Equitable Distribution of Marital Property

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Once you have identified your marital property, the next step is reaching an equitable distribution. Equitable distribution in Pennsylvania is not an automatic 50/50 split. Instead, there are thirteen (13) factors to be considered by the court in determining the appropriate division of a marital property. A few of the factors include the length of the marriage, sources of income and needs of each of the parties, value of property set apart to each party, standard of living established during the marriage, economic circumstances of each party as time division of property is to become effective, and whether either party will be serving as custodian for dependent minor children.

In a divorce involving equitable distribution, the parties are tasked with identifying all the property to be considered. Each party is to file an inventory of assets. The Inventory should list all marital assets and debts at issue, its value or balance, anything that has been transferred, and anything a party asserts is non-marital in nature. An Inventory must be filed prior to requesting a hearing on equitable distribution. You can supplement the list of marital property if you do not have knowledge of all the assets and debts at the outset. A pre-hearing statement must also be filed if a party is seeking a hearing to address equitable distribution. Similar to the Inventory, you will list all marital assets and debts. You will include as exhibits the statements or documents for each item confirming their value or balance. It is important to work with an experienced family law attorney when dealing with equitable distribution matters to ensure all marital property is identified, valued and submitted to the court in a timely fashion.  By April M. Townsend

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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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Debts of Estate

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Prior to any distributions of the assets of an estate, the debts of the estate should be reviewed. Section 3392 if Title 20 discusses the priority for payment of the debts of an estate. First, the costs of administration should be covered. These costs can include filing fees for the probate process, attorney fees, advertisement costs and compensation for the executor or administrator. Next, the family exemption of $3,500, applicable in the case of a surviving spouse or children living with decedent at the time of death, is paid. Next, the costs for the decedent’s funeral and burial are to be paid. This can include costs incurred through the funeral parlor, the cemetery, flowers for immediate family and funeral luncheon.

Next in the line of debts to be paid would be medical costs for the decedent for the last six (6) months followed by cost of grave marker and then any rent owed on decedent’s property in the last six (6) months. The final category is any debt owed to the Commonwealth. Other debts in the decedent’s individual name, such as credit cards, are at the bottom of the list. There may also be instructions to pay inheritance taxes from the residue of the estate prior to distribution. It is important to pay these debts in order of priority in any case but particularly where there may not be enough assets in the estate to pay all the debts.

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Counseling for Natural Parents

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Natural parents can take advantage of court-sponsored counseling services when facing termination of their parental rights. Each county is responsible for keeping a list of qualified counselors who are available to assist natural parents contemplating voluntary relinquishment or facing involuntary termination of their parental rights. Prior to any adoption of a minor taking place, the rights of the natural parent(s) must be terminated. This is a permanent termination and accordingly, the courts take all necessary steps to ensure that the natural parents understand the gravity of the situation and have a chance to discuss with a qualified professional. A portion of the filing fees paid to the court for adoption/termination proceedings goes to support that county’s counseling fund and subsidize the costs for counseling where the natural parent(s) desire to participate but are unable to afford it.

It is the court’s responsibility to confirm whether the natural parent(s) had an opportunity to utilize counseling services if they appear at the termination hearing. If the natural(s) have not received any counseling, the court can postpone a decision on termination to allow the natural parent(s) an opportunity to seek counseling. If the natural parents are not present, the court at least requires proof of valid service of the proceedings to the parents. The required notice for termination hearings does make it clear that natural parents have a right to appear at the hearing but if they fail to do so their rights can be terminated by the court. The notice also informs natural parents of their right to seek an attorney and strongly advises that they do so.

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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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Certificate of Adoption

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Following successful adoption, the court shall issue a Certificate of Adoption pursuant to 23 Pa. C.S. Section 2907. This certificate is signed by the Judge and verifies the court has granted the adoption. The certificate can be used as evidence for any subsequent legal proceedings. The name(s) of the natural parents are not to be disclosed on the Certificate of Adoption. The Certificate of Adoption includes a raised seal. Additional certified copies of the Certificate can be requested from the court post-adoption. Nominal cost may be assessed for each additional certified copy.

