Tag Archive for: divorce

Discovering Assets and Income in Divorce

It is not uncommon for parties contemplating divorce to try to hide assets in an attempt to keep them out of the marital estate that will be up for distribution. One of the biggest red flags as far as potential hidden assets is if the spending habits or lifestyle of a party is way more than would be expected based on their reported income. You should also be wary of a party who owns their own business. If they deal in cash they can easily hide money. Additionally, what they report for tax purposes is not always indicative of income available for spousal or child support. It complex cases it may become necessary to hire an expert to analyze income flow. Top level executives may receive different forms of income. Examples include stock options, bonuses, car allowances, and deferred compensation plans. Even military members often have a compensation package that goes beyond their base salary.

Discovery is a good start in seeking to track down assets, hidden or otherwise. Tax returns and bank statements are good to review in terms of sources of income as well as where the income is going. A tax return can show rental income, interest on bank accounts, dividends on stock, etc. Bank statements can show any transfers of money and identify where it went to. Parties can subpoena documents directly from the custodian of the documents if the spouse will not cooperate and turn them over. If these initial avenues of discovery do not yield the desired results, a party will have to make a decision as to whether to invest more money in the chase for hidden assets. Any party that anticipates hiding or dissipating assets may become a problem during the pendency of the divorce should obtain a court injunction right away preventing the dissipation or transfer of any marital assets.

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Steps in Equitable Distribution

Equitable distribution is the term used in Pennsylvania as it relates to division of marital property in a divorce. Marital property will consist of nearly everything acquired in either party’s name from the date of marriage through the date of separation. Equitable distribution does not mean an automatic 50/50 split of all marital property. Instead, the statute on equitable distribution sets out thirteen (13) factors to be considered when seeking to set percentages for distribution on a case-by-case basis. In any divorce involving equitable distribution, the parties should first identify all the property to be considered. Specifically, Pennsylvania Rule of Civil Procedure 1920.33 discusses the requirement of each party filing an Inventory. The Inventory should list all marital assets and debts at issue. An Inventory must be filed prior to requesting a hearing on equitable distribution.

The second part of Rule 1920.33 goes over the requirements for a pre-hearing statement. This statement is to be prepared when your case is ready to go to court on equitable distribution (i.e. after you have grounds for divorce). Again, you will need to list all marital assets and debts, however, you should also include more detailed information regarding the assets and debts such as their values or balances at date of separation and present. Corroborating documentation should be attached to the pre-hearing statement as exhibits. Appraisals may be needed to confirm the fair market value of real property or defined benefit retirement plans such as pensions. Pre-hearing statements should be filed at least sixty (60) days prior to a scheduled equitable distribution hearing. It is important to work with an experienced family law attorney when dealing with equitable distribution matters to ensure all marital property is identified and subsequently submitted to the court in a timely fashion.

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Health Insurance in Divorce

One frequent question in the context of divorce is what will happen to health insurance coverage. Generally, a spouse should not drop the other spouse while a divorce is pending. Health insurance is often addressed in the context of support and spouses are obligated to provide support for each other during the marriage. A support order can mandate a spouse to continue to provide health insurance. The obligation to carry health insurance for the other spouse ends at the entry of the final divorce decree. If you are unable to obtain alternate health insurance on your own right away you can look into COBRA coverage but this can be very expensive. More affordable options may be available on the healthcare marketplace.

If there are children between the parties, the children may remain under the health insurance coverage presently provided. There may be an adjustment to any child support award based on who is paying the premiums on the health insurance for the children. Child support will end when the child is eighteen or graduates high school, whichever is later. After court-ordered child support ends there is no longer a requirement for the parents to share the cost of the child’s health insurance however a parent may elect to continue to provide coverage for the child up until the maximum age of 26. Parties with private agreements can contract to continue to share this cost.

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Steps to Take Post-Divorce

Receipt of the divorce decree does not necessarily mean nothing else needs to be done. In a case with a marital residence, the parties may still need to sell the house or one party may have a certain window for refinancing the property and buying the other party out. If you are a party retaining a marital residence by agreement or court order, you can change the locks once the property is formerly awarded to you. The party vacating the residence should be sure to change their address with the post office and update other accounts accordingly. In a case where retirement benefits are being split, the parties may need a qualified domestic relations order or QDRO for short.

