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By: Jarbath Pena Law Group
Divorce is never easy. It’s not just the legal process—it’s the emotional toll, the stress of an uncertain future, and the overwhelming number of decisions that have to be made all at once. When you’re in the middle of it, it’s completely understandable to want to get through it as quickly as possible, to finalize everything and move forward with your life. But rushing through the process or overlooking key details now can lead to problems down the road—problems that may force you to return to court in a few years to fix issues that could have been addressed from the start.
That’s why taking the time to get it right the first time, with the right legal guidance from the compassionate advocates of the Jarbath Peña Law Group, is so important. Ensuring that every aspect of your divorce is carefully considered now can save you the frustration and expense of modifications later. In the first part of this series titled: Before You Sign. . . Critical Oversights in Florida Divorce Agreements we covered some of the fundamental issues that often get overlooked. In this segment, we’ll take a closer look at three more critical financial and logistical concerns, including health insurance, tax implications, and future educational expenses for children.
We understand how difficult this time is for you. You’re dealing with the emotional strain of a major life transition while also trying to make complex financial and legal decisions. Our goal is to help you navigate these challenges with clarity and confidence so you can move forward with peace of mind. Let’s explore some of the most commonly overlooked issues that, if handled properly now, can make your life much easier in the years to come.
Tax Issues: The Overlooked Financial Consequence of Divorce
Taxes may not be the first thing on your mind when going through a divorce, but failing to address key tax implications can lead to financial headaches down the road. Many people assume that once the court finalizes the divorce, their tax situation will naturally fall into place. However, if these issues aren’t properly planned for in your divorce order, you could face unexpected tax liabilities or miss out on potential benefits.
One of the most significant tax considerations is filing status. The IRS determines your filing status based on your marital standing as of December 31 of the tax year. This means that if the court finalizes your divorce before the end of the year, you must file as either “Single” or “Head of Household” (if you qualify) rather than “Married Filing Jointly” or “Married Filing Separately.” The difference in tax rates and deductions can have a major impact on your finances, so it’s important to plan accordingly.
Beyond filing status, other critical tax-related issues to consider include:
Dependency exemptions and tax credits for children. Who will be allowed to claim the child on their tax return? The parent with primary custody is generally entitled to claim the child, but you can negotiate this and include your decision in a divorce agreement. The Child Tax Credit and Earned Income Tax Credit can provide significant financial relief, so both parents should be clear on how they can allocate these benefits.
Alimony tax implications. Under the Tax Cuts and Jobs Act, alimony is no longer tax-deductible for the paying spouse or considered taxable income for the receiving spouse for divorces finalized after December 31, 2018. If your divorce agreement was established before this change, different rules may apply.
Division of retirement accounts. Transferring funds from a retirement account as part of a divorce settlement requires careful handling to avoid unnecessary tax penalties. The recipient may face immediate taxation and early withdrawal penalties if you do not use a Qualified Domestic Relations Order (QDRO) for 401(k) and pension distributions.
Capital gains taxes on property division. If one spouse keeps the marital home or other high-value assets, they could later face capital gains taxes when selling the property. Understanding these tax consequences can help in deciding whether to sell the home immediately or negotiate a different asset division.
Divorce is already financially stressful, and tax issues can add another layer of complexity. A well-structured divorce agreement should address asset division and support obligations and account for the potential tax consequences of these decisions. Consulting with a family law attorney and a tax professional can help you avoid costly mistakes and set yourself up for a stable financial future.
Example
Suppose you and your ex-spouse, Jamie, divorced in November. The agreement doesn’t specify who will claim your two children as dependents. Both of you file tax returns claiming the kids, triggering an IRS audit. Now, you’re facing fines, penalties, and an expensive resolution process.
How to Avoid This?
Work with your attorney to ensure your divorce agreement addresses key tax issues. Specify who will claim the children as dependents each year and how you will divide any tax refunds or liabilities from jointly filed returns. For example, you might agree to alternate years or allow the higher-earning parent to claim the child or children as dependents.
Health Insurance and Medical Expenses - another commonly overlooked problem
Health insurance and medical expenses can become a major point of conflict after a divorce if not properly addressed in the divorce agreement or court order. While Florida Statutes § 61.13(1)(b) requires parents to provide for their child’s healthcare, many divorce agreements fail to clearly outline how co-parents will handle uninsured or extraordinary medical expenses post-divorce. This lack of specificity can lead to disputes, unexpected financial strain, and even gaps in medical care for children.
One of the most common issues arises when one parent is responsible for providing health insurance, but life circumstances change. For example:
The parent providing coverage may lose their job, resulting in a loss of health insurance benefits.
They may fail to pay the premiums, leading to an unexpected policy cancellation.
The insurance provider may deny coverage for necessary treatments, leaving parents to negotiate how to split out-of-pocket costs with no guidance from the divorce decree.
Additionally, divorce agreements often don’t account for extraordinary medical expenses, such as a child’s:
Therapy, counseling, or mental health care;
Braces, vision care, or orthodontic treatments;
Specialized medical treatments or procedures not covered by insurance; and
Chronic illness care or long-term medical conditions.
