Family Law

Toni B. Ross is highly qualified to represent you in all family law matters, including contested and uncontested divorce, alimony; as well as children’s issues including timesharing and parental responsibility, establishment/ disestablishment of paternity; and domestic violence. We have extensive experience in post judgment related matters such as child support/timesharing enforcement or modifications, alimony enforcement or modifications and enforcement of equitable distribution provisions in marital settlement agreements and/ or final judgments of divorce.

Our firm also handles a broad range of general family legal issues, including but not limited the drafting and review of prenuptial and postnuptial agreements and co-habitation and property rights agreements. We understand the emotional stress associated with family law issues and treats our clients with the utmost respect and compassion. We sensitively guide our clients through every step of the legal process, while keeping them fully informed, enabling our clients to understand all of their options and every aspect of their case, so that our clients know what to expect as their case progresses.

The Firm covers all types of family law proceedings. The parties, facts, and circumstances in each case are unique and we tailor our approach to your family law matter to suit your specific needs to obtain the most favorable outcome.

Divorce

In Florida, a divorce is called a “dissolution of marriage”  The two ways of filing in a Florida court for a dissolution of marriage are by:

  • Simplified dissolution.
  • Regular Dissolution.

The various aspects and things to be taken into account during a dissolution of marriage proceeding are:

  • Equitable distribution.
  • Division of assets  and liabilities (High net worth or low net worth).
  • Business valuation.
  • Marital Settlement Agreement.
  • Parental Responsibility.
  • Parenting plans and timesharing schedule.

Florida is one of the many states that has abolished fault as a ground for dissolution of marriage. The only requirement to dissolve a marriage is for one of the parties to prove that the marriage is “irretrievably broken.” Either spouse can file for the dissolution of marriage. You must prove that a marriage exists, one party has been a Florida resident for six months immediately preceding the filing of the petition, and that the marriage is irretrievably broken and that there is nothing the court can do to restore the bonds of marriage. The reason for the irretrievable breakdown, however, may be considered under certain limited circumstances in the determination of alimony, equitable distribution of marital assets and debts, and the development of the parenting plan.

Regular Dissolution Of Marriage

The regular dissolution process begins with the filing of a petition for dissolution of marriage, with the circuit court in the county where you and your spouse last lived together, or in a county where either party resides. Either spouse may file for a dissolution of marriage. The petitioner must allege that the marriage is irretrievably broken. The petition sets out what the petitioner wants from the court. The other spouse must file an answer within 20 days of being served, addressing the matters in the initial petition, and can choose to include a counter-petition for dissolution of marriage raising any additional issues that spouse requests the court to address.

Mandatory Financial Disclosure

Court rules governing a dissolution of marriage require that each party provide certain financial documents and a completed financial affidavit to the other party within 45 days of the service of the petition or several days before any temporary hearing. Failure to provide this information can result in the court dismissing the case or not considering that party’s requests. The parties or the court can modify these requirements except for the filing of a financial affidavit, which is mandatory in all cases in which financial relief is sought. A child-support guidelines worksheet also must be filed with the court at or before any hearing on child support. This requirement may not be waived by the parties or the court.

Mediation

Mediation is a procedure to assist you and your spouse in working out an arrangement for reaching an agreement without a protracted process or a trial. Its purpose is not to save a marriage but to help divorcing spouses reach a solution and arrive at agreeable terms for handling the break-up of the marriage. Many counties have public or court-connected mediation services available. Some counties requir spouses to attempt mediation before a final hearing (also known as “trial”) can be set.

Formalizing Settlement Terms

Some spouses agree on some or all of the issues before or after the petition is filed. Issues may include the division of property, a parenting plan, spousal support, child support or attorney’s fees. Parties who have reached an understanding as to their desired outcome(s) enter into a written agreement that is signed by both parties and then presented to the court. Parties who do not yet have a written agreement but have reached an understanding also may appear for a final hearing with a suggested settlement that they ask the court to accept and incorporate into a final judgment.

