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Fort Lauderdale Divorce Law Blog

Failing to prepare for a high asset divorce could be costly

Lately, there has been a lot of buzz about couples who decide to end their marriage and anticipate remaining friendly during and after the proceedings. However, not everyone has the luxury of knowing that his or her spouse will "play fair" in a high asset divorce. Even if a Florida resident is fairly confident that the proceedings will go smoothly, it is better to be prepared.

When a divorce is filed, a temporary restraining order is automatically put into place. This restricts the parties from conducting certain financial transactions during the proceedings. Therefore, if a Florida resident is not financially prepared, money could become an issue. This could be an unnecessary distraction during settlement negotiations that might cause hasty decisions to be made.

Many pro athletes are no stranger to a high asset divorce

Florida sports fans know that professional athletes can make millions of dollars from their sport, product endorsements and other revenue streams. For those who do not execute prenuptial or post-nuptial agreements, a high asset divorce could be costly. As a matter of fact, many famous athletes have paid out millions of dollars to their ex-wives.

Michael Jordan, who was undoubtedly one of the most successful professional athletes in the United States, was divorced in 2007. His wife received a settlement worth $168 million. Jordan was not the only one who gave up hundreds of millions of dollars when the marriage ended. Professional golfer Tiger Woods was ordered to pay his ex-wife $100 million after he was caught cheating on her.

Tax considerations in a high asset divorce

Once again, it is that time of year when many people are preparing to file their taxes. If a Florida couple is also in the process of getting a high asset divorce, this time of year is a good reminder that taxes need to be part of any settlement the parties might execute. In addition to filing income tax returns, there are often tax consequences attached to at least some of the assets of the marital estate.

Timing is essential when it comes to filing income tax returns. If the parties are divorced prior to Dec. 31, the IRS considers each of them to be single for the entire year even if the divorce is not final until Dec. 30. Conversely, if a couple is still legally married on Dec. 31, the IRS will require either a married joint or married separate return. The parties will need to determine which method of filing will provide them with the best outcome possible.

Collaborative law can be used even in a complex divorce

For some Florida couples, the issues that need to be resolved in their divorces are rather straight forward. However, other couples are faced with a complex divorce due to the nature of their property and/or family circumstances. Fortunately, it is not necessary for them to go to court in order to come to a settlement, even with the unique challenges they face.

The traditional model of divorce in which both parties are on opposite sides of the courtroom can breed contention and make the process more adversarial than it really needs to be. That is where collaborative divorce can be useful. This fairly new method of divorce lets the parties work together in order to achieve a settlement that best fits their family dynamics and leaves them both satisfied that they were each treated fairly.

Prior to asset division, begin to financially disconnect

The division of marital wealth is among the most contentious aspects of any divorce. Second only to child custody matters, asset division can bring out the worst in many people. Unfortunately, some divorcing spouses will take out their frustrations on their soon-to-be ex and will wreak financial havoc to the greatest possible degree. The best way for Florida spouses to avoid this outcome is to begin to financially disconnect from their spouse as soon as possible.

Disconnection involves taking action to separate as many shared accounts as possible. For bank accounts, it is sometimes possible to close the account entirely and then give half of the value of that account to one's partner. If the bank will not allow the account to be closed by only one party, then a spouse can withdraw half of the money and then notify his or her partner that the other half is there to be used as he or she sees fit.

Is it possible to share child custody 50/50?

The simple answer to this question is yes, but putting it into practice will take a great deal of negotiation and cooperation. The first step is to create a child custody agreement that works for both the parents and the children. Regardless of what agreement Florida parents come to, the best interests of the children should be the primary concern -- especially since this is the standard courts use when approving these agreements.

Even though the parents intend to share custody as close to 50/50 as possible, one parent will need to be considered the primary custodian of the children. This is necessary for many reasons, one of the most important of which is to determine where the children will go to school. Once that determination is made, the parties can construct a schedule that gives both of them adequate time with the children.

Consider signing a prenuptial agreement before marriage

With all of the talk this month about the increase in divorce filings, Florida couples who are engaged to be married might want to consider creating a prenuptial agreement to protect them in the event that the marriage ends. Many people consider planning for divorce before the wedding as unromantic and even tempting fate. However, a prenuptial agreement can act like an insurance policy, protecting each party by outlining the disposition of property in the event of a divorce. By putting a plan in place ahead of time, it can save the parties time and money if the marriage dissolves.

A prenuptial agreement can delineate what property belongs to each person prior to the marriage with a value set at the time of the marriage, which could be important later. For instance, if each party has a retirement account before marriage, the amount in that account before the date of the marriage remains separate property. However, any increase during the marriage could be considered part of the marital estate if the parties divorce.

Emotions can further complicate an already complex divorce

Ending a marriage is an emotional roller coaster for many Florida residents. Anger, resentment and hurt tend to make it a challenge to get through the divorce process. However, emotions will only complicate an already complex divorce.

It can be tempting to try to exact some measure of revenge during a divorce, but neither party wins when that happens. Far too many couples end up in court over unimportant items -- which can be anything from a set of china to the marital home -- that it may turn out neither of them really wanted. Each of them only wanted the disputed item because the other said he or she wanted it.

Preparation is key in a high asset divorce

As the new year begins, so does what many people who work in the field of family law call the busiest time of the year. This means that many Florida residents are currently contemplating ending the marriages. Prior to embarking on a high asset divorce, it would be advisable for each party to be prepared.

When significant amounts of assets are at stake, it would first be a good idea to have an understanding of the divorce laws here in Florida. How certain types of property are divided, along with what is considered to be separate property vs. marital property, is important to know prior to beginning negotiations. Without this information, a party could end up at a disadvantage.

No matter when the divorce is filed, consider the holidays

Many Florida couples who have minor children were waiting for the new year before filing for divorce. One of the tasks ahead of these couples during the divorce process is devising a parenting plan. Even though the holidays for 2015 will soon be over, future holidays still need to be accounted for in any child custody agreement negotiated by the parties.

The courts will often take the easy way out and simply devise an alternating schedule for holidays, such as Christmas. This means that a particular parent will have visitation with the children for a specified period during the holidays every other year. For many Florida parents, that is simply not acceptable -- especially if the parents live relatively close to each other.