Appraisals

An appraisal may be needed to ascertain an accurate value of an asset in a divorce or estate matter. Parties may elect to use one appraiser or have competing appraisers. When choosing an appraiser, it is important to make sure the appraiser is licensed or certified. A licensed appraiser has met the minimum requirements for practice. A certified appraiser must complete additional classroom hours and practice in the field. A list of all licensed and certified appraisers is available on the appraisal subcommittee website.

An ideal appraiser should have prior experience with the exact type of appraisal sought. This would include experience in the geographic market, the type of property, and intended use of the property. You should discuss with the appraiser if any information you supply to them is confidential and should not be included in their report. You should also make it clear who the appraiser is permitted to discuss the appraisal with and/or share the report with. Finally, you should be clear about the valuation date for the appraisal. This may be the date of purchase, date of separation, date of death, or current value. Per the Uniform Standards of Professional Appraisal Practice, appraisers are not permitted to revise an appraisal to account for a different valuation date after completion. Instead, the standards require a completely new appraisal which is not cost-efficient.

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Annuities

An annuity is an investment of a resource in order to receive a fixed payment. Once the investment is annuitized, the original investment cannot be returned. At that point, the characterization of the investment is changed from an asset to income. An annuity is considered marital property and subject to division in the event of divorce. Parties should be careful to review the terms of the annuity contract in determining the best way to split this asset. The goal should be to minimize any tax implications or penalties in dividing the asset. The best option may be off-setting the value of the annuity with another asset in the divorce such as a marital residence.

An annuity may be desirable in terms of long term care planning. Specifically, if a party is looking to qualify for Medicaid and they are over the limit for resources, they may consider changing a resource to an annuity and thereby having it count as income instead. Parties should be careful since there are also income limits for qualifying for Medicaid. Other requirements include naming Medicaid as a second beneficiary for the annuity and electing a period certain annuity as opposed to a life annuity.

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Filing for Support

The first step in seeking support is to file a complaint with the Domestic Relations office. You can go to the office located in your county for assistance in filing. Through the child support program website you are now able to start a request for support online. Once a complaint is submitted, an initial support conference is scheduled for approximately four weeks later. Any support will be retroactive to the filing date so parties requesting support are not prejudiced during this time frame.

Both parties are directed to bring proof of income to their initial conference. This includes recent pay stubs and last filed tax return and W-2. Proof of certain expenses is requested as well. Relevant expenses may include health insurance premiums, mortgage payments, child care costs, and private school tuition. Parties who are unable to appear in person may request to appear by phone provided all the requested income and expense information is supplied in advance of the conference. The conference officer will use the information provided to do a calculation pursuant to the Pennsylvania guidelines. Parties can accept the calculation and enter a final order at the conference. Alternatively, parties can request a hearing if there are unresolved issues following the conference.

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Inheritance Taxes

Pennsylvania does apply a tax on assets passed through probate or intestacy. The amount of tax depends on the value of the estate as well as the relationship of the beneficiaries to the decedent. There is no tax imposed for assets passing to a surviving spouse or to a child under 21 years old. There is a 4.5% tax for assets passing to children over 21, parents or grandparents. There is a 12% tax for assets passing to siblings. There is a 15% tax for all other transfers including to aunts, uncles, nieces, nephews, cousins or persons of no relation. There are some institutions exempt from the inheritance tax including certain government entities and charitable organizations.

Inheritance taxes are to be paid within nine months from the date of death of the decedent to avoid any penalty. A 5% discount on the tax is extended for returns filed within three months from date of death. Assets passing outside of the will or the rules of intestacy are not subject to the inheritance tax. Popular examples of assets passing outside of the will are life insurance policies, retirement plans and other assets with a designated beneficiary. Additionally, assets jointly owned with rights of survivorship will automatically pass to the surviving owner.

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National Domestic Violence Awareness Month

October is National Domestic Violence Awareness Month. You can visit www.nnedv.org for details on the daily initiatives. The goal is to provide information on what constitutes domestic violence and how to address it once recognized. Thursday, October 19th, is purple Thursday and people are encouraged to wear purple to raise awareness. Pennsylvania has several laws in place to protect victims of domestic violence.

