Is Florida A Community Property State
Isn’t it true that Florida is not a community-owned state? During a marriage in a community property state, any assets acquired by either spouse are considered marital property and consequently owned by both parties. Even pre-marital separate property income is deemed community property in some states.
Florida, on the other hand, is a fair-distribution state. This means that the assets of a divorced couple are divided in accordance with the judge’s determination of what is fair and equitable.
Local governments in states with common property
Until 2021, only nine states have community property laws: Arizona; California; Idaho; Louisiana; Nevada; New Mexico; Texas; and Washington.
Even assets ordinarily exempt from creditors, such as retirement savings, are included in the definition of community property. As long as they are kept apart from other community property assets, most governments do not recognise bequests and inheritances as community property.
For Asset Protection, the drawbacks of Community Property.
The major issue with asset protection in places with community property is that in some laws, all community property is open to the creditors of either spouse. In other words, a judgement creditor of the other spouse may be able to seize assets acquired by one spouse in community property jurisdictions.
A creditor of the non-owner spouse cannot seize property owned solely by one spouse in Florida since the state does not recognise community property. The debts of either spouse cannot attach to Florida real estate owned in joint tenancy as tenants by the entireties.
When you move to Florida, what happens to your community property?
It doesn’t matter if you relocate to Florida or not. Even while Florida does not generate community property interests, the community property does not become tenants by entireties or any other form of ownership. Community property rights are instead brought in from other states by Florida.
One judge in Texas awarded the creditor money only against the wife, and that money was sent to a creditor in Florida. Texas is a community property state, but Florida is not a community property state.” Each spouse is entitled to a 50 percent stake in the other spouse’s property acquired during their marriage, so the debtor wife was entitled to a 50 percent stake in her husband’s LLC investment under community property law in Texas. Florida’s community property interest of the debtor wife was sought by the judgement creditor.
The client wanted to know if the wife’s judgement creditor may establish a charge lien on her husband’s LLC membership share based on community property standards in Florida courts. The debtor wife in Florida has no ownership interest in her husband’s LLC under Florida law.
For the most part, Texas community property laws allow a creditor to seize a charge lien on the wife’s half of the community property. As long as the debtor and her non-debtor spouse lived in Texas, the rights of the debtor in her husband’s LLC stake were established. The wife’s community property interest was not wiped out when the pair relocated to Florida. Several Florida cases and a state law are relevant.
Because community property rights are distinct and do not include survivorship at death, the LLC’s joint community property interests do not become exempt tenants in common when the couple moves to Florida.
Making Common Property Available to Renters on an Individual Basis
Imported marital property from states with community property laws keeps the same qualities as if it had been obtained there.
When community property funds are used to buy, or otherwise convert, a new asset in Florida, the new asset will be subject to Florida’s property laws.
To illustrate this point, let’s say that you and your spouse live in a community property state like California and have an account with a California bank. Tenant-by-the-entirety bank accounts are opened in Florida, and the money from the community bank is transferred to the new account. Money placed into a newly opened Florida account would be considered “tenants by entireties property” in this hypothetical situation. In other words, moving money to a new Florida bank account is a change of ownership.
In a community property state, retirement savings held in an account opened there would likely be subject to the laws of that state. Retirement funds can be exempted from taxes in Florida by opening a new account there.
When a debtor relocates to Florida, he or she may continue working for a company that was previously owned by a spouse. In such a scenario, I believe a creditor in a state where common property exists might seize wages. If an employer has offices in more than one place, garnishment actions will be brought in those locations. A garnishment exemption for the head of the household cannot be asserted outside of Florida by a Florida resident. In order to avoid wage garnishment, the new Florida resident must be employed by a national corporation having Florida offices.
In Florida, what is considered “separate property”?
Any property that a couple intends to divide in the event of a divorce must first be determined to be owned separately by each spouse. Non-marital property is not often divided in a divorce in Florida. If one spouse held property prior to the marriage, or obtained it as a gift or inheritance during the marriage (excluding gifts from the other spouse), it is considered distinct property. • assets and debts that a couple specifies as distinct property under a legally binding contract (a premarital agreement, for example)
Amounts from separate property, unless the spouses have “commingled” or otherwise recognised the income as marital property (see below), and things exchanged for or purchased using separate property.
Where Can I Find Information About Florida Marital Property?
All assets and obligations accrued by either spouse during the marriage are considered marital property in Florida unless a valid written agreement states otherwise. Even if a property or debt is titled exclusively in one spouse’s name, spousal rights in Florida allow both spouses to share the marital assets and liabilities. Your spouse’s credit card account may have your name on it, but even if your partner spent all of the money on the card, you are still jointly liable for the charges (unless a court finds that your spouse wasted assets or hid the account from you).
Retirement accounts like 401(k)s, IRAs, deferred compensation plans and profit-sharing plans are examples of assets. Whether or not they are “vested,” benefits belong to both spouses (meaning whether the right to receive the benefits is absolute or depends on some future condition, such as continuing to work for a certain number of additional years).
If you or your spouse received benefits both before and after your marriage, you may want to speak with an attorney to determine what percentage of those benefits is considered marital property. A financial advisor may also be able to give you an opinion on the value of the perks.