Reaching an agreement  instead of litigating empowers parties to create terms with which they are more likely to comply rather than leaving decisions up to a judge as. In such uncontested cases, a dissolution of marriage can become final in a short amount of time

Contested Final Hearing

Finally, some spouses cannot agree on all issues, so a final hearing (or “trial”) is required. Each party will present evidence and testimony to the judge during the final hearing, and then the judge makes the final decision on the contested issues

Simplified Dissolution of Marriage

Certain couples are eligible to dissolve their marriage by way of a simplified procedure. This type of dissolution was designed so the services of an attorney might not be necessary. Spouses are responsible, however, for filing all necessary documents correctly, and both parties are required to appear before a judge together when the final dissolution is granted.

It is the public policy of Florida to ensure that each minor child has frequent and continuing contact with both parents after the parents have separated or the marriage is dissolved and to encourage parents to share the rights and responsibilities, and joys, of child-rearing. The court gives both parties the same consideration in determining parental responsibility and time-sharing, regardless of the child’s age or gender.

Children’s Issue

  • Timesharing.
  • Parenting plans.
  • Parental responsibility.
  • Child support.
  • Appointment of guardian Ad Litem.
  • Parenting coordinators.
  • Relocation.
  • Objecting to relocation.
  • Sole parental responsibility and 100% timesharing.
  • Ultimate decision-making authority.
  • Psychological evaluations.
  • Timesharing rights for unwed fathers.
  • Passport issues.

In most cases, parental responsibility for a minor child and the ability to make decisions on behalf of them will be shared by both parents, so that each retains full parental rights and responsibilities with respect to their child. Shared parenting requires both parents to confer so that major decisions affecting the welfare of the child will be determined jointly. You and your spouse may agree, or the court may order, that one parent have the ultimate responsibility over specific aspects of the child’s welfare, such as education, religion, or medical and dental needs. The court will determine any or all of these matters if the parties cannot agree.

In very rare cases, the court can order sole parental responsibility to one parent. To do so, the court must determine that shared parental responsibility would be detrimental to the child.

In determining parental responsibility, the court will approve or devise its own Parenting Plan, which includes responsibility for the daily tasks of child-rearing, the time-sharing schedule, and decision-making authority relating to health care, school, and related activities. “Timesharing” is the amount of time each parent shares with their children. The plan also will specify any technology that will be used for parent-child communication. The parents may agree on a Parenting Plan and submit it to the court for approval, or the court will determine these issues. The statute includes a list of factors for the court to consider in making these decisions. Each parent’s work schedule, availability, and financial situation will determine timesharing.

The courts use the “best-interests-of-the-child” standard when considering paretal issues.

Florida law requires both parties to attend a parenting course before entering a final dissolution of marriage. Some courts require children of parents going through dissolution of marriage to attend a class specifically designed for them.

Division of Assets And Debts

One of the most difficult and complex areas of dissolution of marriage is the division of assets and debts. Assets may include cars, houses, retirement benefits (pensions and 401(k) plans), business interests, cash, stocks, bonds, bank accounts, personal property and other things of value. Debts (also called “liabilities”) include mortgages, car loans, credit card accounts and other amounts of money you and your spouse owe to third parties.

There are two types of assets and debts in Florida, nonmarital and marital. Generally, any asset or debt acquired during the marriage is considered marital and subject to distribution. The parties also may have assets or debts that are considered nonmarital and should be awarded to only one party.

Florida statutes and case law provide for an “equitable distribution” of marital assets and debts. Although the court must begin with the presumption that all marital assets and debts are to be divided equally (50 percent each) between the parties, the court may distribute the marital estate fairly or equitably (not necessarily equally) between the parties, regardless of how title is held. A court decides equitable distribution before considering alimony. Equitable distribution is based on a long list of factors the court is required to consider.

Factors to be considered by the court include the contribution of each spouse to the marriage; the duration of the marriage; and the economic circumstances of each spouse. The court should approve your agreement if the court finds it to be reasonable. If you and your spouse cannot agree, the court will divide the assets and debts during trial.

Alimony

The Toni Ross Law Firm, P.A. handles all aspects of alimony, including:

  • Spousal support.
  • Temporary relief hearings.
  • Health insurance.
  • Auto payments.

