Divorce Costs

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There are a number of costs involved in a divorce action. The total amount of expenses will vary depending on the nature of the divorce. For example, a simple divorce with no assets or children will have different costs than a case where there are minor children and assets to divide. With children, custody and child support may need to be addressed as well. When there are assets, equitable distribution should be raised. Other filings that may be necessary depending on your circumstances can include a request for special relief in terms of asking the court to take immediate action on an emergent situation or intervene on an interim basis. Each county will determine which pleadings require a filing fee as well as the amount. On average, it can be several hundred dollars just in filing fees.

In addition to filing fees, you should work with an experienced family law attorney to ensure your divorce and related issues are handled properly. Most attorneys will charge by the hour for the time they spend working on your case. To that end, this expense can also fluctuate quite a bit depending on the nature of your case and whether everything goes smoothly and all parties cooperate versus if it is particularly contentious and additional litigation is required. A retainer is the initial deposit you pay to your attorney to get started. Your attorney will then subtract their hourly charges from the retainer as the case moves forward. You can help manage the costs by being organized and providing requested information to your attorney in a timely manner.  By April M. Townsend

 

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Dividing Investment Accounts

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Investment accounts that are opened or funded during the marriage will be considered marital property and up for division in the context of a divorce. Investment accounts present an additional consideration when it comes to division due to fluctuating value based on the market. The balance in these accounts is subject to various gains and losses on a daily basis. It will be important to establish a clear date and time for valuation purposes. With other assets, the cut-off date for valuation is usually the date of separation. With investment accounts however, you must also account for gains and losses from date of separation through the date of distribution as they are also considered marital. This can result in a significant sum for an account with a large balance or if there is a lengthy period of time between separation and distribution. Failure to address the market experience can result in an unfair distribution.

It is good practice to work with an experienced family law attorney who is familiar with division of investment accounts to ensure you are getting an equitable distribution of these types of assets. It may be appropriate to divide the accounts based on shares instead of value. To the extent the account holds retirement assets, you will also need to be clear on any withdrawal penalties in addition to tax consequences. To the extent a Qualified Domestic Relations Order (QDRO) is necessary, your attorney can draft/review an Order with the appropriate language to effectuate the desired distribution. A QDRO is a document that identifies the plan to be divided and gives specific details as to how that division will take place and what rights the party receiving the funds, referred to as the alternate payee, will have going forward.

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Child Support 101

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The amount of child support to be awarded in a case is based on statewide guidelines established by the state’s Supreme Court. The starting point for applying the guidelines is to identify the monthly income of the parents as well as the number of children in need of support. The guidelines are intended to ensure that similarly situated parties are treated similarly. Once the amount of support per the guidelines is identified, the amount is allocated between the parties based on their respective income as well as the custody schedule. The amount of support reflected in the guidelines is based on the average expenditures of children for food, housing, transportation and other necessary miscellaneous items.

Additional expenses for the children can be addressed as part of a child support award, such as cost of health insurance, daycare, private school tuition or camp. The amount of support dictated by the guidelines is presumed to be correct. There is not much room for argument as far as what amount of support is appropriate. The guidelines make financial support of children a top priority and the expectation is that other expenses will be adjusted to ensure the child support obligation can be met. Either party can initiate a complaint for child support to get a court order on the amount owed. Wage garnishment is the preferred method of collection for child support and the court will seek to have any support due taken directly from the pay check of the party paying support. Set up a consult with one of our experienced attorneys to better understand your obligations in child support.

 

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Real Estate Ownership

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A deed is the document that reflects ownership in real property. A deed should be recorded with the appropriate county office that maintains records for all real property. You may need to change your deed for a variety of reasons. Any changes to a deed require that a new deed is created and recorded to replace the prior deed.  If a home was purchased prior to marriage in only one name, you may want to add your spouse’s name to the deed. If property was owned jointly during the marriage and only one party is retaining the property in a divorce, you will need a new deed recorded. Please note a deed is separate from a mortgage and additional steps may be needed to address financial liability for a property pursuant to a mortgage.

You may consider adding a child to your deed as part of your estate plan. You may also find yourself in a position where a new deed is needed during the probate of an estate to pass the property from the decedent to designated heir. Each county assesses a fee for recording a new deed. There may also be a realty transfer tax depending on the relationship between the grantor(s) and grantee(s) and the circumstances warranting the transfer. Transfers between spouses are exempt as are transfers to children. Transfers pursuant to a will are also exempt from a realty transfer tax however are subject to inheritance tax depending on the relationship of the decedent to the beneficiary or heir.

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Will My Divorce Affect My Green Card Status or Citizenship Opportunity?

