Interest in Marital Property

A creditor may run into trouble in seeking to pursue their interest through real property of a married couple. Lappas v. Brown, 335 Pa. Super. 108 (Pa. Super. 1984), established that property subject to an order of court is in custodia legis, or under wardship of the court, pending compliance with the order. In Lappas, the underlying dispute involved a defense attorney who confessed judgment to get payment for legal services rendered. Meanwhile, the Commonwealth had seized all available funds as derivative contraband. Ultimately, the attorney was unable to collect his fee due to the existing order of court regarding the forfeiture. City of Easton v. Marra, 862 A.2d 170 (2004), expanded the principle of in custodia legis to actions for divorce and equitable distribution. In City of Easton, a divorce proceeding had been pending since 1988 when the City sought collection of unpaid taxes by forcing a tax sale of the real property the parties owned. A motion to stay the sheriff’s sale was granted since the property remained in custodia legis pending final resolution and equitable distribution per the parties’ divorce action.

Another example of the principle in the context of a divorce action was illustrated in Fidelity Bank v. Carroll, 416 Pa. Super. 9 (Pa. Super. 1992). Husband had a judgment entered solely against him for unsecured loans which went into default. The bank sought to put a lien on the marital residence however the Court held the bank’s lien could not attach to the marital home since the marital home was subject to equitable distribution in the pending divorce action. “Accordingly, the Bank could acquire no greater interest in the marital home than that of [Husband]. Here, it turns out that [Husband] has no interest in the marital home. Therefore, the Bank also has no interest in the home.” Id. at 14. In summary, a creditor cannot touch the interest of a non-debtor spouse, e.g. their share of a marital home.

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Divorce Based on One-Year Separation?

Earlier this year a bill was introduced to the Pennsylvania General Assembly which would affect the Divorce Code. House Bill 380 proposes amending Section 3301(d) of the Divorce Code to allow divorce on the basis of separation for a one year period as opposed to the current law which requires a two year separation period. Representative Tara Toohil proposed the bill and cites several reasons for the change. First, reducing the duration for divorce will reduce the turmoil for minor children. There is consensus in the psychological field that continued conflict of the parents is the primary influence on the well-being, or lack thereof, of the children. Second, longer divorces allow for additional litigation and prolonged emotional strain. The third reason offered in support of the bill is the lack of any economic benefit by continuing with a two year separation period. For example, any alimony award will generally be reduced by the period of support received while the divorce was pending such that there is no benefit to a longer separation period.

Finally, Representative Toohil points out that all surrounding jurisdictions already allow for divorce on a shorter time frame. Specifically, New York, Ohio, and Maryland require only one year of separation. New Jersey and Delaware only require six (6) months of separation. The Pennsylvania Bar Association recently submitted a brief to the House Judiciary Committee in support of the bill. The brief also discusses that there has actually been a decrease in divorce since many neighboring states have allowed divorce after only a minimum period of separation. The final assertion is that there is absolutely no benefit to requiring a longer separation period. Instead, a shorter separation period will allow the parties to move on with their lives quicker with less emotional and financial strain as well as promote the best interests of minor children in decreasing the period of uncertainty.

Click here to read the stance of the PA Bar Association.

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Determining Marital Status

If there is a question as to the validity of a marriage, Section 3306 of the Divorce Code discusses how either party may file for declaratory judgment with the court at any time. The court will declare the marriage valid or invalid based on the proof presented. Under 23 Pa C.S. 3304, void marriages include those where (1) one of the spouses is still in a former marriage, (2) the parties are too closely related, (3) either of the parties was incapable of consenting to the marriage, usually due to mental disorder, or (4) either of the parties was under 18 if claiming a common law marriage. A void marriage is one that is invalid because it violates some public policy.

