Even if the divorce is the best solution for your futures, the couple will likely have to work through numerous negotiations on the path to independence. From spousal support to a parenting plan, the divorcing couple must engage in several discussions to reach an acceptable compromise. Often, the couple gets stuck during dividing asset ownership and debt responsibility.
Florida is one of the states that follows the equitable distribution model. This means that the divorcing couple will receive an equitable or fair split of the assets and debts rather than a 50/50 split. In other words, the overall financial picture is evaluated when reaching a division rather than focusing on achieving an equal split item by item. This can affect numerous types of assets in several ways, including:
- The family home: Based on their needs and the larger picture, the couple can generally choose to either sell the home and split the profits or one spouse buys out the other’s stake in the property. Additionally, the negotiations can become complex such as one spouse keeping the home and the other spouse receives ownership of the family business.
- Digital assets: Many couples invest a great deal of time and resources into their online lives. From entertainment collections to an online storefront, it might be challenging to reach a split during divorce. With equitable distribution, the couple can examine the overall picture and divide groups of assets based on value rather than each item at a time.
- Debts: With community property, the divorcing couple will likely simply divide the debt right down the middle and each pay for half. With equitable distribution, though, the entire financial picture can work together. From balancing shared credit card debt against medical debt to leveraging debt against assets, the couple has numerous options.
Many couples find it helpful to have a prenuptial agreement in place well in advance of the marriage or a postnuptial contract in place during. If you worry that a divorce might be in your future or simply want to maintain clarity of ownership for assets and debts that each party bring into the relationship, it is wise to consider this type of marital contract.