In addition to the Certificate of Adoption, adoptive parents can also request a new birth certificate for the adoptee. The Department of Vital Records handles requests for new birth certificates. There is a form to complete as well as a fee for new birth certificate. You should be sure the Department of Vital Records has received confirmation of the adoption from the court prior to ordering a new birth certificate. The new birth certificate can reflect new name of adoptee, if applicable, and the names of the adoptive parent(s) would replace the names of the natural parent(s).

 

 

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Bond for Estate

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You may be required to post bond if the last will and testament does not waive the requirement, if you as the executor or administrator reside out-of-state, or if beneficiaries of the estate are minors. The purpose of posting bond is to ensure the administration of the estate is carried out properly. Specifically, to protect any beneficiaries or creditors from harm based on any negligence on the part of the executor or administrator. The required amount of the bond is based on the total estimated value of the estate and the executor or administrator usually only needs to post a percentage of the total bond.

Many insurance companies are able to assist in obtaining bond. The insurance company would then pay out the value of the estate if the administration is faulty based on the acts, or omissions, of the executor or administrator.The court may have a list of local agents that routinely do estate or probate bonds. A credit check may be required in applying for bond. The application often includes inquiries into the overall financial status of the executor or administrator and their personal assets. The executor or administrator can be released from bond upon proper completion of the administration of the estate. The court may need to formally grant release from bond which would require a petition for release to be filed. The principal posted for the bond can be returned if the executor or administrator had not done anything that resulted in loss to the estate.

 

 

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Self-Proving Will

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A last will and testament is a legal document that directs how your affairs should be handled after you pass away. The document allows you to specify who you will leave your assets to and in what amounts or shares. You can also designate an individual to be responsible for carrying out the terms of your last will and testament. This person called an executor, or if female, an executrix. Make sure your loved ones know where you will is stored to be able to access it at the appropriate time. Your original will is to be provided to your county’s Register of Wills or Surrogate Office to begin administration of the estate.

A self-proving will is one that has been witnessed and signed in the presence of a notary and includes an affidavit regarding the circumstances at the time of execution. Pennsylvania and New Jersey require at least two (2) witnesses. Prospective witnesses should be disinterested, meaning they are not beneficiaries of the will and have no individual interest. The affidavit acknowledges the presence of the witnesses at the time the will was signed, that the will was executed voluntarily and that to the best of their knowledge, the individual executing the will was of sound mind. Having a self-proved will can reduce the likelihood of will contests during estate administration and streamline the process in terms of not needing to further verify the will.  By April M. Townsend

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Right to Child Support

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Child support is paid between parents for the benefit of their children. It is up to the parents to timely file for support to get a support award established. They are also responsible for seeking any necessary modifications. Change in income of either party or a change in the custody schedule for the child can impact the amount of support owed. If you have requested support through the court, the court will assist in monitoring compliance with the order as well as petitions for contempt and enforcement for lack of compliance. If you have a private agreement for child support, you will need to keep track of payments and file for relief with the court if there is an issue.

While support is for the benefit of a child, the child cannot legally make any demands regarding support or seek to recoup payments. This issue has been previously addressed by the courts in Pennsylvania. In Chen v. Chen, 893 A.2d 87 (2006), parents had entered into a Propery Settlement Agreement with provisions for child support. Father had an obligation to notify of income changes that may warrant an increase in support but he never did. The parties’ daughter, once 18, filed to intervene in a pending petition for contempt and enforcement of the agreement which was initially filed by Mother. Daughter argued that as the intended beneficiary of the support, she had standing to pursue enforcement. The lower courts agreed and calculated unpaid support of over $59,000 due to Father’s failure to update the support award over the years despite increased income. The Supreme Court of Pennsylvania reversed the prior decisions finding that while children may be incidental beneficiaries of a support award, they do not have a direct interest in receiving cash payments. Instead, the intent is for support of the child generally through the parent with custody.

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