Are You Prepared For Divorce Taxes And Estate Planning In Florida? We Can Help!
Are you facing the complexities of divorce taxes and estate plans in Florida and worried about the financial implications it may bring? In the state of Florida, understanding the intricacies of divorce taxes and estate planning is crucial to safeguarding your assets and securing a stable future. That’s where Figueroa Law Group comes in.
Our dedicated legal team in Florida has extensive experience navigating divorce taxation and crafting effective estate plans tailored to your unique circumstances. We prioritize personalized solutions, ensuring that your interests are protected every step of the way.
Don’t let divorce leave you financially vulnerable. Contact Figueroa Law Group today and take control of your financial future.
Florida Law Regarding Wills, Trusts, and Ex-Spouses
Under Florida law, the impact of divorce on wills, trusts, and ex-spouses is clearly defined. According to Florida Statute § 732.507, any provision in a will that affects a spouse becomes void upon divorce, dissolution, or annulment of the marriage. This means that even if someone passes away without removing their ex-spouse from the will, the divorce itself renders any inheritance towards the former spouse null and void.
Similarly, when a spouse is named as a beneficiary of a trust, Florida Statute § 736.1105 states that unless explicitly specified otherwise in the trust instrument or divorce judgment, any provision of the trust that affects the ex-spouse becomes void upon divorce. If an individual fails to remove their ex-spouse as a beneficiary after divorce and subsequently passes away, Florida law prohibits any funds from being allocated to the ex-spouse. From the moment of divorce, the ex-spouse forfeits any entitlement to trust benefits.
These statutes serve to protect individuals from unintended consequences and ensure that their estate planning wishes are honored following divorce. It is essential to review and update your wills and trusts to reflect changes in marital status and safeguard your assets according to Florida law.
What About Non-Probate Assets?
When it comes to estate planning and divorce in Florida, it’s essential to understand the treatment of non-probate assets. These assets bypass the probate process and typically involve naming a beneficiary in the event of your death. Here are some key points to consider:
- Life insurance policies: Proceeds from life insurance policies go directly to the named beneficiaries.
- Payable-on-death bank accounts: These accounts transfer to the designated beneficiary upon your death.
- Individual retirement accounts (IRAs): IRA funds are distributed to the named beneficiary.
- Employee benefit plans: Benefits from employer-sponsored plans, such as pensions or 401(k)s, are received by the designated beneficiary.
- Qualified annuities: Annuity contracts often have designated beneficiaries who receive the funds.
According to Florida Statute § 732.703, similar to wills and trusts, non-probate assets are voided as to ex-spouses at the time of divorce. However, certain conditions must be met:
- The estate plan and beneficiary designation must have been established before the divorce.
- The divorce must be finalized. If someone passes away while the divorce is pending, the soon-to-be-ex-spouse may still be entitled to inherit the non-probate asset.
Understanding these nuances is crucial to ensure your assets are protected and distributed according to your wishes. Seek the guidance of our estate planning attorney to navigate the complexities of divorce, estate planning, and non-probate assets effectively.
Estate Planning Checklist For Divorced Couples
Here are some important points to consider when updating your estate planning documents after a divorce:
- Powers of Attorney and Advanced Directives: Review and revise your durable power of attorney and healthcare power of attorney. You may no longer want your ex-spouse or in-laws to be the named party.
- Will: Your existing will may no longer accurately reflect your current assets or wishes. It is crucial to update your will, revisiting decisions related to guardianship, executors, and the division of assets.
- Trusts: If you have trusts for your children or a living trust for yourself, consult with an attorney to revise them accordingly. You may have previously named your ex-spouse as the trustee, but it is essential to reconsider whether you still want them to have control over the trust assets or funds.
- Retirement, Payable-on-Death, and Other Accounts: Review the beneficiaries designated on your retirement accounts, bank accounts, life insurance policies, and investment accounts. While many institutions automatically nullify an ex-spouse’s interest, it is still important to update these designations to ensure they align with your current wishes.