Alimony refers to court-ordered payments awarded to a spouse or former spouse within a  martial settlement  agreement or final judgment for dissolution of marriage. The rationale for alimony is to provide financial support to the spouse with a lower income or no income at all. Sometimes referred to as spousal support, alimony can be awarded to a husband or wife. How much alimony a spouse must pay, and for how long, depends on the length of  the marriage  the standard of living established during the marriage and the  current and future potential incomes of both spouses.

After equitable distribution, the court may consider an alimony award. The court may grant alimony to either spouse. For the court to award alimony, the requesting spouse must demonstrate a need for alimony and the ability of the other party to pay. Once the requesting spouse has established a need and an ability to pay, the court must determine all relevant factors to determine the property type and amount of alimony to award.

For purposes of determining alimony, there is a rebuttable presumption that a short-term marriage is a marriage having a duration of less than 7 years, a moderate-term marriage is a marriage having a duration of greater than 7 years but less than 17 years, and a long-term marriage is a marriage having a duration of 17 years or greater. The length of a marriage is the period of time from the date of marriage until the date of filing of an action for dissolution of marriage.

Bridge-the-gap alimony may be awarded to help a spouse make a transition from being married to being single. Bridge-the-gap alimony is designed to assist a spouse with legitimate, identifiable short-term needs. There are limits as to the length and conditions of a bridge-the-gap alimony award.

Rehabilitative alimony may be awarded to assist a spouse in establishing the capacity for self-support through either the redevelopment of previous skills or credentials, or the acquisition of education, training, or work experience necessary to develop appropriate employment skills or credentials. The court must articulate a specific rehabilitative plan to award alimony so both parties clearly understand the expectations placed on the alimony recipient.

Durational alimony may be awarded when permanent periodic alimony is inappropriate. The purpose of durational alimony is to provide a spouse with economic assistance for a set period of time following a marriage of short or moderate duration or following a marriage of long duration if there is no ongoing need for support on a permanent basis. There are limitations as to the length and modifiability of a durational alimony award.

Permanent alimony may be awarded to provide for the needs and necessities of life as they were established during the marriage of the parties for a spouse who lacks the financial ability to meet the needs and necessities of life following a dissolution of marriage. There are limitations as to when a court may award permanent periodic alimony, particularly for marriages of short or moderate duration.

Some of the factors the court considers when determining the type and amount of the alimony award include, but are not limited to:

The parties’ prior standard of living.

  • Length of the marriage
  • Age and physical and emotional condition of both spouses.
  • Each spouse’s financial resources and income-producing capacity of the assets they receive.
  • The time necessary to acquire sufficient education or training to find appropriate employment.
  • The services rendered in homemaking, child-rearing and the education and career-building of the other spouse.
  • The court may consider any other factor necessary to do equity and justice between the spouses.
  • You have the right to obtain information about your spouse’s income and assets through the use of discovery procedures.
  • Discovery includes the exchange of documents and answers to written or oral questions.

Post Judgment

A post judgment or divorce action is a legal action that takes place after the final judgment of divorce has been entered by a court. A post action involves any legal action on the part of either spouse taken to enforce or modify the judgment of divorce. The court does not monitor the parties to ensure that its orders are being followed. It is up to the party being harmed to seek court intervention to enforce court orders. The most common actions seek to enforce a child support order or modify a child custody order. The list of typical actions is as follows:

  • Child support enforcement.
  • Child support modifications.
  • Spousal support enforcement.
  • Spousal support modifications.
  • Timesharing and parenting plan modifications.

Domestic Violence

Domestic violence is defined as violence committed by someone in the victim’s domestic circle, which includes partners and ex-partners, immediate family members, other relatives, and family friends. The term “domestic violence” is used when there is a close relationship between the offer and the victim. There are many forms of domestic violence such as child abuse, senior abuse, as well as all forms of abuse by an intimate partner or former intimate partner, including psychological abuse and stalking. The various areas of domestic include:

  • Dating violence
  • Injunction for order of protection
  • Repeat violence
  • Junction enforcement
  • Domestic violence
  • Sexual violence
  • Restraining orders
  • Defense against injunctions for domestic violence

