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Key Financial Issues to Address Before Finalizing a Divorce

Before finalizing a divorce in Florida, you should carefully review how marital assets and debts will be divided, whether alimony or child support will apply, and how taxes and beneficiary designations may affect your finances. Overlooking these issues can leave you with unexpected expenses or financial obligations long after your divorce is finalized.

You may be worried about keeping your home, protecting your retirement savings, or managing household expenses on a single income. With so many financial decisions to make, it's understandable to feel uncertain about what your finances will look like after the divorce.

Before you commit to a divorce settlement, it's important to understand how its financial terms could affect you in the years ahead. At Gutin & Wolverton, based in Cocoa, Florida, we review proposed agreements, address property division and support disputes, and understand your rights under Florida law.

Valuing and Dividing Marital Assets

Florida follows equitable distribution. Courts begin with the premise that marital assets and liabilities should be divided equally, but statutory factors may justify an unequal division.

Gather records for real estate, investments, retirement accounts, and other property. Assets acquired during marriage are generally presumed marital. Certain premarital assets, inheritances, and individual gifts may remain nonmarital, although increases in their value attributable to marital funds or efforts may be divided.

Some retirement plans, such as 401(k) plans and pensions, may require a Qualified Domestic Relations Order (QDRO). A QDRO is a court order that directs a retirement plan to pay a portion of one spouse's benefits to the other spouse or former spouse. Distributions to a spouse or former spouse under a QDRO are generally exempt from the 10% early-distribution tax, but income taxes may still apply. IRAs have different divorce-related transfer rules.

If you own a home or business, consider its value, outstanding debts, and the cost of keeping it. At Gutin & Wolverton, our experienced Florida divorce lawyers review financial records, address disputed valuations, and examine proposed property division terms so you understand what you would receive and owe.

Managing Joint Debts and Liabilities

A divorce judgment assigning a joint debt to your spouse generally does not release you from your obligation to the creditor. If your former spouse misses payments, the creditor may still seek repayment from you, and your credit may suffer. Before finalizing your settlement, consider these steps:

Review joint credit accounts. Determine whether balances can be paid off and accounts closed or separated. Closing an account does not erase its balance.
Address shared loans. If one spouse keeps a house or vehicle, explore refinancing in that person's name. Transferring title alone does not remove a borrower from the loan.
Set clear payment terms. State who pays each debt and what happens if someone defaults.

These arrangements may reduce disputes, but they do not override your contracts with creditors.

Determining Alimony and Child Support Obligations

You may qualify for alimony if you need financial support after divorce and your spouse has the ability to pay. Under Florida Statutes § 61.08, courts consider both spouses' financial circumstances when deciding whether to award alimony. Florida eliminated permanent alimony for new awards in 2023, but other types remain available, including temporary, bridge-the-gap, rehabilitative, and durational alimony. Each serves a different purpose, and the law places limits on certain awards.

If you have children, Florida uses child support guidelines to calculate how much support each parent should contribute. The calculation considers both parents' incomes, eligible childcare and health insurance expenses, and how much time the children spend with each parent. Courts may adjust the guideline amount when the law allows.

Your income from bonuses, commissions, or self-employment may also affect the amount of support you pay or receive.

Reviewing Taxes and Future Expenses

Your federal tax filing status generally depends on whether you are married on December 31. Transfers of property between spouses or former spouses incident to divorce generally do not create immediate federal income tax, although a later sale may.

Review eligibility for child-related tax benefits and the tax treatment of retirement distributions. Child support is neither deductible by the payer nor taxable to the recipient. Alimony under divorce or separation agreements executed after 2018 generally has the same federal income tax treatment.

Prepare a post-divorce budget for housing, utilities, transportation, childcare, and insurance. If you have coverage through your spouse, investigate replacement health insurance and its cost.

Updating Estate Plans and Beneficiaries

A divorce settlement does not automatically update every estate document or beneficiary designation. Florida law generally revokes provisions in a will benefiting a former spouse and certain beneficiary designations, but exceptions and federal law may affect the result.

Review life insurance and retirement beneficiaries, wills, trusts, healthcare surrogate designations, powers of attorney, and payable-on-death accounts. A spouse's authority under a Florida power of attorney generally terminates when a divorce action is filed, unless the document provides otherwise.

Before making changes, check whether your settlement or a court order requires you to maintain particular beneficiaries, and consult an appropriate professional.

Protect Your Finances Before Finalizing Your Florida Divorce

Review proposed property division, debts, and support carefully before signing. Property division provisions generally cannot be changed simply because your circumstances later change.

At Gutin & Wolverton in Cocoa, Florida, we provide divorce representation throughout Brevard County and the surrounding areas of Cocoa, Titusville, Melbourne, and Palm Bay. We also serve all beachside communities, including Cocoa Beach and Merritt Island Beach.

We review settlement agreements, explain your options under Florida law, and represent your interests in financial disputes. Contact us to schedule a consultation before finalizing your divorce.