Understand that certain documents and accounts may need to be updated after the divorce is finalized. Seek guidance from our estate planning and divorce attorney to determine what changes are permissible. Remember, updating your estate planning documents after a divorce is essential to reflect the changes in your life and relationships, safeguard your assets, and ensure your wishes are accurately reflected.
What About Taxes and Divorce in Florida?
Finalizing a divorce in Florida could take anywhere from a minimum of 30 days, in the case of simplified and uncontested divorces, to several years for more complex marital dissolutions. This period is extensive because divorce is not merely about terminating marital ties, it’s also among the most impactful financial decisions one can make, with taxation being a key aspect.
How Divorce Alters Your Tax Filing Status
While still married, couples are permitted by the IRS to file tax returns jointly. However, once divorced, you would be required to file tax returns singly or as the head of your household. A side effect of this change is that deductions such as those related to shared mortgage interest payments or exemptions for dependents are no longer accessible.
Increase in Taxable Income
The process of splitting marital assets during divorce proceedings might increase each party’s taxable income. Take the case of alimony, which is viewed as taxable income by the IRS. In addition, any money earned from selling assets, like jointly-owned properties, could be subject to tax.
Medical and Dental Expenses Could Be Deductible
Following the completion of the divorce process, you might be eligible to deduct unreimbursed medical and dental expenses, assuming they exceed 10% of your adjusted gross income (AGI). Notably, spousal or child support payments made by your ex-spouse following a court order may not be included in your AGI.
Availability of Tax Credits
As a divorced individual, you might be eligible for the Earned Income Tax Credit (EITC), generally offered to individuals with qualifying children who fall within specific income thresholds. If you solely provide care for a dependent child or contribute to over half of their upkeep, you also stand a chance of qualifying for the Child Tax Credit (CTC).
Implications of Retirement Benefits and Investment Accounts
Typically, retirement accounts such as 401(k) plans, IRAs, Roth IRAs, and similar investments are considered marital assets liable to division upon divorce. The terms of your divorce settlement will determine this division. For example, if your ex-spouse is to get a portion of your 401(k), they’d need to transfer these funds to their personal retirement account, a process that could be marred by early withdrawal charges and tax penalties.
How A Divorce and Estate Planning Attorney in Florida Can Help?
When facing a divorce in Florida, having a skilled and experienced divorce attorney by your side can make all the difference. Here’s how our divorce and estate planning attorney from Figueroa Law Group can assist you:
- Provide knowledgeable guidance throughout the entire divorce process, helping you understand your rights and options.
- Offer unbiased advice, considering your best interests and long-term goals, while keeping emotions in check.
- Negotiate with the opposing party to achieve favorable settlements on issues such as property division, child custody, and spousal support.
- Handle the extensive paperwork involved in divorce proceedings, ensuring accuracy and completeness.
- Explore mediation or other alternative dispute resolution methods to help resolve conflicts amicably, saving time and reducing the emotional toll.
- Protect your parental rights and fight for fair custody arrangements and child support orders.
- Represent you in court, present your case persuasively, and advocate for your rights.
Remember, selecting the right divorce attorney is crucial. Contact Figueroa Law Group to benefit from our dedication, attention to detail, and commitment to achieving the best results for their clients.
Need Help in Divorce Taxes And Estate Plans in Florida? Contact Us Now!
Don’t navigate the complexities alone. Contact Figueroa Law Group today for reliable and personalized legal support. Our dedicated team of attorneys is well-versed in Florida divorce laws and experienced in handling the intricacies of divorce taxation and estate planning. Let us help you safeguard your assets, protect your interests, and secure a stable future.
Take control of your financial well-being and ensure your estate plan reflects your wishes. Schedule a consultation with our accomplished attorneys by reaching out now. Your peace of mind is just a phone call away.