Collaborative Divorce

Ms. Ross of The Toni Ross Law Firm, PA is formally trained and has experience in collaborative divorce, which offers a way for married couples to resolve disputes respectfully without going to court. This process involves negotiating a mutually acceptable settlement without having courts decide issues; creating shared solutions; and maintaining open communication and information sharing with the assistance of trained professionals. The collaborative practice of law is a voluntary dispute resolution process that can begin at any time before or after a party files a petition for dissolution of marriage with a court. In the collaborative practice of law, both parties and their attorneys sign a collaborative participation agreement that describes the nature and scope of the matter; the parties voluntarily disclose all relevant and material information; the parties use good faith efforts to negotiate; and the parties may engage joint neutral mental health and financial professionals to assist with their negotiations. The goal of the collaborative process is for the parties to enter into a written settlement agreement that addresses all issues, which may include a parenting plan, division of their assets and debts, alimony, child support and attorney’s fees and costs. Should the collaborative process be unsuccessful in whole or in part, the parties must discharge the attorneys and other professionals and begin a contested dissolution proceeding through the court.

PRENUPTIALS/POSTNUPTIAL; CO-HABITATION AND PROPERTY RIGHTS AGREEMENTS;DOMESTIC PARTNERSHIP AGREEMENTS 

The divorce rate in the U.S. is astronomical. Nearly half of recent first marriages end in divorce. In addition, the rate of domestic partner relationships is increasing. With the increase in such relationships, there is a concomitant rise in the dissolution of such relationships. The following agreements address in advance the transfer and retitling of assets and revisions to estate planning documents in contemplation of a dissolution of a marriage or domestic partner relationship.  The Ross Law Firm, PA handles the drafting of the following documents to protect your assets and liabilities in contemplation of the dissolution of a relationship:

There are two types of Nuptial Agreements:

  1. Prenuptial Agreements- prenuptial agreements (also known as premarital agreements or antenuptial agreements) are agreements entered into by the parties contemplating marriage prior to marriage that set forth the rights and obligations of each party in the event of death or divorce, and during the marriage.
  2. Postnuptial agreements (also known as post marital agreements) are agreements entered into by the parties after marriage that set forth the rights and obligations of each party in the event of death or divorce, and during the marriage. Postnuptial agreements can be used when no divorce is contemplated or when divorce is not imminent. When divorce is imminent, postnuptial agreements are referred to as separation agreements.

Purposes of Nuptial Agreements

There are three main purposes of nuptial agreements. The first purpose is to provide for the protection of assets in the event of divorce of the parties. In property division, Florida follows the theory of equitable distribution. In other words, the court will make an “equitable” distribution of the property and assets of the marriage based on the circumstances of the parties. F.S. §61.075 provides for the equitable distribution of marital assets and liabilities. A second purpose of nuptial agreements is to provide for the distribution of the parties’ assets in the event of the death of a party. Certain provisions should be included in a nuptial agreement to ensure that each party’s assets are protected in the event of such party’s death.

A third purpose of nuptial agreements is to delineate the obligations of each party during the marriage. For instance, the nuptial agreement may address which party is responsible for certain expenses during the course of the marriage. The nuptial agreement may also dictate whether the parties must file joint federal income tax returns or must do so only at the request of one party.

Requirements of Nuptial Agreements

Florida has not adopted the Uniform Premarital Agreement Act.2 However, Florida statutes and case law provide that nuptial agreements that meet certain requirements will be enforced by a court.

The requirements are as follows:

