Florida is not a community property state. It follows equitable distribution, which means a court divides marital assets fairly rather than automatically splitting them 50/50 during a divorce. However, since July 1, 2021, married couples in Florida can voluntarily create a community property trust under the Florida Community Property Trust Act. This gives them access to specific tax benefits that community property states offer by default.
What “Community Property State” Actually Means
Nine states in the U.S. treat assets acquired during marriage as jointly owned by both spouses by default. Those states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. In each of these states, each spouse automatically owns 50% of the marital property, and that split applies when a couple divorces or one spouse dies.
Florida is not in that group. It is a common law property state, which means the spouse who acquires an asset generally owns it. Ownership follows title, not the marriage itself.
This distinction matters a great deal during a divorce. It also matters for estate planning, which is something many Floridians overlook until it is too late.
How Florida Divides Property in a Divorce
Florida courts use equitable distribution to divide marital assets when a couple divorces. Equitable does not mean equal. It means fair, and a judge has significant discretion in deciding what that looks like in each case.
Courts start with a presumption of a 50/50 split, but they can deviate based on specific circumstances. Florida Statute § 61.075 outlines what those factors are.
A judge will typically consider:
- The length of the marriage
- Each spouse’s earning capacity and financial situation
- Career sacrifices one spouse made for the family or the marriage
- Contributions each spouse made, including homemaking and child-rearing
- The economic circumstances each spouse will face after the divorce
- Any intentional waste or destruction of marital assets before or during the divorce process
One factor that often surprises people is career sacrifice. If you left your job to raise children or support your spouse’s career, a Florida court considers that when dividing assets. You do not walk away with less simply because your name is not on the accounts.
Marital Property vs. Separate Property in Florida
Not everything you own gets divided in a Florida divorce. Courts only divide marital property, which is generally anything acquired during the marriage using marital income or joint effort. Separate property belongs to the individual spouse and stays out of the division process.
Separate property includes assets owned before the marriage, gifts given to one spouse, and inheritances received by one spouse during the marriage. However, separate property can become marital property if it gets mixed with joint finances or if the other spouse contributed to its growth or value over time.
For example, if you owned a rental property before marrying and your spouse spent years managing and improving it, a court may treat a portion of its appreciated value as marital property. Keeping personal and joint finances clearly separated matters more than many people realize.
Is Florida a Community Property State for Tax Purposes?
Florida is not a community property state for divorce purposes, but since 2021, married couples can voluntarily opt into community property treatment for specific tax advantages. They do this by creating a Florida Community Property Trust (CPT).
The Florida Community Property Trust Act took effect on July 1, 2021, making Florida the fifth state to allow this kind of elective community property structure. Alaska, South Dakota, Tennessee, and Kentucky had already passed similar legislation.
The key benefit is a tax rule known as the “double step-up in basis” under Internal Revenue Code § 1014(b)(6). Here is how it works in plain terms. When one spouse dies, any appreciated assets held in the CPT get their cost basis reset to the fair market value at the date of death. Importantly, this applies to the entire value of the asset, including the surviving spouse’s half, not just the deceased spouse’s share.
Without a CPT, a surviving spouse in Florida only gets the step-up in basis on the deceased spouse’s half of jointly held assets. The surviving spouse’s half keeps its original cost basis, which can create a significant capital gains tax bill when that property is eventually sold.
Consider this example. A couple buys a home for $200,000. Years later it is worth $1,000,000. If one spouse dies and the home is held in a CPT, the entire $1,000,000 value gets a new basis. The surviving spouse could sell it and owe zero capital gains tax on the gain. Without the CPT, only half of the gain gets that reset.
Who Should Consider a Florida Community Property Trust?
A CPT is not the right move for every couple. It works best for married couples who:
- Own highly appreciated assets such as real estate, investment portfolios, or shares in a closely held business
- Plan to sell those assets after one spouse dies
- Are in a stable marriage with no significant creditor concerns
- Want to reduce capital gains exposure as part of a broader estate plan
Couples moving to Florida from a community property state, such as California or Texas,s should also consider a CPT. It allows them to transfer existing community property into the trust and preserve its community property character under Florida law.
There are trade-offs to weigh carefully. Once assets are placed in a CPT, both spouses gain rights in that property. If the marriage later ends in divorce, assets inside the CPT are subject to division in ways that assets held outside the trust may not be. Creditor exposure can also increase depending on how the trust is structured.
The IRS has not yet issued a definitive ruling confirming that CPTs in common law states like Florida qualify for the full double step-up in basis. The Florida Bar’s Tax Section submitted a formal White Paper on this issue to federal tax authorities, and discussions with the IRS and Treasury Department were ongoing as of the 2025 Annual Meeting in Washington, D.C. Until formal guidance is issued, some uncertainty remains on the federal tax side.
What This Means If You Are Moving to Florida
If you move to Florida from a community property state, your existing community property does not automatically change character. Florida generally recognizes the community property nature of assets you bring with you, but how those assets are treated going forward depends on how you handle them after the move.
Commingling community property with new Florida assets can create legal disputes later. Working with an estate planning attorney when you relocate is a sound step, especially if you own significant property in your previous state.
For couples already in Florida, the CPT is the only legal path to securing community property tax treatment without relocating to one of the nine states where it applies by default.
FAQs
Is Florida an equitable distribution state or a community property state?
Florida is an equitable distribution state. Courts divide marital property based on fairness, not an automatic 50/50 split. The judge weighs multiple factors before deciding who gets what.
Can I get community property treatment in Florida without moving to another state?
Yes. You can create a Florida Community Property Trust under the 2021 Florida Community Property Trust Act. Assets placed in this trust are treated as community property for certain federal tax purposes.
Does living in a community property state before Florida affect my divorce?
It can. If you bring community property assets to Florida, the state generally respects their community property character. You should work with a Florida attorney to make sure those assets are documented and handled correctly.
What happens to community property brought from another state to Florida?
Florida generally recognizes out-of-state community property. You should consult an attorney to make sure those assets are handled correctly and not inadvertently converted to separate property through commingling.
Is the Florida Community Property Trust IRS-approved?
The IRS has not yet issued formal guidance confirming the full tax treatment of Florida CPTs. The double step-up in basis is the intended benefit, but its federal tax treatment remains under active discussion as of 2025. Consult a qualified tax attorney before creating one.
