Relationship Dissolution Planning Part II: Planning for Married Couples

When people are getting a divorce, they can plan ahead by creating a property settlement agreement. This agreement says how their property and debts will be divided after the divorce. They can include details about each asset they own and all the money they owe. This can help make the divorce process smoother and less stressful. If one spouse dies before the divorce is final, the other spouse gives up their rights to inherit anything from the deceased spouse. This includes rights to the deceased spouse’s will, trust, and any other assets with a named beneficiary. The agreement also addresses tax issues, like filing joint tax returns and splitting gifts for tax purposes. If one spouse is wealthier, they should try to include a rule in their divorce agreement that says the other spouse has to agree to split any big gifts they give. This means that the wealthier spouse can give more money without paying gift taxes. But the other spouse has to agree to this, and they can’t get remarried in the same year. The agreement should also say that the consent to gift split is permanent, so the other spouse can’t change their mind later.

When it comes to real estate, they need to make sure to change the ownership from both of them together to each of them separately, as stated in the divorce agreement. In case of a divorce, both spouses should update their wills or create new ones. They should remove their ex-spouse as the person in charge of their estate and change the beneficiaries if needed. They should also consider setting up a trust for their ex-spouse if the divorce agreement doesn’t already cover it. If their ex-spouse has children from a previous relationship, they should decide if they still want to include them as beneficiaries. There are also some legal things to watch out for, like making sure the ex-spouse’s family isn’t included in certain parts of the will. If a married couple is getting divorced and they have children, they need to update their wills to name a guardian for the kids. They also need to update any trusts or legal documents that give the other spouse power over their finances or health care. If one spouse has a trust that includes the other spouse as a beneficiary, they should change the trust so the other spouse is removed if they get divorced. If you and your spouse are getting divorced, make sure to change who gets your life insurance, retirement plans, and similar assets. If your parents are giving you money or stuff, ask them to put it in a special trust for you so it’s protected if you ever get divorced. In Florida, when someone dies, their spouse has the right to receive a share of their estate, even if they are not left anything in the will. This share is typically 30% of the estate. The estate includes things like property, joint accounts, life insurance, and gifts given within a year of the person’s death. To make sure the spouse doesn’t get this 30%, the person can create a special trust in their will or trust that limits what the spouse can get. This way, they can control who gets their assets after they die. You can set up a special legal entity or give away assets as gifts to make sure your spouse doesn’t get as much of your stuff if they choose to inherit only part of it. You can also include a provision in your will that gives your spouse less desirable assets if they choose to take only part of your estate. If someone gets married after making a will and doesn’t include their new spouse in the will, the spouse can still claim a share of the estate. This is called a pretermitted spouse share. The amount the spouse gets depends on whether the person who died had kids and whether those kids are also the spouse’s kids. If someone doesn’t want their spouse to get this share, they should either make a special agreement with their spouse or change their will to specifically leave out the spouse. In Florida, there are many laws about wills, trusts, and estate taxes. One attorney, Elaine M. Bucher, focuses on these areas of law and has written articles and given talks about them. This information is from the Tax Section and is meant to help people understand these complicated laws. We want our members to understand their responsibilities to the public, make sure the justice system works well, and make progress in the study of law.

Source: https://www.floridabar.org/the-florida-bar-journal/relationship-dissolution-planning-part-ii-planning-for-married-couples/