  • Complete Financial Disclosure — Individuals who contemplate marriage are in a confidential relationship with each other. Florida case law provides that this confidential relationship gives rise to a duty to make a full and fair disclosure of the nature, extent, and value of the assets that each party holds so that the other party may make an informed decision as to what will be relinquished as a result of entering into the nuptial agreement. Notwithstanding the foregoing, F.S. §732.702(2) provides that while disclosure is required in connection with an agreement waiving rights in the event of death that is executed after marriage, no disclosure shall be required for such an agreement, contract, or waiver executed before marriage. It is strongly recommended, however, that each party provide the other with full and fair disclosure in order to avoid a Florida court concluding that the nuptial agreement is invalid. Each party must disclose his or her net worth (all assets and liabilities, and the values and amounts thereof), as well as income.5 While the income tax returns of each party should certainly be reviewed and included as part of the agreement, the preparer of the nuptial agreement must be cognizant that such returns do not include nontaxable income.
  • Disclosure must be complete, but it need not be exact. The nuptial agreement should indicate what the value reflects (fair market value, book value, cash value, etc.). Information regarding such values, such as the party’s federal income tax returns for the three years prior to the date of the nuptial agreement, appraisals, and brokerage statements, should be provided to the other party and his or her attorney for review and inclusion as part of the agreement.
  • Complete financial disclosure is unnecessary if the nuptial agreement makes a fair and reasonable provision for the other party or if the other party has a general knowledge of the character and extent of the other’s assets, liabilities, and income. However, complete financial disclosure is recommended in order to avoid a court’s later interpretation that the nuptial agreement does not make a fair and reasonable provision for the other party, or that the other party did not have knowledge as to the assets, liabilities, and income of the first party. • Consideration — The nuptial agreement must recite the consideration for it. In the case of a prenuptial agreement, the consideration is the marriage.8 In the case of a postnuptial agreement, mutual promises encompassing various rights of the parties, in addition to disposing of property owned by them, have been considered sufficient consideration.9
  • Formalities of Execution — If the nuptial agreement contains testamentary provisions, it should be executed in conformity with the requirements for a last will and       testament (i.e., it must be signed in the presence of two witnesses who must also sign in the presence of each other).
  • Waiver of Equitable Distribution of Property and Interest in Marital Earnings and Appreciation of Separate Property — The court must uphold the intent of the parties as expressed in the agreement regarding the waiver of equitable distribution of property. If the parties intend to keep all income and earnings, including such income earned during the marriage, as separate property, such intention must be clearly stated in the nuptial agreement. Otherwise, income and earnings, and the assets acquired with such income and earnings, will be marital property subject to equitable distribution. In addition, if the parties desire to ensure that separate property, including all appreciation thereon, remains separate property, the nuptial agreement must clearly state such desire. Furthermore, the nuptial agreement should specifically refer to active appreciation on such separate property; otherwise, only passive appreciation on such property would remain separate property. • Waiver of Alimony — If intended, the nuptial agreement must expressly waive the party’s right to alimony. The waiver provision should include all types of alimony, such as rehabilitative, permanent, periodic, bridge-the-gap, and lump sum alimony. Note that in Florida, temporary alimony (during the divorce proceeding) cannot be waived.
  • Waiver of Interest in Homestead Property — A provision waiving a party’s constitutional right to homestead property may only be waived knowingly and intelligently.16 Accordingly, if each party intends to waive his or her homestead rights in the other party’s homestead property, the nuptial agreement should provide the following: 1) the definition of homestead property; 2) the homestead rights that each spouse would enjoy in the absence of the nuptial agreement; and 3) that each party knowingly and intelligently waives such homestead rights. • Waiver of Interests in Retirement Plans — For many clients, the most significant asset is the client’s retirement plans. Accordingly, the preparer of the nuptial agreement must ensure that any waiver of retirement benefits complies not only with Florida law, but with federal law as well. Section 7 discusses the federal laws of which the practitioner should be aware in connection with the waiver of rights to retirement plans.
  • The Employee Retirement Income Security Act of 1974 (ERISA) was enacted to provide protection to employee retirement benefits. ERISA overrides state law. The Retirement Equity Act of 1974 (REA) amended ERISA to provide protection to spouses and descendants of employees. Under REA, a surviving spouse must receive certain benefits from a qualified plan of a spouse who was a plan participant even if the participant dies prior to retirement age. It is important to note that individual retirement account (IRA) benefits are not subject to REA. Section 401(a)(11)(A) of the Internal Revenue Code of 1986, as amended requires that the surviving spouse receive a qualified preretirement survivor annuity benefit if the participant spouse dies before the annuity starting date or a qualified joint and survivor annuity benefit if the participant dies after the annuity starting date. A discussion of the “annuity starting date” is beyond the scope of this article. Section 417(a)(2) of the Code provides that a spouse may elect to waive a right to a qualified plan benefit if the waiver meets the following requirements: a) the waiver is in writing; b) the waiver must designate a beneficiary that may not be changed without spousal consent (or the consent of the spouse expressly permits designations by the participant without any requirement of further consent by the spouse); c) the spouse’s consent must acknowledge the waiver’s effect; and d) the spouse’s signature must be witnessed by a plan representative or a notary public.
  • In nuptial agreement planning, most clients desire to waive their rights to the other party’s retirement benefits. However, the Treasury Regulations to the Code provide that an agreement entered into prior to marriage does not satisfy the applicable consent requirements of §§401(a)(11) and 417 of the Code. Accordingly, the nuptial agreement should require the nonparticipant party to sign the applicable waivers after the parties are married. In addition, the participant spouse (or the participant spouse’s attorney) must actually obtain the applicable waivers from his or her spouse after marriage.
  • The nuptial agreement should also provide that the nonparticipant spouse releases all claims to the retirement plan benefits. To the extent that the participant spouse fails to obtain the required waivers from the nonparticipant spouse, and the nonparticipant spouse fails to release his or her claims to the retirement plan benefits, the heirs of the participant spouse may have a cause of action against the nonparticipant spouse. Notwithstanding the foregoing, although federal law does not require that a nonparticipant spouse waive his or her rights in an IRA, some financial institutions impose such requirement.
  • Waiver of Rights Upon Death — If intended, the prenuptial agreement should provide that each party waives the following rights upon the death of the other party: a) rights to elect against the will or any other testamentary instrument of the other party (i.e., elective share rights); b) dower or curtesy rights; c) rights as intestate heir; d) rights as a pretermitted spouse; e) exempt property rights; f) family allowance rights; g) homestead rights (discussed above); h) right to qualify and serve as personal representative of the other party’s estate or trustee of any trust created by the other party.
  • It is important that the parties specifically waive the foregoing rights in the nuptial agreement, as illustrated in the recent case of Weisfeld-Ladd v. Ladd, 31 Fla. L. Weekly D340 (Fla. 3d DCA 2006). In Weisfeld-Ladd, the parties entered into a prenuptial agreement, which provided, in relevant part, that husband’s property which was in his sole name shall remain the sole and separate property of husband, and wife shall not claim any interest in any such property during the marriage or in the event of dissolution of the marriage. The prenuptial agreement further provided that it was husband’s intent that, in the event of his death, all of his separate property be given to his children, or as otherwise provided for in his last will and testament.
  • Upon husband’s death, wife filed her election to take elective share. Husband’s children filed an objection, stating that wife had waived her rights to husband’s separate property, and that pursuant to F.S. §732.702, the prenuptial agreement operated as a waiver of wife’s right to take elective share.
  • F.S. §732.702(1) provides an individual may waive in writing his or her right to an elective share. Additionally, §732.702(1) provides “[u]nless the waiver provides to the contrary, a waiver of ‘all rights’ or equivalent language, in the property or estate of a…prospective spouse…is a waiver of all rights to the elective share….” Wife argued that the prenuptial agreement did not specifically state that she waived her right to an elective share. Husband’s children argued that the prenuptial agreement contained “equivalent language” sufficient for wife to waive her elective share rights.

