Investment accounts can represent years of savings, strategic planning, and disciplined financial management. For some couples, these accounts are a primary source of wealth accumulation and long-term security. In a Florida marriage, however, their treatment during divorce depends on whether they are classified as marital or separate property. Without advance planning, the state’s equitable distribution laws will control the outcome, and that may not match either spouse’s intentions.
A prenuptial agreement allows couples to take control of this issue before marriage. With the guidance of an Orlando prenup lawyer, they can define how existing and future investment accounts will be treated, how gains and losses will be allocated, and whether marital contributions will create shared rights.
How Florida Law Views Investment Accounts
Under Florida’s equitable distribution system, assets acquired during the marriage are generally considered marital property and subject to division. Investment accounts opened or funded during the marriage typically fall into this category. Accounts owned before the marriage are usually separate property, but this classification can change if marital funds are added or if the account is otherwise commingled with marital assets.
Even when the account remains separate, any increase in value during the marriage that results from marital contributions or active management may be considered marital property. Without a prenup, this can require complex financial tracing and valuations during divorce. An Orlando prenup lawyer can eliminate uncertainty by clearly defining the rules in advance.
Identifying Existing Investment Accounts in a Prenup
The first step in protecting investment accounts is identifying what exists before the marriage. A well-drafted prenup will list each account by name, institution, and account number, along with its current balance. This serves as a baseline for determining what is separate property and helps prevent later disputes.
Types of accounts that may be included:
- Brokerage accounts holding stocks, bonds, mutual funds, or ETFs.
- Retirement investment accounts beyond workplace plans, such as IRAs.
- Custodial accounts or trusts with investment holdings.
- High-yield savings or money market accounts treated as investments.
An Orlando prenup lawyer ensures that the schedule of accounts is complete and accurate so that the agreement has a strong factual foundation.
Classifying Accounts as Separate or Marital
A prenup can explicitly classify certain investment accounts as the separate property of one spouse, regardless of when they were opened or how they are managed during the marriage. This means the account’s balance, growth, and income remain with the named owner in divorce.
The agreement can also specify which accounts will be considered marital property, shared equally or divided by a set formula. This flexibility allows couples to make arrangements that reflect their financial goals and risk tolerance.
An Orlando prenup lawyer can draft these classifications with the precision necessary to ensure enforceability.
Protecting Growth on Separate Accounts
Florida law generally allows the marital estate to claim a share of the appreciation in a separate account if that growth is due to marital contributions or active investment management during the marriage. Passive growth from market forces is usually considered separate property, but disputes can arise over what qualifies as “passive.”
A prenup can bypass this debate by stating that all appreciation—whether active or passive—remains separate, or by creating a formula for dividing appreciation. This prevents costly expert testimony and litigation over the source of growth.
An Orlando prenup lawyer will ensure the language is clear enough to remove ambiguity.
Preventing Commingling of Funds
One of the fastest ways to lose the protection of separate property status is to mix marital and separate funds in the same account. Depositing marital earnings into a separate account, or using the account for joint expenses, can make it harder to argue that the account is separate in divorce.
A prenup can require that separate accounts be maintained individually, with no marital deposits unless both spouses agree in writing. It can also include procedures for documenting any permitted transfers so that they do not alter the account’s classification.
An Orlando prenup lawyer can draft provisions that help couples maintain clean financial boundaries.
Addressing Joint Investment Accounts
Some couples choose to maintain joint investment accounts as a way to build shared wealth. A prenup can set specific rules for these accounts, including:
- How contributions will be made.
- Whether withdrawals require mutual consent.
- How the account will be divided in divorce.
Clear rules reduce the potential for disputes and allow both spouses to enjoy the benefits of joint investing while knowing the exit plan. An Orlando prenup lawyer can balance flexibility with protection in these clauses.
Handling Income from Investments
Income generated by investments—such as dividends, interest, or capital gains—may be classified differently than the underlying account. Without a prenup, income earned during the marriage is generally marital property, even if it comes from a separate account.
