Florida Divorce Financial Planning: Alimony Reform, Equitable Distribution & FRS Pensions

Florida overhauled its alimony law on July 1, 2023 — eliminating permanent alimony entirely and capping durational awards based on marriage length. That's a landmark change for anyone going through a Florida divorce, but it's only one piece of a complex financial picture. Florida is an equitable-distribution state (not community property), FRS pensions require a Domestic Relations Order different from an ERISA QDRO, and the Florida homestead exemption creates deed complications that catch spouses off guard. Here's what the rules actually say — and what they mean for your settlement.

1. Equitable distribution: how Florida divides marital assets

Florida Statute § 61.075 governs the division of marital assets and liabilities.¹ The framework has three steps:

1. Classify each asset: Is it marital or nonmarital? Marital assets include all assets acquired by either spouse during the marriage, plus the active appreciation on nonmarital assets resulting from either spouse's effort. Nonmarital assets include pre-marital property, inheritances, and gifts from third parties — but only if they haven't been commingled.
2. Value each marital asset: Courts use the fair market value at the time of the equitable-distribution award, unless a different date is needed for equity.
3. Divide the marital estate: Starting point is equal distribution. Departures require written findings by the court, supported by one or more of the § 61.075(1) factors.

Factors for unequal distribution include contribution to the marriage (including care of children and support of the other spouse's career), economic circumstances of each party, duration of the marriage, interruption of personal careers or education, the desirability of retaining assets intact (e.g., a business), and intentional dissipation or waste of assets after the date of filing.¹

2. Florida's 2023 alimony reform: what changed on July 1, 2023

Governor DeSantis signed Senate Bill 1416 on June 30, 2023, effective July 1, 2023. The law made the most significant changes to Florida alimony in decades.²

Permanent alimony is gone. For divorces filed on or after July 1, 2023, courts may no longer award permanent alimony. This is the headline change — Florida had been one of only a handful of states that still permitted it.

Remaining alimony types under F.S. § 61.08:²

• Temporary alimony: In-place during the divorce proceeding only. Ends at final judgment.
• Bridge-the-gap alimony: Covers short-term legitimate needs while transitioning to single life. Maximum duration: 2 years. Non-modifiable as to amount or duration.
• Rehabilitative alimony: Supports a spouse redeveloping career skills or education under a specific, detailed plan submitted to the court. The plan must identify the goal and timeline — general assertions of "need to find work" won't qualify. Can be modified or terminated on completion of the plan, noncompliance, or substantial change in circumstances.
• Durational alimony: For spouses who need economic assistance for a set period. This is now the primary post-divorce support vehicle for marriages that don't qualify for bridge-the-gap.

Durational alimony caps by marriage length

Amount limits: Durational alimony may not exceed the lesser of the recipient's reasonable need or 35% of the difference between the parties' net incomes at the time of the final judgment.

Retirement modification: The 2023 reform also established that an obligor may petition for modification based on planned retirement no sooner than 6 months before the retirement date. Courts must consider the ages of the parties, the reasonableness of the retirement, and whether the obligee has sufficient assets, income, or the ability to earn income.²

Post-TCJA federal tax note: For divorces finalized after December 31, 2018, alimony is not deductible by the payer and not taxable income to the recipient under IRC § 71 (repealed by TCJA § 11051). This is federal law — Florida conforms. The gross alimony number is no longer the right number to negotiate around; what matters is after-tax present value for both parties. See our alimony tax treatment guide.

3. Florida Retirement System (FRS) pensions: the DRO process

Florida state employees, teachers, and many local government workers participate in the Florida Retirement System (FRS). FRS is a government plan — it is not covered by ERISA, so the federal QDRO rules do not apply.³

What's required instead: A Domestic Relations Order (DRO) that complies with FRS administrative rules. FRS provides model QDRO forms on its website (frs.fl.gov), but those forms must be adapted to the specific terms of your settlement — the generic model is a starting template, not a final document.

How the benefit is calculated:

• If the parties were married for the entire member's FRS service: the alternate payee (non-member spouse) receives 50% of the member's monthly benefit.
• If not married the entire time: (years of marriage overlapping FRS service ÷ total years of FRS service) × 50% of the member's benefit.

Critical timing issue: FRS benefit payments to the alternate payee don't begin until the member actually retires. Unlike some private ERISA plans where the alternate payee can begin receiving payments at the member's earliest retirement eligibility date, an FRS alternate payee must wait for the member to elect retirement. This deferred start can span years — or decades — and has a material impact on the present value of the benefit. A CDFA models the NPV at different assumed retirement ages so you can compare the FRS benefit fairly against other settlement assets.

