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Divorcing in a Down Market – Pros and Cons

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Should You Divorce During a Down Market? Understanding the Pros and Cons
How market volatility, long-term investing, and the Collaborative Divorce process intersect

When the markets drop, your investments, retirement accounts, and even business valuations may look very different than they did just a few months ago. If you’re considering divorce in a time like this—especially after recent economic turbulence and tariffs—it’s natural to feel uncertain. But believe it or not, there may be strategic advantages to divorcing during a down market, particularly if you approach the process thoughtfully.

✅ Pro: A Unique Opportunity for Buy-and-Hold Investors

If you’re a long-term investor who believes the market will eventually recover (as history suggests it usually does), a down market may present a silver lining. Here’s why:

Let’s say part of your marital estate includes mutual funds, ETFs, or stocks that have dipped in value. If you receive those investments as part of your divorce agreement, you’re essentially getting more shares at a lower “price tag.” Over time, if the market rebounds, those shares may significantly increase in value—benefiting you in the long run.

In other words, if you’re a buy-and-hold investor, receiving a larger portion of your share of marital assets in investments during a downturn could position you well for future growth. You’re not just accepting lower-value assets—you’re planting seeds for potential recovery and wealth.

⚠️ Con: Lower Valuations Can Lead to Complications

Of course, not everything is rosy in a down market. If your marital assets include real estate, business interests, or retirement accounts, their reduced value may cause concern. One spouse might feel they’re losing out if an asset is divided when its value is temporarily depressed.

Also, dividing investments or retirement accounts during a low point can create tension, especially if one party is more risk-averse. This is where fear and conflict can escalate—unless you have a process in place to manage it.

🤝 How Collaborative Divorce Can Help

In a traditional court-based divorce, you may find yourself locked in a tug-of-war over who “wins” and who “loses” financially. But in a Collaborative Divorce, you and your spouse commit to resolving issues together, outside of court, with the support of a professional team.  Each of you have your own separate lawyers prohibited from taking your case to court and to give you independent legal advice, and there are usually also neutral specialists to help in finances and family dynamics.

Here’s how it helps in a down market:

  • Customized Financial Scenarios: A neutral financial professional can work with both spouses to explain investment values, simulate recovery scenarios, and suggest creative ways to divide assets based on both of your interests and risk tolerances—even in uncertain times.
  • Avoiding a Fire Sale: Collaborative teams counsel you to maintain the status quo until there is an agreement to do otherwise, which can help you avoid the rush to liquidate investments, allowing you to stay true to your long-term financial strategy.
  • Preserving Relationships: Especially important if you’re co-parenting, Collaborative Divorce helps you reduce stress and focus on your future, not just your fears.

👤 Led by a Trusted Collaborative Professional

Adam B. Cordover is a leader in Collaborative Divorce, having trained lawyers, financial professionals, and mental health experts throughout the U.S., Canada, Israel, and France. He also co-authored Building a Successful Collaborative Family Law Practice, a book published by the American Bar Association. With deep experience in complex financial matters, Adam can help guide you through divorce in a way that protects your goals and honors your long-term financial values.

💬 We Can Help

If you’re facing divorce during a volatile market, you’re not alone—and you have options. We can help you make informed, thoughtful decisions that protect your future. Contact Family Diplomacy: A Collaborative Law Firm by clicking the button below.

Comment Comment Speak with a Collaborative Lawyer

Family Diplomacy: A Collaborative Law Firm has a virtual practice and represents clients in South Florida, Central Florida, and North Florida.  We also have offices in Tampa, St. Petersburg, and Sarasota.

Are Real Estate Syndications Considered Marital Property in a Florida Divorce?

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Real estate syndications have become a popular investment strategy for high-net-worth individuals and savvy investors seeking passive income and portfolio diversification. However, if you are facing a divorce in Florida, you may be wondering: Is my investment in a real estate syndication considered marital property? And if so, how is it valued and divided?

The answer depends on several factors, including when the investment was made, how it was funded, and whether any legal agreements protect it. In this post, we’ll explore how Florida law treats real estate syndications in divorce and what you need to know about valuation and division.

Are Real Estate Syndications Marital Property in Florida?

In Florida, marital property includes assets acquired by either spouse during the marriage, regardless of whose name is on the title or investment documents. Conversely, nonmarital (or separate) property includes assets acquired before the marriage, through inheritance, or via a gift from a third party.

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How Tax Loss Harvesting Can Turn Non-Marital Investments Into Marital Assets

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If you’re an investor going through a divorce, you likely have a keen eye on your finances. You may already be familiar with tax loss harvesting, a strategy that can help reduce your tax bill by selling investments at a loss to offset capital gains. While this technique can be a smart financial move, it can also have unintended consequences in divorce—potentially turning what you thought was your separate, non-marital property into a shared marital asset.

