division of Property in Florida 

Divorce in Florida results in the division of marital assets and debt only — in other words, any assets or debts acquired by either party within the duration of the marriage. Anything acquired before or after will not be divided, nor will gifts between spouses or assets (such as cars or houses) that are titled in only one spouse’s name. 

Assembling your own professional divorce team with a fee-only financial advisor, who is also a CERTIFIED FINANCIAL PLANNER™, is an important step during the divorce process. This financial advisor should be able to help you coordinate matters with other divorce team professionals, such as a family law attorney, Certified Public Accountant (CPA), forensic CPA, or valuation specialist. While coordinating with your team may seem daunting, you will want to engage various professionals who can represent your interests and assist you in making informed decisions. 

Typically, the divorcing couple will first work with their divorce advisory services team to decide what is and is not marital property (and therefore, subject to division), then determine what each asset is worth with the help of an appraiser or CPA. That information will be passed along to a court so that they can make an equitable — but not necessarily equal — division. 

To make this decision, courts will consider: 

• Length of the marriage 
• Economic circumstances of each party 
• Contributions to the marriage by each party 
• Whether or not there was any intentional wasting of assets — such as money spent on an affair with another partner — in the years leading up to the divorce 

A couple of key assets that are subject to division include: 

Homes/Primary Residences 

There are usually three settlement options for divorcing couples when it comes to the family home: 

• Continue to co-own the home 
• Sell the home together and split the proceeds 
• Have one spouse buy the other out so they can continue residing in it  

Sometimes, a court may rule that one party should stay in the family home for the benefit of the children, but keep in mind that this can bring with it some unwanted costs — particularly in Florida where real estate is expensive and property taxes and homeowners insurance are high. 

Retirement Plans 

In accordance with the definition of marital property, only contributions made to a retirement plan during a marriage are subject to division. You’ll detail exactly how you plan to divide these contributions by filing a Qualified Domestic Relations Order (QDRO). 

Tip: Remember, different types of retirement accounts carry different tax implications — contributions made to traditional IRAs and 401(k)s will not have been taxed, but contributions made to Roth IRAs and Roth 401(k)s will have been. 

What You Can Do

You might be wondering: are there any particular divorce financial strategies you can implement to help ensure the best outcome possible? The truth is, divorce and financial planning should always go hand-in-hand — so if you haven’t yet filed, or are still in the early stages of filing, consider the following steps.  

Take Stock of Your Finances 

To protect your financial interests, you’ll need to have a comprehensive understanding of your current financial situation. Here are a few things that you’ll want to gather and take note of:  

• Paystubs for you and your spouse (for at least the current and previous year) 
• Tax returns  
• Retirement account statements and details 
• Investment account statements and details 
• Checking, savings, and credit card account statements
     – Beyond simply looking at how much you have in these accounts, look at spending too — it can help give you an idea of what your expenses could look like after the divorce 
• Mortgage statements 
• Estate planning documents 
• Social security numbers and benefits statements for you and your spouse 
• Employer benefit summaries for you and your spouse, including health insurance plans, life insurance plans, stock options, pensions, and accrued paid time off 
• Business interests 
• Credit card points 
• Titles and deeds 
• Debts and outstanding collections (e.g. credit cards, mortgages, tax liabilities, workplace loans, unregistered debts)
     – Run a credit report on both yourself and your spouse using a site like Credit Karma or Annual Credit Report to make sure you don’t miss anything  

Anything you uncover should be included in your financial affidavit, which will be referenced heavily throughout the divorce proceedings. 

Prepare for Your New Financial Reality 

In all likelihood, your post-divorce finances will look quite different than they do now — and that might necessitate some lifestyle changes. You may want to ask yourself some questions like: 

• Do I need to go back to work? Do I need to go back to school so I can find a better-paying job? 
• Am I on track to retire at my desired age? If not, when can I afford to retire? 
• Can I afford to stay in the family home? How will I pay for my kids’ education? Will they qualify for financial aid? How will (or should) my earnings and spending change once I’m single? 
• Can I keep my current health insurance plan? What changes, if any, do I need to make to my personal financial strategy? 

Work With a Financial Advisor 

No matter how you slice it, divorce almost always carries significant financial implications. The best way to increase your odds of a favorable financial outcome is to work with a professional. While hiring a financial advisor does require an investment, they can help: 

• Empower you with knowledge and level the playing field: In many marriages, one spouse is more involved with finances than the other. When this is the case, the spouse without as much financial know-how can be at a significant disadvantage in the divorce. Working with a financial planner can help financial novices get up-to-speed without being overwhelmed. 
• Removing the emotion from decisions: Divorce is already emotional — you don’t want it to be any more taxing than it has to be. Financial advisors help their clients gather the concrete facts and figures they need to make decisions based on logic rather than emotion, resulting in a more manageable, less draining process. 
• Visualize different scenarios: With their knowledge, experience, and access to advanced financial planning software, financial advisors can run through what different potential settlement outcomes would look like. 
• Set you up for future financial success: The more information you have, the better you can make decisions — and the sooner you make them, the sooner you’ll get back on track for your short and long-term financial goals. 

Read more: Five Things Women Going Through a Financial Transition Should Know 

Looking for a financial advisor to assist you in your divorce? Team Hewins is here to help. With locations in South Florida, and the San Francisco Bay area, the CERTIFIED FINANCIAL PLANNER™ professionals at Team Hewins have years of expertise and a third-party perspective. You can rest assured that your financial future is in good hands — giving you one less thing to worry about.  Reach out now to schedule a free 15-minute consultation. 

1. Fishman, Stephen J. “The Tax Cuts and Jobs Act: Key Changes for Individuals.” www.nolo.com, 27 Sept. 2022, www.nolo.com/legal-updates/the-tax-cuts-and-jobs-act-key-changes-for-individuals.html. 

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