For federal government employees (not FRS), FERS/CSRS pensions use the OPM Court Order Acceptable for Processing (COAP) — see our pension division guide for the FERS/CSRS framework.

4. Florida homestead: the deed complication most couples miss

Florida's homestead protection is codified in Article X, Section 4 of the Florida Constitution.⁴ The creditor-protection aspect (shielding the home from forced sale by most creditors) is well-known. Less understood is the alienation restriction: a spouse cannot transfer, mortgage, or encumber the family homestead without the other spouse's joinder in the deed — regardless of whose name is on title.⁴

What this means in divorce:

• If the marital home is homestead property and the spouse keeping the home wants to refinance to buy out the departing spouse, both spouses must sign the refinance documents until the divorce is final and title is properly transferred. Banks routinely flag this and require both signatures.
• A quitclaim deed from the departing spouse, by itself, doesn't fully clear the title for homestead purposes until the divorce is entered and the homestead character changes. Title companies in Florida require specific divorce documents before issuing clear title insurance.
• The buyout math also needs to account for the capital gains consequences. The § 121 exclusion drops from $500,000 (married filing jointly) to $250,000 (single) after the divorce is entered — if there's meaningful appreciation, the timing of when title transfers can shift a significant tax liability. See our home keep/sell/buyout calculator.

5. Business goodwill: the 2024 Florida amendment

Florida has historically permitted courts to include personal goodwill in equitable distribution — unlike most states that limit business valuation in divorce to enterprise (transferable) goodwill. In 2024, the Florida Legislature amended the equitable distribution statute to exclude personal goodwill from the definition of marital assets, aligning Florida more closely with the majority-rule approach.¹

This matters significantly for medical practices, law firms, accounting firms, and other professional services businesses where a large portion of value is attributable to the individual's personal reputation, patient or client relationships, and specialized skills — rather than the business's transferable systems, brand, and recurring revenue. Under the pre-2024 framework, those personally attributed values could be divided. After 2024, the analysis focuses on enterprise goodwill only.

Two practical consequences:

• Business valuations in Florida divorces filed after the 2024 amendment typically produce lower marital values for professional practices than they would have under the prior law — which changes the entire settlement equivalency analysis.
• The embedded tax under IRC § 1041 still attaches to any business interest transferred at settlement: the receiving spouse takes over the transferor's tax basis (zero basis in a sole proprietorship purchased with marital earnings, for example). A CDFA models the after-tax value of the business interest against other settlement assets.

6. Child support: the 73-overnight threshold

Florida child support is governed by F.S. § 61.30, using an income-shares model: courts calculate each parent's proportional share of the combined net income, then apply a statutory guidelines chart to determine the presumptive monthly obligation.⁵

The 20% time-sharing cliff: When both parents have at least 73 overnights per year (20% of the year), the basic support obligation is multiplied by 1.5 before being divided proportionally. This adjustment — designed to recognize both parents' direct expenditures — can move the monthly support amount by hundreds of dollars when one parent is near the 73-overnight line. Settlement negotiations sometimes specifically address this threshold, and parenting plan structure can have direct financial implications.

Income for support purposes: Florida's income definition is broad — salary, wages, bonuses, commissions, business income, disability, workers' compensation, Social Security, pension and retirement income, and interest and dividends are all included. Voluntary unemployment or underemployment can result in the court imputing income at a historical or market rate.

7. No state income tax: the Florida settlement advantage

Florida has no individual state income tax. This is a meaningful financial planning detail that changes the after-tax math on several settlement decisions compared to divorcing in California, New York, or other high-tax states:

• QDRO distributions: A direct QDRO distribution from a 401(k) under IRC § 72(t)(2)(C) faces federal income tax only — no state layer. In a state with a 5–10% income tax, this could be worth thousands of dollars per distribution.
• Roth conversions post-divorce: The lower post-divorce bracket combined with no Florida state income tax makes the Roth conversion window after settlement significantly cheaper than in high-tax states. A CDFA models the conversion opportunity against the bracket compression from the filing-status shift to single.
• Alimony settlement value: For post-TCJA divorces, neither side deducts or reports alimony. The no-state-income-tax environment doesn't change the federal net — but in cross-state situations (e.g., one spouse moving to a high-tax state post-divorce), the after-tax value of any remaining taxable income needs to be modeled with each spouse's eventual tax domicile in mind.

