Same-Sex Marriage & Divorce

Last month the U.S. Supreme Court found that the Defense of Marriage Act (DOMA) was unconstitutional as it violates the Fifth amendment in failing to provide due process for all. DOMA was initially enacted in 1996 and provided that the federal government could refuse to recognize same-sex marriages granted under state laws. This resulted in same-sex couples being denied federal marriage benefits available to heterosexual couples including, but not limited to, insurance benefits for government employees, social security survivors’ benefits, evaluating financial aid eligibility and filing joint tax returns.

While the federal government will no longer discriminate against same-sex couples who have been married in a state recognizing same-sex marriage, there may still be unique issues as it relates to divorce. For one, only states granting same-sex marriages will be able to do the divorces. With divorce there is often a residency requirement of six months or more meaning one of the parties may need to relocate and establish residency in a state that can preside over the divorce action before it can proceed. Further, if same-sex couples have children and subsequently separate, there are issues they can run into as far as custody. For example, PA custody laws state exactly which persons are eligible to even apply for custody rights and limit that group to the parents, grandparents, or third persons standing in loco parentis. Accordingly, if the non-biological parent hasn’t already adopted any children thereby making them a parent, they could run into issues establishing standing for custody. To date, PA does not recognize same-sex marriages. The ACLU did file a lawsuit to allow same-sex marriage in PA following the decision on DOMA.

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Tax Consequences

Many clients going through family law matters will have questions regarding how they can/should file their taxes as well as what tax consequences may arise in their situation and the answers vary depending on if it’s a divorce, custody, or support matter. To start with divorce, while married parties can choose between married filing jointly and married filing separately. Generally speaking, it is more beneficial to file jointly. If the divorce finalizes by December 31st, parties can then opt to file single or head of household for that year. The head of household status may also be available while still considered married if you’ve been separated for at least six months, have paid at least half the cost of maintaining your own residence, and can rightfully claim any dependent children. In dividing property as part of a divorce, it is possible to rollover some assets (namely retirement accounts) to avoid immediate tax penalty. Also, certain transfers in the context of a divorce matter are exempt from being taxed such as transfer of real property.

Speaking of claiming dependent children, this leads right into considerations in custody. The primary custodial parent has the right to claim minor children on their tax return. To be the primary custodial parent you must have a greater number of overnights. It is however possible for the non-custodial parent to be able to claim the exemption if the custodial parent completes IRS form 8332 waiving their right to the exemption. The number of deductions claimed or filing status can impact a support award as it can alter the net monthly income of the parties which is used to calculate support awards. Alimony is deductible from the party paying alimony and taxed as income to the party receiving it. It is always a good idea to confer with a tax expert for the most sound advice on addressing your individual tax matters.

Click here to read more on how the IRS views Divorced/Separated Parents

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Post-Divorce Issues

Finally receiving the divorce decree is an accomplishment for divorcing parties, however, it does not always mean the end of the matter. If custody and support were issues were raised as part of the divorce, even though an initial resolution may have been met, both are issues which can be revisited based on change of circumstances. Additionally, in either a court order on equitable distribution or a settlement agreement reached between the parties, there may be provisions which carry additional obligations to be fulfilled even after the divorce has concluded. Support and custody issues always carry a continuing obligation to either pay a certain amount per month or follow a certain custody schedule. There are also several scenarios when dealing with marital property that can create a continuing obligation.

For example, when a marital residence is being kept by one party, there will likely be a provision granting the party a certain number of days to refinance the property and buy the other party out for their share of the equity. If the refinance does occur, a deed will probably be needed to place the title into only one party’s name if not already done. If the refinance does not occur in that time frame, the alternative is usually to put the house up for sale and split the proceeds. If the parties cannot agree about selling the house, selecting a realtor, setting a price, etc., either party may seek assistance from the court. This would involve a Petition for Contempt and Enforcement of the court order or agreement. Most well-drafted agreements will include a provision that the party defaulting on their obligations will be the party responsible for any additional legal costs incurred to enforce the agreement.

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Practical Steps in Preparing for Divorce

Many clients contemplating divorce have questions about what they should do even prior to filing for divorce to protect themselves. Below is a list of some proposed actions from personal finance company, Kiplinger’s.

Obtain a credit card in your own name if you don’t already have one.

Obtain a checking and savings account in your own name.

Withdraw half the money in joint accounts or change the signature authority so that both parties must sign to complete any transaction. (Beware that if you withdraw all the money in a joint account you may be ordered to give back a portion by the court down the road and accordingly, it is not wise to spend it.)

