USA – FLORIDA Law and Practice Contributed by: Jennifer Jordan McCall, Drew Reitz, Christine Tsai and Maria Williams, Pillsbury Winthrop Shaw Pittman LLP
be equal, unless there is a justification for an unequal distribution based on all relevant factors, including, but not limited to, the contribution to the marriage by each spouse, the economic circumstances of the parties, the duration of the marriage, and the interrup - tions of personal careers or educational opportunities of each party. In Florida, the presumption is that marital property includes all assets acquired and all liabilities incurred during the course of a marriage. It is irrelevant which spouse purchases the asset. For instance, if a hus - band or wife purchases a classic painting with money earned from his or her separate paycheck, the paint - ing can still be treated as marital property. In Florida, keeping assets in one’s name does not provide pro - tection. Moreover, all real property held by the parties as tenants by the entireties, whether acquired prior to or during the marriage, are presumed to be marital assets. The following are not considered marital property: 1) assets acquired and liabilities incurred by either party prior to the marriage, and assets acquired and liabili - ties incurred in exchange for such assets and liabili - ties; 2) assets received as a gift or inheritance (other than from the other spouse), and assets acquired in exchange for those gifts or inheritances; 3) all income derived from nonmarital assets during the marriage unless the income was treated, used, or relied upon by the parties as a marital asset; 4) assets and liabilities excluded from marital assets and liabilities by valid written agreement of the parties, and assets acquired and liabilities incurred in exchange for those assets and liabilities; and 5) any liability incurred by forgery or unauthorised signature of one spouse signing the name of the other spouse. Florida’s Constitution restricts the ability of a married person to transfer a primary residence without the consent of the owner’s spouse. As mentioned above, Florida excludes assets and liabilities from the definition of marital assets if there is valid written agreement by the parties, including prenuptial and postnuptial agreements, which may limit or amend the distribution of property to a spouse. Nuptial agreements may include, but are not limited
to, many matters: 1) parties’ rights to assets/liabilities; 2) the right to buy, sell, or transfer property; 3) distri - bution of property upon separation or death; and 4) right to alimony. These agreements must be: 1) written and signed by both parties voluntarily; 2) reasonable; and 3) made after fair disclosures are available to the other party. In addition, upon divorce, each spouse may be enti - tled to a share of the homestead property. If the par - ties agree to sell the property or the court orders a sale of the property, then the “Save Our Homes” tax exemption (see 1.2 Exemptions ) can be divided 50/50 between the two parties, and each can transfer, or “port”, his or her part of the tax exemption to a new homestead. Prior agreements can also be used to ensure that the homestead property is properly divid - ed upon divorce. Note that Florida also allows spouses to use a Florida community property trust, which is akin to a commu - nity property regime. This is discussed in more detail Property at death generally receives a step-up in basis (ie, to the fair market value of the asset on the date of the decedent’s death). The transfer of property dur - ing life by gift generally results in a carry-over basis to the donee (ie, the same basis as the donor had in the asset). Additionally, the Florida Community Property Trust Act affords married couples potential positive income tax treatment of trust assets at the first spouse’s passing. Under the Act, married couples can use a community property trust which is akin to a community property regime. Assets transferred to a Florida community property trust can result in all of the assets receiving a step-up in tax basis upon the first spouse’s death, rather than only allowing a 50% step-up in income tax basis. This is unusual in the United States and valu - able, as it can reduce capital gains tax on the entire property. in 2.5. Transfer of Property . 2.5 Transfer of Property
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