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Real Estate Ownership in Pennsylvania

In Pennsylvania, there are several ways that real property (i.e. houses) may be titled. When two or more people own property together, they should be aware of the manner in which the property is owned:

Tenants in Common – When property is owned as tenants in common, each owner owns a certain percentage of the property. Usually, this ownership is equally divided, but can be altered on the deed itself. If you own real estate in this manner, you can do as you please with your share. For example, you can sell your interest in the property, or you can leave it to a friend or family member in your will. When you pass away, your share is distributed through the probate process, and not necessarily to the owners who survive you. Even though all owners own a percentage of the property, they all have the right to enjoyment and possession of the property.

Joint Tenants with Right of Survivorship – When property is owned this way, all owners have the right to enjoyment and possession of the property. However the property passes directly to the survivor(s) upon the death of one of the owners. The owners may not sell or gift their portion of the property without consent of the other owners.

Tenants by the Entirety – This is similar to Joint Tenants, except that the owners must be married to each other. This form of ownership may be dissolved upon death or divorce of either spouse. If it is due to divorce, the ownership reverts to Tenants in Common.

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Dividing home equity in a Pennsylvania divorce as real estate rebounds

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Improvements in the housing market mean that more couples again have equity in their homes. Division of marital property is one of the challenges in any divorce. When a marital home will be too expensive or more than one spouse can maintain, selling the home is again becoming an option. The sale of a home can result in a sizable profit, but consider the tax consequences and timing of the sale.

In Pennsylvania, the court equitably divides property in a divorce action by reviewing certain factors including some of the following:

The duration of the marriage;
Age, health and sources of income available to each of the spouses;
Contributions or dissipation of assets made by each party; and
Whether there are any minor children.
Equitable division does not always mean an equal award of the equity in the home. If one of the spouses owned the home prior to the marriage or sold a previous home prior to the marriage to secure a down payment, part of the equity may be considered non marital. This means it would belong to the spouse that brought the asset to the marriage and would not be divided.

While a divorce is pending, the court can award one or both of the spouses the right to continue to live in the martial home. When it is not practical for either spouse to stay in the home, the spouse who lives in the home may need to list the home for sale.

TAX CONSEQUENCES OF THE SALE OF A PRINCIPAL RESIDENCE
When certain rules are met, the seller of a principal home can avoid paying federal income tax on up to $250,000 ($500,000 for a married joint-filing couple) of the gain in value. When a couple has owned a home for many years in an area that has appreciated this becomes very important.

The Internal Revenue Service test requires that the seller owned and used the property as a principal residence for two years during the five-year period preceding the sale. To pass the joint-filer test, both spouses must pass the use test and one must pass the ownership test.

This is very straightforward when the sale occurs before a finalized divorce decree or within the same year. The couple could file jointly for one more year and claim the $500,000 exclusion.

When a sale of the principal residence happens after the divorce and the court awards the home to one of the spouses, then that spouse may only be able to claim the $250,000 and will owe taxes on any additional gain from the sale.

When considering divorce, contact an experienced family law attorney. Advice at an early stage in the process often means avoiding costly mistakes down the road.

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Social Networking: Have Fun, Keep Current and Ruin Your Divorce Case

What happens on social networking sites stays in the public domain, which more and more divorcing couples are experiencing to their detriment. Evidence found on social networking sites like Facebook and Twitter is increasingly used in family law courts. Judges take information gleaned from these sites as a factor in child custody decisions, alimony awards and property division.

Even dating sites, like Match.com have been used by Judges in deciding incomes for support purposes. If you think it is a good idea to inflate your income to look more attractive to prospective partners, you might want to reconsider doing that unless you are prepared to be held to that income for purposes of support. Remember, Judges have the power to decide credibility and if they don’t believe the income you present on paper and you are self-employed, they can and do hold you to a higher income, especially if you boast about how much you make on dating websites.