Collect all information accessible to you regarding your spouse’s bank accounts, retirement/pension plans, insurance policies, real estate interests, and any other financial assets.

Get copies of state and federal income tax returns for the past few years.

The purpose of these actions is to preserve your financial stability going forward by putting things into your own name. You are also ensuring that joint accounts will not be used or closed out by the other party without receiving your fair share. Ultimately, the court will determine what that fair share is at the time the divorce is finalized and that is why the money should not be spent pending the finalization of the divorce. Another tip for parties who are selling a marital home either prior to filing divorce or while the divorce is pending, is to hold the proceeds of the sale of the home in escrow. The share of the proceeds payable to each party would then be determined at the time of equitable distribution.

Click here to view the Kiplinger’s Article: Divorce and Your Money

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Fault Grounds for Divorce

Most divorces proceed on the basis of no-fault or irretrievable breakdown of the marriage based on mutual consent after ninety days or two year separation, however, fault grounds for divorce can still be utilized. Under 23 Pa CS 3301(a), the fault grounds for divorce are listed and include(1) desertion for the period of one or more years; (2) adultery; (3) cruel and barbarous treatment; (4) bigamy; (5) imprisonment for a term of two or more years; and (6) indignities to the point of life being intolerable and burdensome. The party alleging fault must prove its existence and must also establish they are the “innocent and injured spouse.” 

23 Pa CS 3301(b) discussing another ground for divorce infrequently used: institutionalization. This provision allows a divorce on the ground that insanity or serious mental disorder has resulted in the other spouse’s confinement in a mental institution for at least 18 months without reasonable prospect the spouse will be discharged. “A presumption that no prospect of discharge exists shall be established by a certificate of the superintendent of the institution to that effect and which includes a supporting statement of a treating physician.” There is often no benefit to pursuing fault grounds for divorce over no-fault grounds as fault is not a factor to be considered in equitable distribution (division of property). However, the laws of support do address fault grounds in two instances: as a defense to paying spousal support and as a bar to receiving alimony.

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Division of Military Benefits

A spouse is entitled to their share of the military pension no matter how insignificant. Under the 10 year rule, where the parties have been married for 10 years and the servicemember has accumulated 10 years of service, DFAS (Defense Finance and Accounting Services) can pay the spouse directly. When the 10 year rule has not been met the servicemember will be responsible to pay the spouse themselves. This, of course, makes it harder to enforce the distribution of the pension. A court can only award a division of a military pension if it has jurisdiction over the servicemember via residence, domicile or consent. Only disposable retired pay can be divided. This is the total monthly pay less certain deductions. The highest percentage a spouse can receive of the military retired pay is 50%. The spouse will stop receiving military pay when the service-member dies.

In order to continue to receive benefits after the death of the servicemember, a Survivor Benefit Plan (SBP) must be in place. The plan is available if both parties elect it and pay the required premium. It will allow the spouse to continue to receive retired pay post-death of the servicemember. The surviving spouse is entitled to 55% of the retired pay received by the retiree. To ensure the spouse receives the SBP as a former spouse, you must complete a deemed election specifying that the spouse will be named as a former spouse under the SBP within one year of the dissolution of the marriage.

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Exclusive Possession of Marital Residence

Pursuant to 23 Pa. C.S. § 3502(c), the court has the express authority to award exclusive possession of the marital residence to one or both parties during the pendency of the divorce. This provision was added to the law in 1990. Prior to that, the court had determined it had the authority to grant exclusive possession of the marital residence under the “full equity power and jurisdiction of the court” found at 23 Pa. C.S. §3323(f). This provision gives the court the authority to issue injunctions or other orders necessary to protect the interests of the parties. Laczkowski v. Laczkowski, decided in 1985, was the first case to hold that the court could award exclusive possession of the martial residence during a divorce. 344 Pa. Super. 154 (Pa. Super. 1985). In Laczkowski, the home was to be given to the spouse having physical custody of any minor children.

Other cases have clarified and expanded the instances under which exclusive possession may be ordered. In Uhler v. Uhler, the court indicated exclusive possession should only be awarded sparingly. 428 Pa. Super. 630 (Pa. Super. 1993). Uhler also pointed to the emotional welfare of children as the most important consideration. In Vuocolo v. Vuocolo, the court held an award should be based not only on the needs of minor children, but also the age and health of the parties and their financial needs and resources. 42 Pa. D. & C. 398 (1987). In Merola v. Merola, the court granted exclusive possession in an instance where there were no minor children but the wife was vulnerable and confined to a wheelchair. 19 Pa. D. & C. 4th 538 (1993). In contrast, in Duzgon v. Duzgon, the court did not grant exclusive possession based on wife’s allegations of tension in the home because of husband’s phone calls to his girlfriend. 76 Pa. D. & C. 4th 538 (2005). The court’s rationale was that there was no abuse between the parties and hence no clear need for husband to be excluded from the home. In sum, an award of exclusive possession is a harsh remedy that will not be awarded without clear need and is more likely to be awarded where minor children are involved.