The Protection from Abuse (PFA) Act provides a civil remedy in the form of a stay away order. The PFA Act can only be utilized if there is a certain relationship between the victim and the offender; specifically, family or household members, sexual or intimate partners, or persons who share biological parenthood. Abuse under the PFA Act includes causing or attempting to cause bodily injury, rape, involuntary deviate sexual intercourse, sexual assault, placing another in fear of imminent serious bodily injury, infliction of false imprisonment, physically or sexually abusing minor children, and stalking in the sense of engaging in a course of conduct which place a person in reasonable fear of bodily injury. Three years is the maximum length of a PFA Order. Violations of a PFA Order can carry criminal violations.

Pennsylvania’s Protection from Sexual Violence and/or Intimidation Act (PSVI) is another civil remedy that allows victims to obtain a civil no-contact order for up to three (3) years. Adults and minors can petition for an Order on the basis of sexual violence. Only minors may obtain an Order on the basis of intimidation provided the offender is over 18 years old. There is no filing fee to file. A temporary Order can be granted following an ex parte hearing. A final hearing must be held within ten (10) days of when the Petition is filed. The victim must establish sexual violence and/or intimidation by a preponderance of the evidence. The PSVI Act does not restrict protection based on relationship of the parties involved. Sexual violence for purposes of the PSVI Act includes but is not limited to rape, involuntary deviate sexual intercourse, sexual assault, indecent exposure, and unlawful dissemination of an intimate image. Violation of a PSVI Order can also carry criminal consequences.

Click here to read more about domestic violence.

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Dividing the Marital Residence

The marital home is often one of the bigger assets to be divided in the context of a divorce. There are two options available regarding division of the marital residence. First, one party can keep the home and buy the other party out for their share of the equity. Equity would be determined by the fair market value of the home minus any mortgages or other liens on the home. The second option is for the home to be sold and the proceeds divided among the party. As a matter of equitable distribution, the disposition of a home would generally not be heard until grounds for the divorce have been established and the matter is scheduled for court. However, the family court has the authority to make determinations regarding a marital home even prior to or an equitable distribution hearing or entry of a divorce decree. The court can grant one of the parties exclusive possession of the home while the divorce is pending under Section 3502 of the Divorce Code. An award for exclusive possession should not be given lightly and the party requesting it has the burden of proving its necessity.

Section 3323 gives the court general equity powers to issue any order necessary to protect the interests of the parties or as justice requires. This can include an order mandating a party to pay the mortgage on time, forcing the home to be sold if neither party can afford it pending divorce, and even decisions on which realtor should be used or what the listing price should be and decisions on dropping the price. If reaching a private agreement on what to do with a marital residence, you should contemplate issues which may arise and set forth contingency plans. For example, you can spell out how all expenses of the home will be covered post-separation. You can dictate a timeline for buy-out of equity if one party is keeping the home. Commonly, a refinance is done to remove the other party’s name from the financial responsibility for the home and to access funds necessary for the buy-out. In the case of sale, you can specify at the outset how a realtor will be chosen, what range is acceptable for the asking price, under what circumstances reductions will be made to the listing price if the home has not sold within a certain time frame. It is also useful to explain how parties will be compensated, if at all, for any pricey expenses/repairs above the costs of regular maintenance to ensure the home will sell. Lastly, you want to spell out how the proceeds will be split.

Click here to read more about dividing property.

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Confirmation of Consent in Adoption

One of the ways an adoption can proceed is if the natural parent(s) consent to the adoption. A Petition for Confirmation of Consent can be filed by the party executing the consent or the party intending to adopt the child. Pursuant to 23 Pa. C.S. Section 2711, a consent must be signed by the following individuals where applicable: (1) the child(ren) being adopted if over 12 years of age; (2) the spouse of the adopting parent if that spouse is not also a petitioner; (3) the natural parent(s) of any minor child(ren) being adopted; (4) the guardian of an incapacitated child up for adoption; and (5) the guardian of a minor child or persons having custody when the adoptee has no parent whose consent is required. There are several timing rules that must be adhered to. First, the consent cannot be signed by a natural mother within 72 hours, or three days, after the birth of a child. A consent can be signed by a natural father at any time after he has been notified the child is expected to be born or has been born. Executed consents become irrevocable after 30 days. The can be revoked on the basis of fraud or duress within 60 days.