One ex-spouse’s claim that she could not work because of injuries sustained in a car accident was repudiated by her posts regarding her belly dancing activities, which prompted a New York Judge to deny her claim for spousal support. Parents seeking custody of their children can have their hopes crushed when posting photos online involving alcohol or drug use. Claims that one spouse cannot afford a certain level of alimony ring hollow when he or she “tweets” about buying a brand-new car or about vacations they are taking with others.

PRIVACY FEATURES MAY NOT MATTER
Many social networking sites have privacy features, but this does not always protect such information from being used in court. Judges are increasingly allowing access to online photos, posts and other information, even if protected or reserved for “friends,” by the opposing party in discovery (the legal process of obtaining evidence in a court case). In addition, many people unfamiliar with various privacy settings do not use those features, meaning anyone can access that information, including opposing attorneys.

TIPS FOR ONLINE POSTINGS DURING DIVORCE
Many experienced divorce lawyers urge their clients to practice caution when posting online, especially when in the middle of a contested divorce. While it can be tempting to vent online, negative posts about the ex-spouse or the divorce process, for example, can actually harm the poster. Generally, it is best simply to stay away from social networking sites altogether when going through divorce; if that seems too extreme, at least be aware that what is posted may very well end up in court. If inappropriate to say in front of a Judge, chances are posting it online isn’t a good idea either.

If you are facing divorce, contact a knowledgeable family law attorney who can advise you on property division, child custody and potential alimony.

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What’s changed with New Jersey’s new alimony reform laws?

Overhaul ends permanent alimony and makes it easier to reduce payments

In September of last year, New Jersey passed sweeping alimony reform legislation that is expected to have a big impact on family law cases in the state, according to The Record. The legislation brings a number of changes to spousal support in New Jersey, most importantly an end to permanent or lifetime alimony in most cases. The legislation has proven controversial, both for those who supported reform and those who were against it.

What has changed?

Under the new law, alimony payments will be limited to the length of the marriage. A court can only order a spouse to pay alimony for a maximum of 11 years, for example, if the marriage itself lasted 11 years. The law also stipulates that alimony payments end once the payer reaches retirement. However, alimony payments may continue beyond these limits in “exceptional circumstances,” such as when the payee becomes permanently injured during the marriage and is unable to return to the workforce.

The law also makes it easier for payer’s to reduce or terminate alimony in other circumstances. For example, according to NJ Advance Media, if the payee moves in with a new partner then in most cases his or her alimony payments will be terminated. Likewise, people paying alimony who have lost their job can apply to have payments reduced or terminated within 90 days.

Changes controversial

While many agreed that New Jersey’s old alimony laws were outdated, not everybody is happy with the changes. Those who were advocating for reform say the new law does not go far enough. For example, the changes will only apply to divorces filed after the law took effect and not retroactively. They also were hoping for clearer guidelines for how alimony amounts were calculated.

Other critics say that the law, while well-meaning, could have unintended consequences. For example, they say that the stipulation that alimony ends when the payee moves in with a new partner is too strict, especially since moving in with a new partner does not necessarily constitute a change in financial circumstances. Likewise, the rule that alimony ends when the payer reaches retirement-a rule that also applies to divorces filed prior to the law’s passage-could hurt people who divorce later in life.

Family law representation

New Jersey’s alimony reform is a significant step in how courts deal with spousal support and reflects changes that have been occurring across the country. The overhaul also show that when it comes to family law matters, people are still well advised to rely on a professional family law attorney in order to address their specific concerns. Alimony and other family legal issues remain complicated and difficult to understand for somebody without legal experience, but they can have a big impact on many people’s emotional and financial lives. As such, relying on expert advice can help ensure that these serious issues are dealt with in a compassionate and expert manner.

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What’s changed with New Jersey’s new alimony reform laws?

Overhaul ends permanent alimony and makes it easier to reduce payments

In September of last year, New Jersey passed sweeping alimony reform legislation that is expected to have a big impact on family law cases in the state, according to The Record. The legislation brings a number of changes to spousal support in New Jersey, most importantly an end to permanent or lifetime alimony in most cases. The legislation has proven controversial, both for those who supported reform and those who were against it.

