Equitable Distribution and Worker’s Compensation

One asset in equitable distribution or support that parties should consider when getting divorced is worker’s compensation awards. Depending on what state the worker lives, there may be a component not only for lost wages but also an award comparable to a personal injury award. In these instances, the lost wages should be calculated into any support award and the again, you will need to decide whether you want to lump sum the award portion as either income for purposes of support or as an asset for purposes of equitable distribution. In the event that it is considered as income, you cannot double dip and claim it as an asset. If, however, the award is for an injury that occurred outside of the marital period, either before or after separation, you will need to include it as income as you cannot include it as an asset. Your support order should be very detailed and specific and identify exactly what portion of any worker’s compensation is included in the calculation of the income. Whether to have the worker’s comp treated as an asset or income really depends on how the court will treat the asset. In some instances, the court may award the majority of that asset to the injured party and it may be better to then include it income if you are also eligible to receive support. Speaking with your attorney about the expected amounts would be wise to do before you make that decision so that you can decide whether it is better as support or as an asset.

For more information see:/Family-Law-Divorce/Division-of-Marital-Property/

 

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Tips when first separating from your spouse

If you are separating from your spouse, there are various things that you should do or not do during this time:

1. You should freeze any joint credit card debts so that your spouse does not continue to increase debt in your name.

2. You should freeze joint bank accounts if you are not going to be living together. If you need some of the funds to live, it is a good idea not to take more than half and to leave half for your spouse to prevent litigation. Your spouse can and sometimes will wipe out the entire account forcing you into litigation.

3. You should figure out a budget for yourself best on how much you earn and how much you will expect to receive or pay in support so you can figure out how much you can afford when looking for a place to live. An attorney can help you figure out this amount.

4. You should collect your statements from all your accounts both debt and assets so you can establish what the values were at separation.

5. You should not drop your spouse or children from health insurance as you may be required to continue coverage during the divorce.

6. You should not change the beneficiaries on any insurance policies until after your divorce and only if there is no court order to maintain coverage.

7. You should pull your credit report so you do not have any surprises on what may or may not exist during the divorce.

8. You should gather other important documents, including your marriage certificate, your deed, car titles.

9. If you are struggling emotionally with the separation/divorce, you should engage a good therapist to help you through the process.

10. If you are expecting to receive support you should file once you know you are going to move.

11. If you expect to have custody, make sure you move locally or first obtain permission from the Court.

12. Take the personal property items that are most important to you as oftentimes it is very difficult or cost prohibitive to fight over personal property later.

13. If possible, talk to your spouse and try to come to terms on things as much as possible and consider mediation or collaborative law as an option.

14. Hire an attorney who specializes in divorce if you decide that you need legal assistance to help you with custody or support or if you decide that divorce is your next step.  You should not have expectations based on what happened with a friend or relative’s similar situation.

15. Remember to be civil with your spouse. It will be easier and less expensive if you can handle matters with a respectful and practical approach.

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Who Pays What During a Divorce

Child Support: The party who does not have the majority of time pays child support or if the parties have equal custody time usually based on overnights, the party who earns more pays child support.

Spousal Support/Alimony: Paid by the party who earns more income

Mortgage/household bills: Paid by the party who remains in the home

Car Payment: Paid by the party who uses the car

Car Insurance: Paid by the party who uses the car

Medical Insurance: Paid by the party who carries the insurance and allocated during child support and spousal support in proportion to incomes

Home Equity Loan: Depends on what the loan was used for. May require a special relief action.

Credit Card Bills: Responsibility of both parties for what accumulated during the marriage. Typically paid by party whose name it in to protect credit but any payments made after separation should be document for shared reimbursement.

Repairs to House: Routine repairs are paid by party using home. Repairs that increase value f home benefit both parties and any payments made post separation should be documented to seek a credit.

Taxes: Parties may choose to file jointly or separately. If file jointly, usually a joint expense.

College Tuition: Neither parent is responsible for college tuition for children and any payments are voluntary and not reimburseable.