Whether or not your divorce will affect your immigration status depends on the stage of the process you’re in. U.S. Citizen and Immigration Services (USCIS) vigilantly watches for possible fraudulent marriages, entered into solely to evade U.S. immigration laws. There are ways to demonstrate your marriage was entered into in good faith, but their effectiveness depends on your stage in the process.

Application for a visa or green card

If your application for a green card has not yet been reviewed or approved and you are applying on the basis of your marriage to an american citizen or permanent resident, your divorce or annulment will end the immigration process. No evidence of marriage in good faith will help at this early stage.

Conditional resident with 2-year green card

If you’ve been approved for a green card but you had not already been married for at least two years, you will receive a 2-year conditional residence. In two years you will be expected to submit Form I-751, asking USCIS to approve your permanent residence. This form is intended to be signed jointly by both spouses, but if you’ve gotten divorced or annulled, you’ll need to file a waiver of the joint filing process.

This, of course, will raise flags, and USCIS will scrutinize your case for evidence of a fraudulent marriage. You will need to provide ample and convincing evidence that you entered into marriage in good faith. It is still possible to get approved for permanent status at this point, but you may want to hire a lawyer expert in immigration and marriage law to help you present the best case.

Permanent resident status applying for citizenship

The N-400 Form is the application for naturalization. Normally a permanent resident must wait five years before applying for citizenship. A person with a green card who has been married to a U.S. citizen for at least three years can apply in three years, as long as the person remains married up to the time of naturalization. If the marriage ends before naturalization, the process stops, but the permanent resident is still able to apply within the five-year period.

Keep in mind that whenever anyone submits the N-400 Form, USCIS will scrutinize the person’s file. If you’ve gotten divorced in that time, fresh evidence should be submitted demonstrating that you married in good faith.

Evidence for marriage in good faith

It’s important to know what USCIS flags as signs of a fraudulent marriage in order to know what kinds of evidence will show yours was a true marriage.

Warning signs to USCIS of a fraudulent marriage include: wide disparity of age; individuals not cohabitating; marriage upon warning of removal; friend of the family; american spouse previously helping people apply for residence; major differences in ethnic or cultural backgrounds; inconsistent answers in separate interviews.

Knowing what USCIS looks for, you can show that you and your spouse engaged in the kinds of behaviors that spouses normally engage in: documents with both names on them (mortgage or rent, joint bank accounts); pictures from your wedding, family get-togethers, parties, and vacations; cards or letters from friends or family addressed to both of you; documents or bills in your name showing your address matching your spouse’s address; birth certificates for your joint children; affidavits from reliable people in support of your marriage. In this case, a statement from a marriage counselor indicating you tried to work out your problems is particularly strong.

If you’ve been divorced and you’re still working toward american citizenship, contact an attorney knowledgeable in immigration and marriage law to help you present the best case to keep your process moving forward.

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Can My Former Lawyer Represent My Spouse in Our Divorce?

While it is common and even preferable for a divorcing couple to utilize the same attorney in mediation, there are clear guidelines that generally prevent one spouse from hiring the other spouse’s former attorney in a trial divorce case.

The american Bar Association (ABA) Rules of Professional Conduct (RPC) rule 1.7 states: 

(a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if:

(1) the representation of one client will be directly adverse to another client; or

(2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer. (RPC rule 1.7: Conflict of Interest: Current Clients) 

Rule 1.9 of the same code states the following:

(a) A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing.

(b) A lawyer shall not knowingly represent a person in the same or a substantially related matter in which a firm with which the lawyer formerly was associated had previously represented a client

(1) whose interests are materially adverse to that person; and

(2) about whom the lawyer had acquired information protected by Rules 1.6 and 1.9(c) that is material to the matter; unless the former client gives informed consent, confirmed in writing.

(c) A lawyer who has formerly represented a client in a matter or whose present or former firm has formerly represented a client in a matter shall not thereafter:

(1) use information relating to the representation to the disadvantage of the former client except as these Rules would permit or require with respect to a client, or when the information has become generally known; or

(2) reveal information relating to the representation except as these Rules would permit or require with respect to a client. (RPC rule 1.9: Duties to Former Clients)

Therefore, the RPC code of the ABA clearly lays out that a lawyer cannot represent your spouse in your divorce case, not only if he or she has represented you, but also if the lawyer’s current or previous firm has represented you in this case.

Further, a lawyer who has represented you or whose firm has represented you in the past in any way cannot represent your spouse in other matters, without your written consent, and may not use any information collected during your representation to your detriment.