What has changed?

Under the new law, alimony payments will be limited to the length of the marriage. A court can only order a spouse to pay alimony for a maximum of 11 years, for example, if the marriage itself lasted 11 years. The law also stipulates that alimony payments end once the payer reaches retirement. However, alimony payments may continue beyond these limits in “exceptional circumstances,” such as when the payee becomes permanently injured during the marriage and is unable to return to the workforce.

The law also makes it easier for payer’s to reduce or terminate alimony in other circumstances. For example, according to NJ Advance Media, if the payee moves in with a new partner then in most cases his or her alimony payments will be terminated. Likewise, people paying alimony who have lost their job can apply to have payments reduced or terminated within 90 days.

Changes controversial

While many agreed that New Jersey’s old alimony laws were outdated, not everybody is happy with the changes. Those who were advocating for reform say the new law does not go far enough. For example, the changes will only apply to divorces filed after the law took effect and not retroactively. They also were hoping for clearer guidelines for how alimony amounts were calculated.

Other critics say that the law, while well-meaning, could have unintended consequences. For example, they say that the stipulation that alimony ends when the payee moves in with a new partner is too strict, especially since moving in with a new partner does not necessarily constitute a change in financial circumstances. Likewise, the rule that alimony ends when the payer reaches retirement-a rule that also applies to divorces filed prior to the law’s passage-could hurt people who divorce later in life.

Family law representation

New Jersey’s alimony reform is a significant step in how courts deal with spousal support and reflects changes that have been occurring across the country. The overhaul also show that when it comes to family law matters, people are still well advised to rely on a professional family law attorney in order to address their specific concerns. Alimony and other family legal issues remain complicated and difficult to understand for somebody without legal experience, but they can have a big impact on many people’s emotional and financial lives. As such, relying on expert advice can help ensure that these serious issues are dealt with in a compassionate and expert manner.

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FAQs on escaping an abusive marriage

Victims of domestic abuse may need help from others to get a divorce. It can also help to create an escape plan and seek a protective order.

For countless people in Pennsylvania and elsewhere, marriage is a nightmare that they may feel they can never escape. Tragically, domestic violence affects millions of men, women and children every year. According to the National Coalition Against Domestic Violence, one in three women and one in four men will be abused by an intimate partner at some point during their lives. The problem is so serious, in fact, that 15 percent of all violent crimes are committed by abusers against their partners. The following questions address some that abuse victims are likely to ask when preparing to end a marriage.

IS DOMESTIC VIOLENCE ALWAYS PHYSICAL?
In many cases, an abuser physically strikes or otherwise causes bodily harm to his or her victim. However, domestic abuse may be emotional, psychological, sexual or financial. Abusers often resort to threats and manipulation to maintain control over their victims. They may restrict their partners from seeing their family members or friends; prevent them from having access to the phone, Internet or the car; and not allow them to work or have any money. Non-violent abusive relationships do not always escalate to physical violence, but often they do.

HOW CAN I ESCAPE AN ABUSIVE MARRIAGE?
It is rarely easy to escape an abusive relationship; this is why it is important to create an escape plan. The National Domestic Violence Hotline suggests implementing the following type of plan:

• Enlisting the help of trusted loved ones

• Keeping emergency cash, clothing and documents in a safe place that the abuser does not know about

• Documenting evidence of physical injuries and keeping a journal of the abuser’s behavior

• Memorizing the phone numbers and addresses of abuse shelters and law enforcement offices

It may also be a good idea at this point to seek a protection order.

WHAT IS A PROTECTIVE ORDER AND HOW DOES IT WORK?
A family law court can issue a protective order to abuse victims that extends certain legal protections. While the order is in effect, the abuser will not be allowed to approach or contact the victims. This may give the victim time to get to a safe place and to begin divorce proceedings. Protective orders are not initially permanent. Both sides will be given the chance to tell their side in court, and a judge can then decide if additional protection is necessary.