What Is Tax Loss Harvesting?*

Tax loss harvesting is a strategy that can be used to lower your tax liability. For example, if you have investments in a taxable brokerage account that have lost value, you can sell them at a loss to offset capital gains from other investments. This reduces your overall taxable income and can lead to significant tax savings.

There are many rules associated with tax loss harvesting.  For example, you cannot sell a mutual fund at a loss and then immediately repurchase that same mutual fund.  However, one strategy that many investors utilize is to sell one investment at a loss and then purchase a similar, but different, investment.  For example, you might sell VTSAX, the Vanguard U.S. total stock market index fund, at a loss and purchase VFIAX, the Vanguard S&P 500 index fund, which is highly correlated with VTSAX.  The White Coat Investor website has a really good explainer on tax loss harvesting.

Many investors use this approach as part of a long-term financial strategy, reinvesting the proceeds into different securities to maintain their investment portfolio. However, if you are going through a divorce, you must be careful about how and when you execute tax loss harvesting.

*Please note that we are not accountants, financial advisors, or tax lawyers, this information is not intended to provide advice, and this is for educational purposes only.

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Collaborative Divorce: Control Your Own Destiny

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When you’re facing the difficult decision to divorce, it’s natural to feel overwhelmed. And when you are used to making high stakes decisions, the feeling of powerlessness is just unacceptable. Decisions about your family, finances, and future carry immense weight. The last thing you want is to surrender control of your destiny to a judge in a public courtroom. That’s why many C-Suite executives, doctors, business owners, high-ranking military officers, and other professionals in Florida choose Collaborative Divorce.

What Is Collaborative Divorce?

Collaborative Divorce is a unique and private approach to family law that puts you and your spouse in charge. Instead of battling it out in court, you work together with a team of professionals to craft agreed upon solutions tailored to your family’s needs. Each of you have your own separate lawyers to provide you with independent legal advice.  The Collaborative Lawyers are there solely for the purpose of reaching an out-of-court agreement, and are prohibited, once the Collaborative Process begins, from being used to fight in court.  Additionally, your Collaborative Team may include a financial expert to navigate tricky financial discussions and a Facilitator (who is a licensed mental health professional) to keep discussion focused on the future rather than the disputes that led to the divorce.

Maintain Control Over Critical Decisions

Unlike traditional litigation, Collaborative Divorce fosters cooperation rather than conflict. You, your spouse, and your lawyers share the same goal: to find resolutions that work for everyone in your family. This approach gives you the power to decide how to divide assets, plan for your children’s future, and address any other issues that arise. Instead of a judge dictating your future, you together with your spouse maintain control over these critical decisions.

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Simplifying Divorce for High Net Worth Individuals: Working With Your CPA or Financial Advisor

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The Challenge of Divorce for High Net Worth Individuals

Navigating a divorce is never easy, and for high net worth individuals, the process can feel even more overwhelming. Between managing the complexities of Florida Family Law Rule of Procedure 12.285—commonly known as mandatory disclosure—and safeguarding your financial future, it’s natural to want to simplify the experience and delegate much of the work. That’s where a skilled family law attorney can be invaluable. By working closely with your CPA or financial advisor, we can streamline the disclosure process and minimize the demands on your time and energy.

Understanding Mandatory Disclosure

Mandatory disclosure requires each party in a divorce to provide detailed financial documentation. For high net worth individuals, this often includes extensive information about investments, business interests, real estate holdings, and more. The sheer volume of documentation can be daunting, but it doesn’t have to be. If you already have a trusted CPA or financial advisor, they are likely familiar with much of your financial landscape. Our team can work directly with them to gather and organize the required information, so you don’t have to get bogged down in the details.

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8 Tips For Co-Parenting After a Hurricane

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Co-parenting during a divorce is challenging under normal circumstances, and dealing with the aftermath of a devastating hurricane adds another layer of difficulty. Here are some practical tips to navigate this situation effectively.  As a preview, many of these tips can be best accomplished within a Collaborative Divorce.

1. Prioritize the Children’s Well-Being

Keep routines as consistent as possible, such as school, meals, and bedtime, to provide stability.  Be honest with your children in an age-appropriate way about what’s happening but reassure them they are safe and loved.  Avoid speaking negatively about the other parent in front of the children.

2. Communicate Effectively

Use clear, respectful, and focused communication to coordinate on parenting issues.  Consider using co-parenting apps like OurFamilyWizard or TalkingParents to document agreements and streamline communication if direct interaction is too challenging.

3. Develop a Flexible Parenting Plan

A hurricane might have disrupted your previous arrangements, so work together to create a temporary plan that accounts for housing, transportation, and other logistical challenges.  Be prepared to adjust custody schedules based on access to safe housing and resources.

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How Are Medical School Student Loans Handled In a Florida Divorce?