8. Automatic Temporary Injunctions (ATIs) in Florida

When a Florida divorce is filed and the other party is served, the court enters Automatic Temporary Injunctions under Florida Family Law Rule of Procedure 12.610 and F.S. § 61.43.⁶ These function similarly to California's ATROs but with Florida-specific scope. Both parties are enjoined from:

• Disposing of, destroying, transferring, encumbering, or concealing marital assets outside the ordinary course of business or usual course of life
• Canceling, modifying, terminating, or allowing to lapse any coverage of any insurance policy — health, life, auto, disability — that currently insures a party or minor child
• Changing beneficiaries on any life insurance, annuity, or retirement account
• Relocating a minor child outside of Florida without written consent or court order

Violating an ATI is contempt of court and can result in the court ordering the transfer reversed, fee-shifting, and other penalties. Understand the restrictions before you take any financial action after service.

The CDFA's role in a Florida divorce

Florida-specific complexity — the 2023 alimony reform's durational caps and 35%-of-income-difference ceiling, FRS pension DRO valuation (including the deferred-start timing discount), the homestead deed and § 121 timing interaction, the 2024 business goodwill amendment, and the 73-overnight child support cliff — stacks on top of the federal financial issues every divorce involves: QDRO mechanics for private plans, post-TCJA alimony present-value modeling, carryover basis traps under IRC § 1041, IRMAA spikes from divorce-year income, and Roth conversion opportunities in the post-divorce window.

A CDFA-credentialed fee-only financial advisor familiar with Florida law does all of it: after-tax present value of the alimony obligation under the new durational framework, FRS community-share NPV modeling at multiple retirement ages, business equity after the 2024 goodwill amendment, and a side-by-side settlement equivalency analysis before the MSA is signed. Unlike a divorce attorney, a CDFA charges for financial expertise specifically — and has no incentive to push a particular product or outcome.

Sources

1. Florida Statutes § 61.075 — Equitable Distribution of Marital Assets and Liabilities. Primary statutory source for Florida equitable distribution: equal-distribution presumption, marital vs. nonmarital asset classification, active appreciation doctrine, court findings required for unequal split, and 2024 legislative amendment excluding personal goodwill from marital assets. The 2025 Florida Statutes online (leg.state.fl.us) reflects the current version including 2024 amendments.
2. Florida Senate Bill 1416 (2023) — Alimony Reform. Official Florida Senate bill summary for SB 1416 signed into law June 30, 2023, effective July 1, 2023. Amended F.S. § 61.08 to eliminate permanent alimony, establish durational alimony caps by marriage length (50%/60%/75%), cap alimony amount at the lesser of reasonable need or 35% of net income difference, and create the retirement-modification petition right no sooner than 6 months before planned retirement. Cross-referenced with Florida Bar analysis and lawbernstein.com 2025 update.
3. Florida Retirement System — Qualified Domestic Relations Orders. Official FRS Division of Retirement guidance on domestic relations orders for FRS Pension Plan and FRS Investment Plan. FRS Pension Plan is a government plan not subject to ERISA; division requires an FRS-compliant DRO. FRS Investment Plan uses ERISA QDRO. Benefit calculation for partial-marriage coverage: (marriage years / total FRS service years) × 50%. Payments begin only when member retires.
4. Florida Constitution, Article X, Section 4 — Homestead Exemption. Constitutional protection against forced sale and alienation restriction requiring spousal joinder in any deed or mortgage on homestead property. Governs half-acre within municipality and 160-acre rural homestead. Interacts with title transfer mechanics in divorce settlements; title companies require court-order documentation before issuing clear title insurance post-divorce.
5. Florida Statutes § 61.30 — Child Support Guidelines. Florida's income-shares model for child support calculation: combined net income, proportional share, statutory guidelines chart. The 73-overnight threshold (20% of the year) triggers the 1.5x multiplier adjustment. Income definition includes salary, business income, Social Security, pensions, interest, and dividends.
6. Florida Family Law Rule of Procedure 12.610 — Temporary Injunctions. Florida automatic temporary injunctions entered at filing: asset preservation, insurance maintenance, beneficiary-change prohibition, and child-relocation restriction. Functions as Florida's analog to California's ATROs. Violation is contempt of court.

Florida statutes cited reflect the 2025 Florida Statutes, incorporating 2024 amendments. Federal tax treatment references (TCJA § 11051, IRC § 1041, § 121, § 72(t)(2)(C)) reflect 2026 federal rules per IRS Rev. Proc. 2025-32. Alimony reform effective dates and durational caps reflect SB 1416 (effective July 1, 2023). Values and procedures verified May 2026.