You are likely to need professional assistance to leave an abusive marriage. This may include help from law enforcement and abuse counselors. A Pennsylvania family law attorney with experience in domestic violence cases can also be an invaluable ally. Your attorney may be able to help you obtain a protective order, as well as start you on the road to freedom from abuse.

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Estate planning tips for blended families

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Careful estate planning may help people prevent inheritance disputes between their new spouses and their children from prior marriages upon their passing.

It is fairly common for people in Pennsylvania to remarry after a divorce, and often, one or both spouses may have children from a previous relationship. While these blended families offer people new opportunities to love and live, they can pose some challenging estate planning and inheritance issues. Therefore, having a carefully thought out estate plan that takes into account their new spouses’ needs, as well as those of their children’s, may help people prevent family disputes following their deaths.

Review beneficiary designations

The way people list their beneficiaries on retirement accounts, life insurance policies and other such accounts will affect how these benefits are disbursed upon their deaths. For example, it is common for people to update their beneficiary designations to their new spouses upon getting remarried. However, if they name only their new spouses, then they are able to specify their own new beneficiaries. This means that the original policy holders’ children may be bypassed altogether.

As such, people should make their intentions clear when designating their beneficiaries. They may name who the accounts should pass to after their spouses’ deaths or indicate specific percentages that each of their beneficiaries should receive.

Designate specific property separately

People often have family heirlooms or cherished personal property that they intend to pass on to certain children. Without a carefully designed plan, however, AARP points out that their new spouses may be entitled to claim up to half of the assets in people’s wills. Thus, it may be helpful if people leave a separate list of this property, sometimes referred to as a personal property memorandum. This list should describe each item to be gifted in detail and provide specific instructions as to who should receive each item upon their passing.

Consider inheritance timing

For couples who have not previously been married, inheritance timing is somewhat easy. People often leave their assets to their spouses, and their estates are passed on to their children after their spouses pass away. When it comes to second or subsequent marriages, however, withholding distributions of their children’s inheritances until after the death of their new spouses may create hostility and impatience. Therefore, people may consider establishing trusts or outright transfers that occur at the time of their deaths in order to accommodate the needs of both their surviving spouses and their children.

Working with an attorney

In the ideal situation, people in Pennsylvania could rely on their spouses and their children to work out inheritances to all their benefit after they pass away. However, even in long-term second marriages, new spouses and children from prior marriages may have drastically different ideas of what they are entitled to. As such, it will benefit people who have remarried or who are planning to get remarried to seek legal guidance. An attorney can explain their rights, including establishing wills and trusts, and help them set up a plan that provides for the needs of both their current spouses and their children from prior marriages.

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Unearthing hidden assets: Signs your spouse may not be honest

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Some people going through a divorce in New Jersey may attempt to hide assets to prevent a spouse from receiving them in the split.

Any divorce in New Jersey presents a myriad of decisions that must be made: perhaps it has to do with how property may be divided or who will have custody of the children. Though the details of each case may differ, there is one constant: each party should be honest in disclosing any information that would be pertinent to making these decisions.

In fact, New Jersey laws require parties to complete and submit a “family case information statement” within a timeframe set by the court. The statement details family information, employment and income.

When it comes to property division, having a complete picture of each spouse’s assets is critical to ensuring the equitable distribution of those assets. Unfortunately, some people attempt to obscure items in an effort to prevent the loss of them. Here are some signs that this may be occurring:

Large purchases

Cash tends to be king, as it has a concrete value and is easily divided. However, cash is easily spent. When one spouse starts making large purchases – such as with expensive artwork, cars or taking big trips – it may be in an effort to prevent the other spouse from getting that cash. In other words, the cash is being converted into physical assets – and the spouse could even attempt to underreport the actual value of those assets.

Another way to minimize the amount of cash available in a divorce is to overpay a credit card or other debt. Perhaps one spouse decides to start putting extra money into the house payment. Sometimes, people create “fake” debts, such as money owed to a friend, in order to “pay off” the debt so the person essentially holds on to the cash until the divorce is final. This should raise a red flag.