A prenup can keep investment income separate, allowing the owner to reinvest or use it without creating marital rights. Alternatively, the couple can agree to treat investment income as marital while keeping the principal separate.
An Orlando prenup lawyer will make sure the treatment of income is consistent with the rest of the agreement.
Allocating Responsibility for Losses
While gains are often the focus, investment accounts can also lose value. A prenup can specify how losses in marital accounts will be shared and whether one spouse will bear the full impact of losses in their separate accounts.
This clarity helps prevent disputes in divorce over whether one spouse should be compensated for losses incurred during the marriage. An Orlando prenup lawyer will include loss-allocation provisions to provide fairness and predictability.
Coordinating with Retirement and Tax Planning
Some investment accounts, particularly tax-advantaged accounts, have restrictions on withdrawal and specific tax implications. A prenup should account for these factors when setting division rules.
For example, the agreement can address whether withdrawals will be made before or after taxes and how any penalties will be handled. An Orlando prenup lawyer can coordinate these provisions with broader tax and retirement strategies.
Setting Buyout or Offset Terms
In some cases, a spouse may want to keep an entire account rather than divide it. A prenup can allow for a buyout, where the other spouse receives assets of equivalent value instead of a portion of the account. This approach can simplify division and preserve the investment strategy without forced liquidation.
An Orlando prenup lawyer will draft buyout terms that are fair and enforceable.
Updating the Agreement Over Time
Investment portfolios change over time as accounts are opened, closed, or moved. A prenup that addresses investment accounts should be reviewed periodically to ensure it reflects current holdings and strategies.
Florida law allows couples to amend their prenup after marriage with mutual consent. An Orlando prenup lawyer can update the schedules and provisions to keep the agreement current.
Avoiding Common Mistakes
Couples should avoid:
- Failing to list all investment accounts with sufficient detail.
- Overlooking income from investments.
- Allowing commingling that undermines separate status.
- Using vague language about division in divorce.
- Forgetting to coordinate with estate planning and tax considerations.
An Orlando prenup lawyer can prevent these mistakes with careful drafting and comprehensive coverage.
Protecting Inherited Investment Accounts
Inherited investment accounts are typically considered separate property, but they can lose that status if commingled. A prenup can reaffirm that inherited accounts remain separate, protect all appreciation and income, and set rules for keeping them isolated from marital funds.
An Orlando prenup lawyer will ensure these protections extend to future inheritances.
Interaction with Estate Planning
Investment accounts often play a role in estate planning, whether through beneficiary designations, trusts, or transfer-on-death instructions. A prenup should align with these plans to prevent conflicts.
For example, if one spouse intends for an account to pass to children from a prior marriage, the prenup can waive the other spouse’s rights under Florida’s inheritance laws. An Orlando prenup lawyer can coordinate these provisions with wills and trusts.
Frequently Asked Questions
Can a prenup keep my investment accounts completely separate in divorce?
Yes. A prenup can classify existing and future accounts as separate property, protecting both the principal and growth.
Do I have to disclose my accounts in the prenup?
Yes. Full and fair disclosure of all assets, including investment accounts, is required for enforceability.
What happens if I add marital funds to my separate account?
Without a prenup, this could be considered commingling and make the account marital. A prenup can preserve its separate status if the transfer is documented and agreed upon.
Can a prenup address how we will manage joint investment accounts?
Yes. The agreement can set rules for contributions, withdrawals, and division in divorce.
Will the prenup protect income from investments?
Only if it specifically states that the income is separate property. Without this, income earned during marriage is marital property.
Can we change our investment account provisions later?
Yes. Florida law allows prenups to be amended by mutual written agreement after marriage.
The McKinney Law Group: Orlando Prenup Lawyers Helping Couples Plan Ahead
We believe a prenuptial agreement is an act of preparation, not pessimism. Our Orlando legal team ensures your prenup is fair, enforceable, and built to protect your interests.
Call 813-428-3400 or email [email protected] to speak with an attorney.