Under 23 Pa C.S. 3305 grounds for voidable marriage include: (1) where either party is under 16 without court approval, (2) where either party is 16 or 17 without court approval or parental consent, (3) where either party was under the influence of alcohol or drugs at the time of the ceremony impacting their ability to consent, (4) either of the parties is incurably impotent, or (5) there was fraud, duress, coercion or force to secure the marriage. A voidable marriage is presumptively valid unless a party challenges it. There is a sixty day time limit to pursue an annulment from the ceremony date for several of the voidable grounds. Additionally, regarding void and voidable marriages, the right to annulment is lost if there is subsequent confirmation of the marriage after becoming aware of the potential grounds for annulment. Where an annulment is to be granted, equitable distribution and potential support claims may proceed just as in a divorce action.

Click here to read about grounds for divorce.

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Same Sex Divorce

In a decision rendered May 20, 2014, the Honorable John E. Jones, III, sitting for the US District Court in the Middle District on the case of Whitewood v. Michael Wolf, ruled that two of Pennsylvania’s laws regarding marriage were unconstitutional on the basis that they violated the Due Process and Equal Protection clauses of the Fourteenth amendment. Now that Pennsylvania recognizes same-sex marriages, same-sex partners looking to dissolve their marriage are subject to the same process as far as divorce, equitable distribution and support. Most divorces proceed on the basis of no-fault meaning the parties need only allege an “irretrievable breakdown of the marriage” and either consent to the divorce after a 90-day period or establish 2-year separation. A no-fault divorce can also be obtained if one of the spouses is institutionalized for a period of 18 months provided they will likely still be institutionalized 18 months following the commencement of the divorce.

Equitable distribution is the term used in Pennsylvania referring to division of marital property at the time of divorce. Marital property will consist of nearly everything acquired in either party’s name from the date of marriage through to the date of separation. Equitable distribution does not necessarily mean a 50/50 split of all marital property. Instead, the statute on equitable distribution sets out 13 factors to be considered. Section 4321 of the Domestic Relations laws provides that married persons are liable for the support of each other according to their respective abilities to provide support as provided by law. Similar to child support, spousal support will be calculated based on a statewide guideline. Without children, spousal support is 40% of the difference of the net incomes of the parties. If there is also a child support order, spousal support will only be 30% of the difference of the net incomes.

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Discovery During Divorce

Discovery is the part of the divorce process when information is gathered regarding marital assets and debts and separate assets. One of the main tools used to gather this information are Interrogatories and Production Requests. Many a client has gasped when they have receive 100 very detailed questions to answer or Production Requests that are pages long asking for a large quantity of documents. When you are served with Interrogatories or Productions Requests, it is best to remain calm. This is a standard part of the divorce process. Many of the questions may not apply to your case as attorneys try to cover every possible question and uncover every possible asset. When answering these questions, it is best to put that you do not have any if it is an asset such as a business that you do not have. If the question asks for records that are accounts in joint names, you also do not have to produce them. You can merely indicate that the other side has equal access to this information. Before you panic, talk to your attorney. He or she can explain to you what you essentially need. In most cases, that will be any and all records that are only in your name or your name with a third party, not your spouse.

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Two documents to get during your Divorce

When you are getting a divorce, it is important to get an overall financial sense of what you own and what you can expect to receive. Two documents you may want to obtain are your credit report and your statement from Social Security. Your credit report will identify all credit cards or loans that are open in your own name or jointly with your spouse. You want to make sure all of these debts are considered when you divorce. You can obtain a free credit report each year from each of the three carriers. I recommend that you obtain one from each every four months so you can periodically check on your credit and make sure there are no missed payments on the joint accounts and no new surprise accounts. It is simple and fast to obtain this report, simply go to annualcreditreport.com and pick one of the carriers to obtain the report. Then in four months, pick the next carrier, etc. This way, you will have an updated statement every four months for free. You should also have a copy of your Social Security Statement. This is useful in that it provides you with a history of your earnings paid through payroll as well as provide you with the estimate benefit you will receive if you retire, become disabled or if you have a child and something happens to the parent. You can register and download this information at www.ssa.gov and should print this information. Having an earnings history is useful when you go to court on support to show what your history of earnings is.