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When you’re facing a divorce in Florida, one of the complex financial issues you might encounter is how to handle student loans, particularly medical school student loans. These debts can be substantial, often amounting to hundreds of thousands of dollars, and it’s natural to wonder how they will be treated during the divorce process. Understanding your options and rights is crucial, especially if you and your spouse are seeking a Collaborative Divorce, which focuses on finding amicable solutions privately rather than through a public divorce court battle.

Understanding Marital vs. Non-Marital Debt – Med School Loans

In Florida, the law distinguishes between marital and non-marital assets and debts. Marital debts are those incurred during the marriage, regardless of whose name they are in or who incurred them. Non-marital debts, on the other hand, are typically those incurred before the marriage or after the date of separation.

If you took out medical school loans before you were married, these debts are generally considered non-marital, meaning you would be solely responsible for them. However, if you took out the loans during the marriage, things get a bit more complicated.

Medical School Student Loans as Marital Debt

If your medical school student loans were taken out during your marriage, they will be considered marital debt. This means that both you and your spouse could be responsible for repaying them, even if it was taken out in only one spouse’s name.  If some student loans were taken out prior to the marriage and other medical school debt was taken out during the marriage, then some loans will likely be considered non-marital and other med school loans will be considered marital. In a traditional divorce, this could lead to a lengthy and contentious battle, especially if the loans are significant.  More commonly, especially in a Collaborative Divorce, only one spouse ends up taking responsibility for paying off the marital portion of the loans, while they also typically get something in return to offset the debt.  Alternatively, the other spouse may take on a different set of debts as an offset.

In a Collaborative Divorce, you and your spouse have the opportunity to work together to find a fair and equitable solution. The Collaborative Process encourages open communication and cooperation, allowing both of you to express your concerns and preferences.

At the end of the day, a court will likely order, and most divorcing spouses agree on, an equal distribution of your family’s marital net worth.  So, for example, if your family has a total of $3 million in marital assets and $1 million in marital debts, equaling a net marital estate of $2 million, then likely each of you will end up with around a net worth of $1 million from the marital estate (though most people agree to an equal distribution of your marital assets/debts, you can also agree to an unequal distribution if it makes sense for your family or as an alternative to alimony).  For this reason, when determining how you are going to split your assets and debts, it is important to look at not just one debt, like medical school student loans, but at your family’s full financial picture.

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Cordover Presents on Collaborative Mediation for International Academy of Collaborative Professionals

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On July 17, 2024 at 1:00 pm Eastern Time, Family Diplomacy managing attorney Adam B. Cordover will co-present a webinar on “Collaborative Mediation: Engaging Mediators in the Collaborative Process.”  The presentation is for the International Academy of Collaborative Professionals and sponsored by OurFamilyWizard.

Adam’s co-presenters are Heather McArthur, co-founder and president of Collaborative Professionals of Central Florida and a Florida Supreme Court Certified Family Law Mediator, and Keith Grossman, a Florida Supreme Court Approved Primary Family Mediation Trainer and president of the Southwest Florida Collaborative Professionals Association.

Click Here to Learn More and Register

Adam’s Philosophy on Collaborative Divorce

Adam’s philosophy is that almost anybody going through divorce can benefit from a Collaborative Divorce, but that we professionals need to have as many tools as possible to help as many families as possible.  Rather than try to force a family into a particular model of Collaborative Practice, we should shape a model to meet that family’s needs.  Many Collaborative Lawyers have heard of models such as One-Coach/Neutral Facilitator, Two Coach, or Lawyer-Only.  This presentation will discuss a different model: Collaborative Mediation.

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Paralegal Divorce Mediation in Florida

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Beginning in August 2024, Family Diplomacy will offer paralegal divorce mediation with our executive paralegal, Jennifer Gunnin.

Going through a divorce can be tough. You may feel sad, angry, and stressed. But there’s a way to make it easier. Jennifer, who has worked closely with divorcing clients at Family Diplomacy: A Collaborative Law Firm since 2013, can help.  If you are in Florida, here is why you may want to consider working with Jennifer in a paralegal divorce mediation.

Paralegal Divorce Mediation

First, Jennifer is a trained professional who has over a decade experience working with divorcing clients. She has seen some things. Like all mediators, she cannot give legal advice, but she can explain things in a simple way so you can understand and choose what common elements you want in your parenting plan and marital settlement agreement. One of her goals is to ensure that you don’t feel lost or confused about what’s happening.

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Collaborative Jewish Divorce

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In these uncertain times, if you are Jewish and considering divorce, you may wonder where you can safely turn.  I have watched in horror at the chants of “Jews will not replace us” in Charlottesville in 2017, the massacres of Israeli civilians on October 7th, and the more recent intimidation of Jewish students on campuses across the U.S.  I have personally experienced people telling antisemitic jokes to me, apparently not realizing that I was Jewish.   If, with this as a backdrop, you are facing the upheaval of divorce, let us help you and your family through a Collaborative Jewish Divorce.

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