Legal Fees: Each party is responsible to pay their own legal fees

Filing Fees: The party who files

Expert Witness Fees: The party who retains the expert

Business Valuation Costs: The party who seeks the valuation

Appraisal: The party who obtains the appraisal

Pension Valuation: The party who obtains the valuation 

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Another Approach to Divorce – Collaborative Law

When getting divorced, there are several different approaches that a couple can choose. Some people opt for mediation to try to resolve their disputes and save them money. Others, take the traditional approach and opt for attorneys to handle everything. There is another approach that is less known but can be quite effective – collaborative law. Collaborative law, unlike mediation, involves two attorneys similar to the traditional approach. What makes collaborative law different, however, is that both spouses agree from day one that they want to settle everything out of court. They formalize this agreement in writing with their attorneys wherein they agree that they will make any and all efforts to resolve their issues involving divorce, custody, and support out of court. While they always reserve the option to go to court if they cannot reach an agreement, there is a hefty price to pay – loss of representation by both side’s attorneys. Even if one party is still willing to work it out of court, both spouse’s and their attorneys agree that if one of the parties decides to litigate, both attorneys will withdraw from the case and both parties will have to start over with new attorneys.

This option is a great option for parties who are both committed to settling their differences out of court but want the benefit of having legal advice that mediation does not provide. When hiring an attorney, you should ask if they are willing to handle collaborative law cases if this is an option that appeals to both you and your spouse.

 

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Dividing a Pension in Divorce and the Survivor Annuity

Oftentimes when parties get divorce, one of the biggest assets that they have accumulated is the pension of one or both of the spouses. In a Pennsylvania divorce, the pension portion that accumulates during the marriage is what is considered marital. There may also be a non-marital portion for the years of service prior to the marriage or the years of service after the marriage. When getting divorced, there are two methods of getting each spouse their share of that pension. One method is to do a percentage distribution of the marital years. When this method is use, the spouse receives a percentage multiplied by the number of years married that the pension accumulated divided by the total number of years that the pension accumulated. This is usually distributed by a separate document called a Qualified Domestic Relations Order which is often paid to and drafted by a company or firms that handles QDROs. The other method of distribution, and the preferred method by the Court (according to case law) is an offset. Under this method, the marital portion of the pension is assigned a dollar value based on a report prepared by a company who does pension valuations. This dollar value of the pension can then be swapped with other marital assets as an offset.

One often overlooked part of a pension is the survivor annuity. If a party has a pension, then the party who has the pension is given the option at retirement to select from several different options upon their death. This could include no survivor, a 75% survivor, 50% survivor, etc. This survivor benefit election is important in that if no survivor is elected, the one spouse will receive nothing upon death of the party who holds the pension. If a survivor benefit is elected, it reduces the monthly payment of both spouses when they receive the pension. Since only the spouse who will continue to receive the pension upon death of the pension holder will benefit, the surviving spouse has an asset known as the survivor benefit annuity which must be valued separate and apart from the principal of the pension. It is something that should be addressed at the time of divorce as once the pension is in pay status this election cannot be changed.

For additional information see: /Family-Law-Divorce/High-Income-Net-Worth-Divorce/Pensions-in-a-Divorce/

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Tips for Keeping Divorce Costs Down

1. Understand that family lawyers charge based on their time. This includes time reading emails, talking to you and anything else related to your case. Sending daily emails or calling constantly to talk about your case is a surefire way to escalate your bill. Instead, keep a journal of your thoughts and schedule one block of time to go over all your issues with your attorney and be sure to engage a private therapist or good friend if most of your conversation is related to emotional struggles instead of legal issues.

2. Weigh the cost of what you hope to gain against what you will have to spend to get that amount. Consider that in support matters, oftentimes, it may not make sense to hire a lawyer to fight over $ 100 difference between what you hope to get and what you spouse would agree to pay. You need to balance the cost of legal fees against the amount of money you hope to gain order to assess whether it is worth the litigation in the financial areas. This applies to support as well as the divorce issues.

3. Gather your own financial records and get organized. You can save money if you are organized and gather your own records that are needed for your divorce. Make sure you have current statements and statements from separation on all your accounts, including retirement accounts, contributions during separation, mortgage statements, credit card statements, etc. and present them to your lawyer in an orderly fashion and you will not only save the money having to have your lawyer gather this for you, but you will be in a better position to possibly settle your case out of court.

4. Consider Mediation. Even if you have an attorney, you are still able to mediate your conflicts if both parties agree. Even if you are unable to come to a global settlement, you can usually narrow down your issues in dispute which will in the long run save both time and money.

5. Understand that your emotional pain has no correlation to what you will receive. Unlike a personal injury claim where you are compensated for pain and suffering, the divorce laws are not structured to compensate you for you pain or hurt. Understanding the factors involved in dividing your assets are based on economic factors rather than emotional factors may help you set realistic expectations and help keep the costs down.