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Mandatory Waiting Period for Divorce

Many states require some waiting period between when a divorce complaint is filed and when a divorce will be granted. In Pennsylvania, a no-fault divorce may be granted after a waiting period of 90 days provided both parties consent to the divorce at the conclusion of the waiting period. This waiting period is often referred to as a cooling-off period. It is arguably utilized in many states to give the parties an opportunity to reflect on the severity of the decision to get a divorce and/or seek marital counseling to see if the relationship can be saved. At this point, almost half of the states have some waiting period between when you file and when you can be divorced.

It is unclear if there is any correlation between longer waiting periods and fewer divorces. New Jersey has one of the longer waiting periods for a no-fault divorce at 18 months and also has one of the lowest divorce rates in the country. On the other hand, Arkansas also imposes an 18-month waiting period and has one of the highest divorce rates. Perhaps the key to determining the impact of the waiting periods would be a study into how many couples do end up reconciling during the waiting period if reconciliation is the ultimate goal behind the divorce laws. Pennsylvania does specifically indicate its policy is to “encourage and effect reconciliation and settlement of differences between spouses” as the “protection and preservation of the family is of paramount concern.” 23 Pa. C.S. 3102.

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Reconciliation Pending Divorce

Potential reconciliation between parties going through a divorce can have an impact on the course of the divorce. Specifically, if a party is pursuing a divorce on the grounds of two-year separation, a reconciliation may result in a new date of separation date and hence a new two-year waiting period. Case law has distinguished what actions/behavior will be considered a successful reconciliation, hence tolling a new period of separation, versus those actions/behavior that will not change the initial separation date. Separation for the purposes of divorce is defined as the “complete cessation of any and all cohabitation.” Cohabitation, though not specifically defined in the divorce code, is generally understood to be living and dwelling together as husband and wife with the mutual assumption of all marital rights, duties and obligations. It requires more than just remaining in the same house overnight or for the weekend or taking a week long trip together. This is still true even if the parties engage in sexual relations. Instances of sexual relations during a separation will not alone establish a reconciliation. The public policy of the Commonwealth is to encourage a reconciliation where possible and so it is reluctant to punish parties for unsuccessful reconciliations by causing the period of separation to have to start again because of a failed attempt.

In Thomas v. Thomas, 335 Pa. Super. 41 (1984), the Court expressed its agreement with neighboring states who treat the issue of reconciliation similarly. For example, in a New Jersey case the court held that a four week trial reconciliation period did not defeat the previously established separation date (Brittner v. Brittner, 124 N.J. Super. 259 (1973)). In Delaware, the law provides that any reconciliation attempts that occur prior to the 30 days immediately preceding the hearing on divorce will not affect the initial date of separation. Accordingly, attempts at reconciliation may not necessarily change the date of separation for the purposes of the divorce. The court would examine the facts of the reconciliation to determine if it was a full-blown resumption of the marital relationship which would potentially result in a different date of separation or alternatively, treat the failed attempt as further evidence that the marriage is irretrievably broken and the divorce should proceed on the initial separation date. In Britton v. Britton, 400 Pa. Super. 43 (1990) a reconciliation did defeat the period of separation when the reconciliation lasted three months, the parties resumed living together, ceased to maintain separate residences, jointly purchased a townhome, shared the same bedroom, engaged in sexual relations, shared a joint bank account and had a social life as husband and wife.

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No Fault Divorce

The divorce rate reached an all time high in the 1970’s due to the introduction of no-fault divorce. A no-fault divorce meant that the parties could get a divorce without having to prove any wrong-doing in court. Essentially, all the parties have to do for a no-fault divorce is indicate the marriage is over. Prior to the influx of no-fault divorce, parties had to prove that the requirements for a fault divorce were met. Fault grounds for divorce in Pennsylvania include desertion, adultery, cruel and barbarous treatment, bigamy, imprisonment, and indignities. The majority of divorces will go through on the basis of no-fault since it is easier to litigate and often times there is no benefit in the outcome of the divorce to pursuing a fault ground for a divorce.

To move forward with a no-fault divorce in Pennsylvania, 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. No-fault divorce became available in Pennsylvania in 1980 when the Divorce Code was revised. Originally, a separation period of three years was required but that has since been reduced to the two year separation period currently required.

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