The Third District Court of Appeal determined that the prenuptial agreement in this case was ambiguous as to whether wife waived her elective share rights and, thus, that the trial court properly admitted parole evidence regarding the parties’ intent. While the court ultimately determined that wife waived her elective share rights after reviewing wife’s testimony regarding the intent of the parties, the case illustrates that it is critical that the parties specifically waive their elective share rights in the nuptial agreement, if intended. • No Waiver of Child Support, Custody, and Visitation — Rights regarding child support, custody, and visitation cannot be waived under Florida law in a nuptial agreement and, therefore, should not be included in such agreement.

  • Timing of Execution — In the case of a prenuptial agreement, all meetings with the attorneys, the negotiations, and the execution of the prenuptial agreement should occur well in advance of the wedding in order to make it more difficult for a challenging spouse to assert duress or undue influence.
  • Separate Counsel — While not required under Florida law, it is recommended that each party obtain separate representation with regard to the nuptial agreement. Separate representation can help refute a claim that the nuptial agreement was entered into under duress or as a result of undue influence. Very often the party who requests the nuptial agreement will hire the attorney to draft the agreement.

Tax-related Issues

There are certain tax-related issues surrounding nuptial agreements of which practitioners should be aware. Specifically, there are income tax and gift tax issues that may affect the provisions of the nuptial agreement.