For more information, see: /Family-Law-Divorce/Bucks-County-Divorce/

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Changing the Locks during a divorce

Sometimes the first action in a separation or divorce is when a spouse moves out. When a spouse moves out of the house, oftentimes the spouse who remains changes the locks. This is something that you can do, however, it is not always assurance that they will not get back into the home unless their exit was the result of a Protection from Abuse. Until you have an exclusive possession order signed by a Judge during your divorce, a spouse could legally gain entry to the home by breaking a window or any other method. In order to get an exclusive possession order, you would have to file a Petition for Special Relief and ask that Court to enter an order while the divorce is pending to award you the home. If your spouse left and has another residence that he/she has established, it is very probable that the court will award you the right to live in the home and your spouse will not be allowed in at that point without your consent. Once you have that Order from the Court, you can be assured that a violation of that Order will result in Contempt of Court. If you are the spouse who left, until that Order is entered by the Court, you can usually move back into the house if you change your mind. Getting an Order in place is something to consider to eliminate unexpected surprises.

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My spouse left me, why do I now have to pay the mortgage?

If you are getting a divorce in Pennsylvania, oftentimes the court will require the occupant of the marital home to pay the mortgage. It does not matter whose name is on the mortgage. The theory behind requiring the occupant to pay the mortgage is that only that person is receiving a benefit for use of the home. Consider it fair rental value. The court will normally impose a support obligation on the spouse to pay you if they earn more and you have been married for at least a few years. If you have children with your spouse, you can seek a mortgage contribution as part of child support if they children remain the home with you. The mortgage contribution, however, is never going to be equal to the mortgage, nor is it even half of the mortgage. In some cases, you will not even get a mortgage contribution if your income and the child support amount do not mathematically warrant it. It is also in the discretion of the Judge whether to even award it. If you cannot afford to pay the mortgage between the income you have and the support you receive from your spouse, it may be time to consider selling the home. If you fail to pay the mortgage while living in the house during a divorce, the Court can intervene and order it sold. It is a good idea if you are separating to consult an attorney who can assist you by figuring out approximately how much you can expect to receive. This not only helps in deciding if you can afford to stay in your home during a divorce but will also help you decide how much you can afford to live elsewhere if you have to move. The attorney can also provide you with the documented expectation of support in order to help you secure a rental if your income does not support it alone.

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NJ Divorce on the Papers

Certain counties in New Jersey will now allow a divorce to go through without requiring appearance in court. This option is available if there are no issues raised other than the divorce. For example, there are no custody, support, or equitable distribution issues. Alternatively, if the parties reach an agreement on all outstanding issues, the agreement can be incorporated with the request for the divorce and the appearance requirement can still be waived. A final judgment of divorce will need to be prepared. The judgment should include whether an agreement is being included. The judgment should also cover the minimum requirements for divorce such as appropriate jurisdiction based on residency. Further, if wife intends to retake her maiden name, that should be included in the proposed final judgment.

In addition to preparing the judgment of divorce, both parties should submit supporting certifications. The certifications should go into further detail about the facts establishing the divorce action. The certification should set forth the marriage date of the parties and the period of residency. The cause of action should be stated (e.g. irreconcilable differences, separation, etc.). The certification should state if there are any children between the parties and if so, their names and date of birth. Again, if an agreement has been reached regarding ancillary issues, the agreement should also be referenced in the certification. Finally, the parties should indicate they are waiving their right to trial in favor of having the divorce granted without personal appearance.

Click here to read more on divorce in New Jersey.

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Social Security Benefits when Divorced

When you get divorced in PA, social security is not considered as an asset in divorce. It may be considered as income for purposes of alimony but not as an asset.  If you were a spouse who did not work and did not contribute to Social Security or if you worked part-time and your benefit is not very much, you should inquire as to whether you are eligible for spousal benefits.  If your ex-spouse worked and contributed to Social Security, you may be eligible for Social Security.  In order to be eligible, you must be unmarried at the time you apply for benefits. Even if you are divorced in between marriages from someone else, you may still be eligible to collect on the first spouse if you meet the requirements.  You must be at least 62 years.  You must have been married to the spouse for at least ten years to collect.  If your spouse is not yet collecting, you can still collect as long as you have been divorced for at least two years.  If you wait until full retirement, you will receive half of what your ex-spouse’s full retirement benefit is.  Your collection of the half of their benefit does not reduce their full benefit.  They will still be eligible for their full retirement benefit.  Social security no longer sends statements out in the mail of your earning history but they are easily accessible online at www.ssa.gov and you should set up an account for yourself to view online.  To learn more about your rights if you are divorced visit: 

http://www.socialsecurity.gov/retire2/divspouse.htm.

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