As far as other technical requirements, the consent must include the date, full address of place of execution, and be witnessed by two adults whose name, address and relationship to the person executing the consent are provided. It is good practice to also have the consent notarized and the notary’s complete address should be included. Another practical tip is to be careful who you select as a witness. Ideally, the witnesses should be completely disinterested with no stake in the outcome of the adoption. The persons witnessing the consents will be called upon in court to testify as to the circumstances under which the consent was executed. The court must be satisfied that there was no fraud or duress and the person executing the consent was of sound mind. After a hearing, the court can enter a decree for termination of parental rights based on the proper execution of the consent and an adoption can proceed.

Click here to read more about adoption.

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Donor Agreements

Donor agreements are vital for identifying the legal rights of parties considering artificial insemination as part of assisted reproduction. An agreement should indicate that the donor does not have any rights subsequent to the donation. Specifically, the agreement should explain that no parental relationship is intended for the donor. It should be clear that donor’s parental rights are terminated and that the donor forever forfeits the ability to file for any type of custody or visitation if a child is subsequently born. The agreement would allow the recipient to dictate what happens with the donation or any embryos created using the donation.

Similarly, the party receiving the donation should waive the ability to file for any support from the donor. The agreement should also direct that the donor’s name not be on the birth certificate or any other legal document concerning parentage of the child. In the event of a known donor, you may also want to spell out if the child will ever be introduced to the donor. If this is a possibility, you may want to ask that contact information be kept up-to-date. The more likely scenario, however, is the use of an anonymous sperm donor. Regardless of the identity of the donor, best practice is to make sure a clear written agreement is in place to protect everyone’s respective interests.

Click here to read more.

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Medicaid Planning

Medicaid is a need-based health care program. It is a federal program that is administered on a state level. Elderly persons needing long-term care often try to utilize Medicaid to assist with the expenses. Appropriate estate planning can assist in this regard. Since Medicaid is for low-income individuals, there are limits on the amount of income and assets a party can have. An individual should plan ahead to make sure any countable assets and income are structured so as not to affect any future applications for Medicaid. Medicaid can look back five years from the date of an application so it is important to do any relevant estate planning well in advance.

Certain assets are not countable in terms of eligibility for Medicaid. One of the big exemptions is your home. Current federal law allows one residence to be exempt with a cap of $560,000 for the total equity of the home. Even if the home is above that amount of equity, it may still be exempt if a spouse, child under 18 or permanently disabled child is still residing in the home. A party seeking Medicaid cannot have more than $2,000 per month income. There are additional rules as far as assets your spouse can keep under the anti-impoverishment provision. It is important to plan for the potential of long term care well before the need for it arises to protect your assets.

Click here to read more about estate planning.

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Protection from Sexual Violence and/or Intimidation

Pennsylvania’s Protection from Sexual Violence and/or Intimidation Act (PSVI) became effective July 2015. The Act allows victims to obtain a civil no-contact order for up to three (3) years. Adults and minors can petition for an Order on the basis of sexual violence. Only minors may obtain an Order on the basis of intimidation provided the offender is over 18 years old. There is no filing fee to file. A temporary Order can be granted following an ex parte hearing. A final hearing must be held within ten (10) days of when the Petition is filed. The victim must establish sexual violence and/or intimidation by a preponderance of the evidence.

The Protection from Abuse (PFA) Act also provides a civil remedy in the form of a stay away order however the PFA Act can only be utilized if there is a certain relationship between the victim and the offender. The PSVI Act does not restrict protection based on relationship of the parties involved. Sexual violence for purposes of the PSVI Act includes but is not limited to rape, involuntary deviate sexual intercourse, sexual assault, indecent exposure, and unlawful dissemination of an intimate image. Violation of a PSVI Order can carry criminal consequences. Pennsylvania is the 34th state to pass such an Act to provide some protection for victims of sexual assault since many cases do not make it into the criminal justice system.

Click here to read more about domestic violence.

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