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Separated Money And Assets During Divorce

How to Protect Assets From Divorce in Florida

The Spence Law Firm June 5, 2024

Divorce is an emotionally and financially taxing experience. Protecting your assets during this process is key to ensuring a stable financial future for yourself post-divorce.  

In Florida, the division of assets follows the principle of equitable distribution, meaning that assets will be divided fairly, though not necessarily equally. The equitable distribution approach considers a range of factors to determine what is fair for both parties involved.  

These factors include the length of the marriage, the economic circumstances of each spouse, contributions to the marriage (both financial and non-financial), and the responsibilities each spouse will have towards any children from the marriage.  

Understanding the steps you can take to safeguard your assets before and during a divorce can significantly impact your financial standing. The following are some ways to protect your assets during a divorce in Florida: 

Prenuptial and Postnuptial Agreements 

One of the most effective ways to protect your assets is through a prenuptial or postnuptial agreement. A prenuptial agreement is a contract signed before marriage that outlines the distribution of assets in the event of a divorce.  

Similarly, a postnuptial agreement is established after marriage but serves the same purpose. These agreements can specify which assets are considered separate property and how marital property should be divided, offering a clear plan that can avoid lengthy and contentious court battles. 

Keeping Your Assets Separate 

To protect your assets, it's essential to keep personal or premarital assets separate from marital assets. Keep bank accounts, inheritances, and gifts you received individually separate from joint accounts.  

Commingling, or mixing personal assets with marital assets, can make it challenging to prove the original ownership of the assets.  

For example, if one spouse receives an inheritance and deposits the funds into a joint bank account used by both spouses for household expenses, those funds could be considered marital property. Another example is using funds from a premarital savings account to purchase a family home. By mixing these personal funds with marital investments, the distinction between personal and marital property becomes blurred, which could complicate the asset division process during your divorce. 

Detailed record-keeping can help maintain the distinction between personal and marital property. 

Financial Transparency and Documentation 

When both spouses maintain transparency, it reduces the likelihood of either party attempting to conceal assets, leading to a more straightforward and amicable resolution. By being open and honest about all financial matters, both parties can ensure a fair and equitable distribution of assets.  

This honesty helps in preventing misunderstandings and disputes that can arise from hidden or undisclosed assets. Financial transparency promotes trust and cooperation, making the divorce process smoother and less contentious. It also allows for proper documentation and verification, which is essential in demonstrating the nature and value of assets to be divided.  

Proper documentation can help prove the existence and ownership of assets you aim to protect. Maintain thorough records of all financial transactions, including bank statements, investment accounts, real estate holdings, and other valuable assets. 

Utilizing Trusts and Other Legal Tools 

Setting up trusts and other legal instruments can offer an additional layer of protection for your assets. Trusts can shield certain assets from being considered marital property, thus safeguarding them during a divorce.  

By transferring ownership of specific assets to a trust, you essentially remove them from the marital estate, making them less susceptible to division. Also, there are different types of trusts, such as irrevocable trusts, which cannot be altered once established, providing a more robust shield against claims during divorce proceedings.  

Implementing other legal tools, like family limited partnerships (FLPs) or limited liability companies (LLCs), can further fortify your asset protection strategy. These entities can manage and control assets in a manner that keeps them distinct from marital property, ensuring that they remain under your control.  

An FLP is a type of partnership specifically designed to manage and control family-owned assets while providing a degree of protection against claims in divorce proceedings. In an FLP, family members are either general partners or limited partners, with the general partners having control over asset management and decision-making. This structure allows assets within the FLP to stay within the family, reducing the chances of them being divided as marital property. 

Similarly, an LLC is a flexible corporate structure that limits personal liability for its owners while offering various tax benefits and asset protection. By forming an LLC, you can separate personal assets from business assets, protecting them from claims made during divorce. The LLC structure can provide more control over how assets are managed and distributed, ensuring that they remain distinct from the marital estate. 

These legal entities are particularly advisable for individuals with substantial family-owned assets or businesses. Those with considerable personal wealth, real estate holdings, or complex financial circumstances may also benefit from forming FLPs or LLCs.  

Consulting with a knowledgeable attorney can help determine whether these options are suitable for your specific circumstances and guide you through the setup and maintenance processes. 

Seeking Professional Legal Guidance 

Effectively protecting your assets in a divorce requires experienced legal counsel. An asset protection attorney can guide you through the legal landscape, helping you draft agreements, manage separate assets, and strategize for the best possible outcome.  

At The Spence Law Firm, our team can provide personalized advice to protect your financial interests during a divorce. 

Contact The Spence Law Firm to speak with an experienced Orlando divorce attorney who can help you protect your assets and take control of your financial future. We serve clients and families throughout Orange County, Florida, and the surrounding areas including Oak Ridge, Pine Hills, Lockhart, Maitland, Azalea Park, Osceola County, Lake County, & Seminole County.