A QDRO is a document used to rollover a portion of one party’s retirement plan/benefit to the other party. The benefit of a QDRO is that it allows a tax-free transfer of the funds from one party to their new or soon-to-be ex-spouse. The receiving spouse would then be taxed as they withdraw the money as the tax laws provide. The QDRO ultimately needs to be signed by both parties and the court prior to being sent to the plan administrator for implementation.

You will benefit from having an attorney review the terms of the QDRO before signing off on it and submitting it to the plan. If you have been paying support to your spouse, you should notify Domestic Relations if the support is ending or if it is converting to alimony. If switching to alimony, you should confirm the amount if there is any change from an existing charging order. You should also notify Domestic Relations of the term of the alimony.

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Reconciliation

Pennsylvania allows a no-fault divorce on the basis of one year separation period. Separation is defined in Section 3103 of the Divorce Code as follows: “Cessation of cohabitation, whether living in the same residence or not. In the event a complaint in divorce is filed and served, it shall be presumed that the parties commenced to live separate and apart not later than the date that the complaint was served.” 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. Any reconciliation between parties can negate a prior separation period. Specifically, if a party is pursuing a divorce on the grounds of separation, a reconciliation may result in a new date of separation date and hence a new one-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. For example, isolated instances of sexual relations during a separation will not alone establish a reconciliation. Additionally, residing in the same home does not alone establish reconciliation. The court would examine the facts in each case and evaluate whether or not there was a full-blown resumption of the marital relationship. In Britton v. Britton, 400 Pa. Super. 43 (1990) a reconciliation was recognized 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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Separation for Divorce

Separation is one of the no-fault grounds for divorce in Pennsylvania. A no-fault divorce simply means there has been an irretrievable breakdown of the marriage. Grounds for a divorce can be established if a one year separation period is established. One party would need to file an affidavit of separation setting forth the separation date. This affidavit is to be served on the other party along with a counter-affidavit. If no objection is made by the other party the date of separation as stated in the initial affidavit is accepted.

Separation does not mean the parties have to actually live separately from another. Many parties still reside in the same home but are considered to be “separate” based on the definition provided by the Divorce Code. Section 3103 of the Divorce Code defines “Separate and apart” as follows: Cessation of cohabitation, whether living in the same residence or not. In the event a complaint in divorce is filed and served, it shall be presumed that the parties commenced to live separate and apart not later than the date that the complaint was served.” Accordingly, the date the divorce complaint is filed will be accepted as the latest date of separation regardless of whether the parties continue to live together or not. However, the date of separation can be an even earlier date such as the date one party moves out of the marital home. Alternatively, even if the parties continue to reside together, a date of separation can be established when one party makes it clear to the other party that the marriage is over by stating so clearly or preferably putting it in writing. Be sure that the other party is keenly aware of your intended separation, especially if you will continue to reside together and/or hold off on filing for divorce.

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Custody and Domestic Violence

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Emotions run high in any child custody discussion.  When you are fighting with your soon-to-be-ex, in person or through your attorneys, that arguing adds extra pressure to the process.  When violence and abuse are already present in the relationship, there is added urgency along with a fear of you or your children being victimized.  

 

Whether you are negotiating parenting time and a custody schedule for the first time or you think an existing schedule should be reviewed, it is very important for you to tell your attorney about any abuse.  As divorce and family attorneys, we have helped many families through these situations.

First and foremost, if your spouse is abusing you and/or your children, it is critical that you get yourself to safety and follow the protocols of the Bucks and Montgomery County Protection from Abuse (PFA) procedures.

Next, an experienced attorney can help you unravel the tangle of domestic violence as it relates to your custody case.  To be clear, just because you say you are being abused does not mean the judge is going to grant you full custody or take away the other parent’s rights.  While protection and safety are of primary concern, there needs to be documented proof of abuse.  This is where an experienced attorney can help you.  

Documentation is a very important part of any abuse case and should include as much detail as you can by date.  Remember to not only include details about any physical abuse, but also emotional abuse as well.  You will need to find a safe place to store your documentation and sometimes the best place is out of your home and away from where your spouse may find it.  Sometimes your computer or phone can be safe.  We can help you put the right system in place.  Record incidents of physical abuse with a doctor (including pictures) and even with a therapist or social worker.  As you document, also make sure to tell at least one trusted confidant what is happening; this can be a friend or family member.  This level of documentation is critical so that you have a trail of proof should it ever be needed.  

As mentioned above, your safety is of utmost importance and stopping the abuse is the goal.  When your emotions run high, working through the legal process can seem tedious and a waste of time.  However, all custody issues in Montgomery and Bucks County, PA need to be resolved following a legal procedure and we can help you work through it quickly to obtain the best possible resolution.  