Changing divorce lawyers is not uncommon. Often, in a time of great stress, a person chooses a divorce lawyer hastily or at the recommendation of another person without doing thorough review. Sometimes it’s just a matter of personalities not clicking. Whatever your reason for changing your lawyer, be sure to retain a new lawyer first, so that you are not without representation for a moment. Once you’ve signed the agreement with your new lawyer, inform the other in writing and request your file be sent to the new attorney by a given date.

If you have any questions, contact us here at Ulmer Legal and Mediation Services to see how we can help you.

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Dividing the Family Cars in a Divorce

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When couples begin the divorce process, all assets and liabilities need to be listed and valued in order to determine division between the spouses. Negotiation often involves one spouse being given certain assets in exchange for other assets of the same value – and greater need or emotional attachment are values along with cost that can be weighed in the negotiation process.

If a couple can settle out of court with the help of qualified divorce lawyers to ensure a fair and satisfying distribution between both parties, the couple maintains control over their own assets and their own preferences. However, if they cannot come to an agreement, the divorce must go to court and the division of assets is put into the hands of a judge.

Pennsylvania is an Equitable Distribution state, which means the judge does not necessarily divide property 50/50 but rather in a manner that seems fair. Therefore, when determining who gets what, including the vehicles, the judge will consider many factors.

Was the car owned and paid for completely before marriage by one spouse? It is almost assured that the owner will be awarded the car. Was the car purchased after marriage, but it’s in one spouse’s name and that spouse’s money was used to pay for the car or the loans? Chances are very likely that this spouse will receive the car, although other factors could come into play.

Who has greater need for the car? If there is only one car, who needs it to commute to work because there are no public transportation options available? If there are multiple cars, who needs the van to take the kids to school, or who needs the newer car for a long and difficult commute? All these individual factors weigh into the judge’s decision.

The car’s value is also taken into consideration. If the family has two vehicles and one is worth significantly more than the other, the judge will likely award the cars based on need, circumstances, and payment history, but may also award additional compensation to the spouse receiving the car with less value in order to balance the asset division.

If a car is awarded to you in a divorce settlement, be sure to change the title and owner immediately to yourself. If a balance is owed on a loan, the loan should be restructured or refinanced to have only your name on it.

Your divorce attorney will walk you through the many intricacies and details involved in the divorce process and starting over. Reach out to us here at Ulmer Law to see how we can help you.

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Dividing home equity in a Pennsylvania divorce as real estate rebounds

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Improvements in the housing market mean that more couples again have equity in their homes. Division of marital property is one of the challenges in any divorce. When a marital home will be too expensive or more than one spouse can maintain, selling the home is again becoming an option. The sale of a home can result in a sizable profit, but consider the tax consequences and timing of the sale.

In Pennsylvania, the court equitably divides property in a divorce action by reviewing certain factors including some of the following:

The duration of the marriage;
Age, health and sources of income available to each of the spouses;
Contributions or dissipation of assets made by each party; and
Whether there are any minor children.
Equitable division does not always mean an equal award of the equity in the home. If one of the spouses owned the home prior to the marriage or sold a previous home prior to the marriage to secure a down payment, part of the equity may be considered non marital. This means it would belong to the spouse that brought the asset to the marriage and would not be divided.

While a divorce is pending, the court can award one or both of the spouses the right to continue to live in the martial home. When it is not practical for either spouse to stay in the home, the spouse who lives in the home may need to list the home for sale.

TAX CONSEQUENCES OF THE SALE OF A PRINCIPAL RESIDENCE
When certain rules are met, the seller of a principal home can avoid paying federal income tax on up to $250,000 ($500,000 for a married joint-filing couple) of the gain in value. When a couple has owned a home for many years in an area that has appreciated this becomes very important.

The Internal Revenue Service test requires that the seller owned and used the property as a principal residence for two years during the five-year period preceding the sale. To pass the joint-filer test, both spouses must pass the use test and one must pass the ownership test.

This is very straightforward when the sale occurs before a finalized divorce decree or within the same year. The couple could file jointly for one more year and claim the $500,000 exclusion.

When a sale of the principal residence happens after the divorce and the court awards the home to one of the spouses, then that spouse may only be able to claim the $250,000 and will owe taxes on any additional gain from the sale.

When considering divorce, contact an experienced family law attorney. Advice at an early stage in the process often means avoiding costly mistakes down the road.

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What If I Don’t Have the Documents I Need for Divorce?