Questionable statements

It is always critical to monitor statements from credit card companies and investments. But what happens if those statements suddenly go missing? Or perhaps have unexpected transactions on them? It could indicate that a spouse is trying to keep his or her other half from accessing assets.

People going through a divorce should also keep an eye out for new statements from banks or credit card companies that may be new. While it is not illegal for someone to open a new account during this time, it is essential that they disclose that information during the divorce proceedings.

Underreported income

Even with the financial disclosure statement is submitted, both parties should thoroughly review it for accuracy. Some people may try to underreport what they make. Though a W-2 or other tax form could easily dispute this, it is not always as easy with people who are paid in cash.

Uncovering assets

Fortunately, with a little work, these hidden assets may be uncovered. Experts suggest hiring a forensic accountant or other specialist who can do a deep dive into a couple’s assets. This process may require providing names, addresses and Social Security numbers of family members.

Anyone who has concerns about this issue should speak with a family law attorney in New Jersey.

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Top Five Mistakes Executors or Administrators Make

While administrating an estate is a lot of work, the process is usually straightforward. Nonetheless, executors/administrators sometimes made mistakes. The TOP FIVE common mistakes are listed below:

1. Not opening an estate right away

When opening an estate, it is usually best to open an estate shortly after someone passes away. As time passes, it is more likely that assets become forgotten, beneficiaries pass away, statutes of limitations expire, businesses have no clear decision maker, or personal property gets destroyed. Taxes are due within 9 months of passing (more on that below).

In the event that the estate has no will, family members may have issues opening an estate. For example, a family member may become difficult to find as time passes. Another possibility is that as time goes by, other family members may pass away, in which there are more steps in distributing funds or you will need to distribute funds to the estates of the deceased relatives.

2. Not paying inheritance taxes in a timely manner

Inheritance tax is due within 9 months from the date of passing. If not paid by that date, the estate is subject to penalties and interest. Furthermore, a 5% discount is available in the event that the inheritance tax is paid within 3 months from passing. Not paying the inheritance tax could be costly to the estate if not paid.

3. Not giving notice to creditors

Creditors are entitled to collect what is owed to them prior to beneficiaries. While a person is alive, a creditor who is not paid can file suit to collect in court for breach of contact up to four years after the breach. However, once an estate is open and an executor advertises in two newspapers (one in the local legal newspaper and one in a newspaper of general circulation), creditors only have 1 year to make a claim. By delaying the advertising (or not giving any notice), the executor is only delaying the distribution.

4. Distributing assets to beneficiaries prior to paying creditors

As stated above, creditors are entitled to collect what is owed to them prior to distribution to beneficiaries. In the event that executors distribute funds to beneficiaries without leaving enough to pay creditors, the executor may be personally liable to pay the creditors. In most cases, they will need to be reimbursed by the other beneficiaries, but that is not always possible or easy (for example, a family member refuses to return money, the family member already spent the funds and can no longer pay the estate back, or a family member cannot be located or passed away since distribution). While I suggest that all beneficiaries sign an acknowledgement and agreement to refund the money in the event of overpayment, enforcement is sometime a challenge. For this reason, it is best to make sure all creditors are paid prior to distribution.

5. Not following the terms of the will

An executor is required to distribute the funds pursuant to the will. In the event that the will is not followed and a beneficiary gets less than what he or she is entitled, the executor may be personally liable. Prior to closing out the estate, family members should sign a settlement agreement wherein they accept the amounts received and approve of the estate expenses. If any family members disagree, then the estate will need to be resolved through an audit and adjudication and have the matter approved by the Judge. Again, if the executor does not follow the terms of the will, then the matter will not be approved.

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Planning for Settlement Negotiations: The Big Picture

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Source: Family Advocate, Vol. 37, No.3

Good negotiators, like good lawyers, are prepared. They know where they are going and how to get there. As any successful lawyer will tell you, superior preparation can often spell the difference between winning and losing the case, especially in hard-fought, complicated cases.

Download full article (PDF)

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