The first income tax issue is the income tax effect of alimony payments. Cash payments of alimony are generally taxable to the recipient spouse and deductible by the payor spouse. Specifically, §71(b) of the Code provides that a stream of cash payments to or on behalf of a spouse or former spouse pursuant to a divorce or separation instrument, whether for support or as part of a property payout, is taxable to the payee and deductible to the payor if the liability for payment ceases upon death of the payee, is not fixed as child support, the divorce or separation instrument does not designate such payment as a payment which is not includible in the gross income under §71 of the Code, and not allowable as a deduction under §215 of the Code.

Both parties must be aware of the recapture rules applicable to excess spousal support payments, and care must be taken to avoid the imposition of such rules in the nuptial agreement. Section 71(f) of the Code provides that if during the first three postseparation years there is impermissible front loading of a cash payment determined under the Code to be alimony, phantom taxable income could be attributable to the payor, and a deduction could be created for the payee, in the third postseparation year. This rule is intended to prevent spouses from characterizing nondeductible property settlement payments as deductible alimony payments.

The second income tax issue deals with the filing of income tax returns by the parties. The nuptial agreement may mandate that the parties file joint or separate federal (and state) income tax returns. Alternatively, the nuptial agreement may mandate that the parties file joint or separate income tax returns if either party makes such a request of the other party. The latter option is generally preferred, as it provides for maximum flexibility each year. The parties should be aware that the filing of a joint tax return imposes joint and several liability on both spouses.

  1. There are also gift tax issues related to nuptial agreements of which the practitioner should be aware. First, transfers incident to a divorce may be considered gifts for purposes of the federal gift tax. Section 2512(b) of the Code provides that any transfer for less than “full and adequate consideration in money or money’s worth” is a gift. The following are exceptions to the treatment of a transfer incident to a divorce as a gift.
  2. Section 2516 Payments — Section 2516 of the Code provides that the transferor spouse will be deemed to have received full and adequate consideration if the payment is made from one spouse to the other pursuant to a written agreement and the divorce occurs within the three-year period beginning on the date one-year before such agreement is entered into. The agreement must be signed within the prescribed period of time, but the transfers may occur at any time.
  3. “Harris Rule” Payments — Under the Harris rule, payments made pursuant to an agreement incorporated into a court decree or under a court order for divorce or support do not have to be made for full and adequate consideration.23
  4. Payments Made in Satisfaction of Legal Obligation to Support — Payments made in satisfaction of a legal obligation to support a spouse and minor children are not gifts, because the release of such legal obligation is deemed to be adequate consideration.24
  5. Annual Exclusion Payments and Qualified Transfers — Annual exclusion payments made pursuant to §2503(b) of the Code and qualified transfers made for certain educational and medical expenses under §2503(e) of the Code are not treated as gifts.
  6. Waivers of Pension Rights — Waivers of pension rights under §2503(f) of the Code are not treated as gifts.

A second gift tax issue related to nuptial agreements involves gift splitting. If a practitioner represents the wealthier spouse, he or she may suggest the wealthier spouse include language in the nuptial agreement that provides the other spouse must consent to split gifts under §2513 of the Code if the wealthier spouse makes such a request of the other spouse. requiring such a consent, the wealthier spouse could double the amount of annual exclusion gifts he or she makes during the year. The gift tax annual exclusion amount is the amount an individual can gift per year/per donee without using a portion of his or her federal gift tax exemption or incurring gift tax.25 Such amount is currently $12,000 annually per donee, or $24,000 annually per married couple per donee.26 Including such a provision in the nuptial agreement would also enable the wealthier spouse to gift up to $2 million during the marriage, which is two times the lifetime gift tax exemption amount (currently $1 million per person).

Domestic Partnership and Cohabitation/ Property Rights Agreements

Florida law creates no legal rights or duties between unmarried couples who live together and or who own property together, thus Florida does not recognize a claim for palimony. Because there is so much you could possibly lose if you separate without being married, it is wise for unmarried couples to take steps to protect their rights by privately entering into comprehensively drafted and legally binding domestic partnership or cohabitation and property rights agreement, specifically detailing how both assets and liabilities, as well as jointly owned real and personal property, shall be divided in the event the parties separate.