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Distribution of Debt during a Divorce

During the divorce process, information is gathered not only on assets, but also on debt. Marital debt is debt that is accumulated during the divorce, regardless of the name of on the account. This means that if you have a charge happy spouse, you may be liable to share in the debt created by their spending spree. The balances of the credit cards and debts as of the date of the separation of the divorce is the date to look at for purposes of debt distribution. Since divorce often takes awhile, you will want to gather this information as soon as you separate. You will also want to keep track and gather proof of every payment you make on this debt since you separated so that you can seek credit for this payment when you get divorced. If your overall marital estate is primarily distribution of debt, you may want to consult with a bankruptcy attorney. Any debt that is discharged in bankruptcy does not get considered in the divorce if it is discharged prior to the divorce going through since it no longer exists. It is always wise to consult a bankruptcy attorney when there are high debts in divorce and few assets to determine not only whether to file bankruptcy or if you qualify but when to file it.

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Finality in Divorce

Sections 3331-3333 of the Divorce Code discuss the potential to review a divorce after a decree has been issued. The general policy is in favor of finality to avoid endless litigation, however certain circumstances will warrant reconsideration. First, parties should act as timely as possible. Section 3331 limits attacks on decrees. An appeal is the only option where one of the parties has died. There is a two year limit to take action specifically where the party questioning the decree had knowledge of the circumstances supporting the attack and failed to timely take action. Section 3332 outlines when a decree may be opened or vacated. In general, there is a thirty day time limit to request review of an Order pursuant to 42 Pa. C.S. 5505.

Section 3332 also draws a distinction between intrinsic fraud and extrinsic fraud. Intrinsic fraud must be alleged within the thirty day time limit whereas extrinsic fraud has a time limit of five years. Intrinsic fraud refers to an issue that was adjudicated. Extrinsic fraud refers to a situation where a party was precluded from having their fair chance at adjudication altogether. Examples of extrinsic fraud include where a party was kept unaware of the proceedings or by promise of a false compromise. There is no extrinsic fraud where the party had ample opportunity to object earlier in the proceedings and simply failed to do so.

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Divorce after Two Year Separation

After two years of separation,  grounds for divorce can be achieved in PA without the consent of the other party. One of the two no-fault grounds for divorce is a two year separation. This separation does not have to mean physical separation. It is legal separation. Legal separation is no later than the date that a divorce complaint is filed. Parties can reside together in the same home while the divorce is pending. After two years, however, from the date the divorce was filed, one party can allege that it has been two years and seek grounds for divorce based on that fact. The other side must actively file a counter-affidavit denying the two year separation or denying there is an irretrievable breakdown of the marriage in order to stop the grounds for divorce from being entered. If a counter-affidavit gets filed, a hearing will be needed to determine if in fact the two year separation has occurred. Grounds for divorce is only the first step in getting a final divorce. In order to get a final divorce, if claims for equitable distribution or alimony have been raised, an agreement either needs to be put in writing or the parties need to go to a divorce hearing after they get grounds for divorce. This is often why there are cases that take at least three years before they are final, and some much longer.

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Benefits of a Law Firm Team

When you hire a law firm, it is a good idea to find out whether the attorney you hire is the only attorney who will be working with you or whether the firm takes a team approach. There are many benefits of the team approach. When you hire an attorney and you meet with your attorney in their office, it is often easy to forget that your attorney is not in their office everyday. You may expect that they will be readily available to you at a moment’s notice, despite the fact that they could very well have days that they are in court and not in the office. What happens when your attorney is in court and you have an emergency? What happens if your attorney is scheduled to be in court in another matter the same day that you have court? When a firm takes a team approach your options are expanded. Oftentimes there is another attorney at the firm who can assist you with any of your legal needs should your lead attorney be unavailable. In addition, in a firm that takes a team approach, if your attorney has a conflict, there is another attorney who could equally represent you if you do not want to or cannot move your hearing to another day. If, however, you like the idea of only one person handling everything, it is best to discuss this with your attorney from the outset and also to understand that this could result in slower turnaround if your attorney is out of the office or may result in hearings that have to be rescheduled if there are multiple court proceedings in one day. As with any relationship, communication is key and it is important to discuss all of these things when you hire your attorney.

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