Divorce is never simple, but when it happens later in life, the financial stakes often feel higher. After decades of work, saving, and planning for retirement, the idea of dividing assets can feel overwhelming. In Orlando and across Florida, understanding how retirement accounts and inherited funds are treated in divorce can make a tremendous difference in protecting your financial future.
Why Later-Life Divorce Requires Special Attention
“Gray divorce,” the term often used for divorce after age 50, has become increasingly common. Couples in this stage of life typically have larger, more complex assets—401(k)s, IRAs, pensions, real estate, and often inheritances received from parents or relatives.
Because these assets have been building for decades, tracing what’s marital versus premarital becomes essential. Florida follows the principle of equitable distribution, meaning assets are divided fairly—but not always equally—based on multiple factors. Knowing what’s truly yours, and how to document it, can protect what you’ve worked hard to build.
How Retirement Accounts Are Handled in Florida Divorce
Retirement savings are often one of the largest marital assets. Under Florida law, any funds contributed or earned during the marriage are considered marital and are subject to division, even if the account is in just one spouse’s name.
For example, if you started your 401(k) before marriage, the balance as of your wedding date (plus any passive growth on that amount) is typically premarital. The difficulty in a long-term marriage is being able to prove the premarital portion. It is critical that you keep statements from the period prior to marriage to be able to prove the pre-marital amount.
Everything added or earned after that date is generally marital and may be divided.
This is where a Certified Divorce Financial Analyst (CDFA) can help you calculate the marital portion of retirement assets accurately and prepare documentation your attorney can rely on during negotiations.
Protecting Inheritance and Gifts
Inheritance and personal gifts are often deeply tied to family history—and protecting them can be critical in divorce. Florida law provides strong protection, but only when the funds have been handled correctly.
1. Keep inherited or gifted funds separate
Under Florida Statute §61.075, assets received by one spouse as an inheritance or gift (whether before or during marriage) are considered non-marital property—as long as they’re kept separate. That means maintaining the asset in your name only and avoiding commingling.
For example, if you inherit $100,000 and deposit it into a joint bank account, those funds can quickly lose their non-marital status. The court may treat them as marital funds, especially if both spouses used that account for shared expenses.
To preserve the protection:
- Deposit inherited funds into an individual account titled in your name only.
- Avoid using the funds for marital purchases or debt payments.
- Keep clear paper trails—bank statements, checks, and transfer records showing the origin of the funds.
2. Document how the inheritance was used
Even when funds are spent, proper documentation can make a difference. Suppose you used inherited money to remodel a marital home or pay off a mortgage. Those funds may still be traceable, and you could be entitled to a credit or partial reimbursement.
This is known as tracing, and it’s one of the most valuable tools for protecting non-marital assets in Florida divorce. A financial professional can prepare a tracing analysis showing how your inheritance flowed into or through other accounts or property.
3. Protect inherited real estate and family property
If you inherited property—such as a home or land—before or during the marriage, keeping it separate is key. Renting it out, refinancing it jointly, or adding your spouse’s name to the title can convert all or part of the property into a marital asset.
If improvements were made to the property during marriage using marital funds, your spouse could have a claim to a marital portion of the increased value. Maintaining accurate records of expenses and appraisals helps establish what portion of the property remains non-marital.
4. Understand gifts between spouses
Gifts exchanged between spouses during the marriage are marital property unless clearly stated otherwise. However, gifts from outside parties—like a parent giving one spouse money—are typically non-marital.
The best practice is to maintain documentation of who gave the gift, when it was given, and the purpose. A short-written note or even a copy of the check can make a big difference later.
The Importance of Documentation and Professional Guidance
In a later-life divorce, financial tracing is everything. Assets such as investment accounts, brokerage portfolios, and real estate often blend contributions made before and after marriage. The same can happen with cash inheritances or family property improved using marital funds.
A professional experienced in Florida equitable distribution can prepare detailed tracing analyses, calculate marital and non-marital portions, and provide reports that support your attorney’s case. This collaboration can prevent unnecessary disputes and help ensure your final settlement reflects fairness and accuracy.
Building a Financial Plan for Life After Divorce
Once assets are classified and divided, the next step is rebuilding. A thoughtful post-divorce plan should address:
- How to rebalance retirement accounts after division
- Adjusting income and investments to fit your new financial picture
- Understanding taxes on retirement withdrawals or home sales
- Updating wills, trusts, and beneficiary designations
- Creating a long-term income strategy for your next chapter
Your financial future doesn’t end with divorce—it begins again, with renewed control and clarity.
Take the First Step Toward Clarity
If you’re facing a later-life divorce in Orlando, you don’t have to navigate these financial complexities alone. Our role is to help you protect what’s yours, plan for your next chapter, and move forward with confidence.
Contact us today to schedule a consultation. Together, we’ll build a clear strategy that protects your interests and sets you up for financial security post-divorce. Don’t leave your future to chance—let’s get started.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Every case is unique. Always consult a licensed family law attorney and qualified financial professional before making decisions about asset discovery or division.