Without a clear plan, one parent may end up shouldering these costs alone, which can cause financial hardship, significant tension, and a devolving relationship between co-parents. To prevent this, include the following in a well-structured divorce agreement:
Who is responsible for maintaining health insurance, and what happens if coverage is lost;
How parents will divide out-of-pocket and uninsured medical expenses;
A plan for handling disputes over medical costs or coverage denials; and
Guidelines for elective medical procedures (such as orthodontics or therapy).
Taking the time to carefully structure these provisions now can prevent financial and legal headaches later. An experienced family law attorney can help ensure that your divorce agreement protects your financial interests and your child’s healthcare needs, minimizing the risk of future conflicts.
Example
Your child, Emma, needs braces that cost $5,000. While your agreement states that your ex-spouse, Alex, will continue providing health insurance, it doesn’t address uninsured expenses like orthodontics. Alex refuses to contribute, arguing that braces aren’t a medical necessity. You feel this is important for your daughter and feel betrayed that Alex won’t contribute to this necessary expense. The whole situation leaves you scrambling to pay this significant bill on your own and causes undue hardship on your finances. It also leaves you feeling lingering anger and resentment toward Alex, eroding the cooperative co-parenting relationship that you know is best for Emma.
How to Avoid This
Include detailed provisions about health insurance and medical costs in your marital settlement agreement. Specify who will pay for premiums, co-pays, deductibles, and uninsured or uncovered expenses. Try to think ahead about what might logically come up for your child, including mental health assistance if your child shows any early signs of needing such help. If your child has known medical needs, such as orthodontics or therapy, outline how you and your spouse will share these costs. Be as specific as possible. If a judge is deciding these issues, be sure your lawyer informs the judge of all foreseeable issues that might arise. Clear, upfront agreements reduce the likelihood of future disputes.
Future Educational Expenses for Children: Planning Ahead to Avoid Disputes
While Florida law does not require parents to contribute to their children’s college education, many parents want to ensure their children have the financial support needed to pursue higher education. Unfortunately, if you do not clearly address educational expenses in a divorce agreement, it can lead to disagreements and financial strain down the road.
Many parents assume they will naturally contribute to their child’s education when the time comes, but without a legal obligation in place, one parent may refuse or feel unable to help when tuition bills start arriving. A well-structured divorce agreement can prevent these conflicts by outlining expectations and obligations for future educational costs.
Some key considerations to address in your divorce agreement include:
Types of expenses covered. Tuition is only one part of the cost of higher education. Will parents also contribute to room and board, books, fees, transportation, or other living expenses? Defining which parent pays for which expenses can prevent disputes later.
Savings plans and funding sources. If there is already a 529 savings plan or other educational fund in place, who will control it? Will both parents contribute to it? If no savings plan exists, are parents expected to set aside funds in the future? If so, when does that begin, and how much is each parent responsible for contributing?
Contribution percentages. How will costs be divided between the parents? Will it be a 50/50 split, or will contributions be based on income levels at the time? Clarifying this upfront avoids financial disagreements later.
Decision-making authority. Who will decide which colleges the child applies to and attends? If one parent is covering a significant portion of the costs, they may want a say in the decision-making process.
Scholarships and financial aid. If the child receives scholarships or grants, how will that impact parental contributions? Will parents only need to cover what remains after financial aid is applied?
Even though Florida law does not require parents to pay for college, a properly structured divorce agreement can ensure both parents are clear on their obligations. By addressing educational expenses upfront, you can protect your child’s future and avoid unnecessary stress when it’s time to make college decisions. Consulting with a family law attorney can help you create an agreement that reflects your child’s best interests while ensuring financial fairness for both parents.
Example
Your son, Ethan, is excited to have been accepted to a private university with a tuition of $40,000 per year. You assumed your ex-spouse, Lisa would help pay, but she argues that the divorce agreement doesn’t require her to contribute. Now you’re stuck trying to figure out how to finance Ethan’s education entirely on your own or crushing his dreams of attending his preferred school.
How to Avoid This
Even though not legally required, include voluntary agreements for future education costs in your divorce terms. Address tuition, housing, books, and other expenses. For younger children, consider setting up a joint savings account or 529 plan to contribute to over time. By planning ahead, you can avoid future financial and emotional stress.
Take the Next Step—We’re Here to Help
Divorce is tough, but you don’t have to go through it alone. At Jarbath Peña Law Group, we understand the emotional and legal complexities you’re facing, and we’re here to guide you every step of the way. As a boutique law firm based in downtown Miami, we provide personalized, high-quality legal representation to clients throughout Miami-Dade, Broward, and Palm Beach counties.
From divorce and child support to alimony and modifications, we help our clients navigate family law matters with clarity and confidence. Our firm is committed to educating you about your rights, protecting your interests, and ensuring that your divorce agreement is thorough and fair—so you don’t have to go back to court later to fix costly mistakes.
Don’t leave your future to chance. Let us help you get it right the first time so you can move forward with peace of mind. Contact Jarbath Peña Law Group today to schedule a consultation. We’re ready to listen, fight for your rights, and help you build the foundation for the next chapter of your life.
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