When you meet with your lawyer or mediator to begin the divorce proceedings, you need to have many documents with you, both personal and financial. Not having access to these documents could delay proceedings or damage your case and limit your settlement options. A partial list of documentation includes:

  • Personal data: birth certificate; marriage license; life insurance and healthcare insurance; employment information and income; will and living will or advanced directive; power of attorney
  • Financial data: complete list of assets (bank accounts, investments, pensions, and value of homes, cars, and personal property like jewelry, furniture, etc); expenses (all bills, loans, mortgage, etc.); income tax returns for the past several years; list of assets or expenses obtained or incurred singly before marriage or given to individual as a gift after marriage (both spouses)
  • Childcare data: costs of childcare, evidence of each parent’s involvement in the child’s upbringing (involvement in school, sports, etc.) for custody settlement

This is a lot of information, and you may not have access to the records for a variety of reasons. But there are ways of getting what you need, although in some cases you may need help from your lawyer.

If vital personal records were lost or destroyed: For items such as birth certificates, green cards, income tax statements, and more, you can contact the federal government for duplicates. You will need to supply your social security number and you may need to show some other identification. In some cases, you may need to apply in person, while in others, like tax statements, you can make your request online.

If your spouse has the records of bills or assets and refuses to share: You may need to have your lawyer request a subpoena be issued to give you access to all the critical financial data you need. And as soon as possible upon deciding to divorce, sever all joint accounts, whether bank accounts, credit cards, or other things like family email, iTunes, social media, and others. See Shared Accounts and Your Divorce for more details.

If your credit card is in your spouse’s name but you are a secondary name, you can just call and have your name removed. If it’s a joint account, however, it may not be that simple. If both names are on any account, the company will hold you jointly responsible for the balance, and both of your credit scores will be affected by unpaid balances.

To prevent further use of joint credit cards or the withdrawal of money from joint bank accounts, your lawyer may have to request a temporary restraining order to freeze these accounts. Please discuss this with your attorney as soon as possible.

If you need evidence of child support and involvement: Contact your child’s school or daycare for copies of payments sent or parent-teacher conferences where the teacher would have recorded which parents attended. Photos and social media posts may also demonstrate the level of involvement in a child’s life by either parent.

Remember, it’s critical to have your documents as complete as possible in order to put you in a position of strength for your settlement or court appearance. You want to get the best financial and child custody arrangements to help you and your children be as comfortable as possible and be able to move on in a new life. Contact us here at Ulmer Law in Doylestown for our legal and mediation services. Let us help you.

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Issues When Dividing Vacation Properties in Divorce

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In Pennsylvania, if a divorcing couple cannot come to an agreement outside of court, all marital assets will be divided according to equitable distribution, which means, effectively, whatever the court thinks is appropriate after considering a number of factors. As long as both parties are reasonable, we encourage divorcing couples to avoid court so they can retain control of the division of their marital assets.

This is true for all assets, including vacation property. Even if the property was given to one spouse exclusively or purchased exclusively with one spouse’s income, and no family money was ever used to pay for its mortgage or upkeep, such property may be considered marital and will factor into the division of assets. Whether your divorce goes to court or not, you will probably have to decide what is to become of your vacation property.

Appraise the asset

Before you decide what to do with the property, you need to get an accurate appraisal of its market value. Also important is a complete listing of all costs associated with owning and maintaining the property: mortgage, interest, taxes, utilities, repairs, landscaping, and more.

With this clear, factual foundation, you can begin to evaluate the course of action that will best benefit the two of you and any children you have.

Decide your best option

Selling the property might be the easiest choice, allowing you to divide the funds received between you. It can be emotionally difficult to let go of a place where you may have created fond memories, but consider your need for liquid assets and the simplification of the process, which are important advantages to this option.

If you and your spouse are on reasonably good terms, you could choose to keep the property and divide its use. This is advantageous if children are involved, since they would still have the familiar vacation home to go to, providing them with much-needed security and continuity. But be sure to create a written document, signed by both of you, that will clearly delineate the times and seasons each will be using the home, the expenses each of you will be responsible for paying, and the dates those payments must be made. Your lawyer will be able to create a comprehensive document that will ensure that you both get good use out of the house without increasing tension.

You may also decide that one partner gets the family home and the other gets the vacation home. The complication here is in the valuation of each residence. If one house is worth significantly less, the spouse with the less expensive house can negotiate additional assets or benefits in order to balance the value of the two properties. However, if that house also has much lower expenses, the spouse with the more expensive home should insist that this benefit be factored into the negotiations.

 What about timeshares?

Treat a timeshare in the same manner you would treat a vacation home or vacation yacht or any other additional asset. First, get it appraised so you know what it is worth. Then, negotiate.

Get help

A seasoned divorce attorney can help you through all the nuanced legal and financial issues involved in divorce because we have helped many people through the process. Contact us here at Ulmer Law to see how we can help you, too.

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