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How to Change Your Custody Agreement/Parenting Time

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If you have children and are getting divorced, you will negotiate a parenting time schedule, typically called a custody agreement. This dictates the amount of time that each child will spend with each parent. It can include overnights, holidays, and special arrangements like pick-ups and birthdays. If you are divorcing with younger children, your schedule will more than likely need to be adjusted in the future to accommodate different schedules.  If you have already been divorced for a few years, you may be concerned that your custody agreement is no longer working. After all, your schedule, as well as the activity schedules of your children, have probably changed over time.  


First, as you move through your year, you may find that certain dates in the schedule need to be adjusted.  For instance, you may need to attend a work event or a wedding on a weekend when you are scheduled to have your children.  If your ex is agreeable, a simple email, phone call or text can handle these one-time changes. Sometimes, in contentious post-divorce relationships, parents feel they need to get an attorney involved in every single change.  This can ensure that there is a formal agreement to the change, but is usually not necessary.  


For more substantial changes to your custody agreement, you will want to make sure that the new plan is fair and, most importantly, includes a consultation and/or review with an attorney.  For instance, if you are taking on more nights with your children, you may be entitled to additional child support.  With more permanent changes, you should file with the court.  A handshake (or email) agreement is not enforceable all the time.  


If you have a more serious circumstance to consider, it is essential that you have legal guidance through the process.  If your ex does not show up for scheduled time and your children are continually disappointed, homework is not completed when the children are in your ex’s care, your ex suffers from alcoholism or drug abuse or is incarcerated, then the circumstances may be extreme and legal guidance is imperative.


Lastly, you may want to change your custody agreement but your ex may be opposed to doing so.  You may be changing jobs or moving or you may realize that your child’s new schedule needs to be accommodated in a different way.  If you and your ex do not get along, then you might need lawyers, or even the court, to handle the change.  If both parties do not agree…this will need to be negotiated.  You must be able to demonstrate that it is in the best interest of the child to amend the parenting time agreement.  


Regardless of the changes you need to make, your parenting time schedule can usually be adjusted.  It is critical to find a lawyer who is experienced in Bucks and/or Montgomery County who can walk you through child custody issues and any other changes that should be considered.  

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Dealing with Emotions of Your Divorce

When you move through your divorce you may feel as if your entire life is being turned upside down.  This upheaval can lead to emotional fallout that appears overwhelming to handle.  If you do not want to get divorced this can be even harder to comprehend and start to manage.  When we work with clients, we help them move through the process and build a stronger life for themselves so they can easily walk into their post divorce life.   Putting the right supports in place for yourself will greatly help you manage all of the pieces and stress.


Get honest with yourself about what is happening.  Many individuals, even those who actually want their divorce, have problems accepting the reality of what is going on with their lives.  Usually this happens when one partner moves out, the kids start visiting their new homes, or a joint account is closed. It is very important that, at each and every step, you keep moving forward.  

 

Getting organized will help you feel as if you are in control of the process.  There is a lot of information to organize as you move through your final judgement for divorce and into your post-divorce life.  Clients who are organized have the best chance of staying ahead of the stress. Files or a binder can help as you start to collect documentation related to financials, housing, and even a list of important phone numbers to remember.

 

Putting a support system in place is an important next step.  When we partner with you and help you get divorced, we take care of each legal issue for you.  When you have experienced representation your stress level will be lower and feelings of being overwhelmed will lessen.  However, you will still need help sorting out and managing the myriad of emotions you may feel.  Explore the idea of seeing a counselor and also find a few close confidants – ideally those who have gone through a divorce, to help you when you need support.

 

Trust the process:  So many people start the divorce process scared they are going to wind up broke at the end of the process and with significantly less time seeing their children.  

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After Your Divorce, Make These Changes Immediately

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The process of getting divorced can be hard to move through.  When you are finally divorced you will probably want a break from making decisions and taking care of legal matters.  However, it is crucial to immediately update a few important areas of your life including your will, life insurance beneficiaries, and other estate planning documents.  

Your divorce agreement may include some estate planning language as it pertains to your children, including how life insurance beneficiaries must be maintained.  It is critical to not only follow these agreements, but to ensure that the other pieces of your estate are changed so your ex-spouse is removed and can no longer control your life or handle any of your affairs should something happen to you.  

Your Will

If your last will includes your former spouse, then you will need to update that information so your final arrangements, distribution of personal items, and your financial matters are handled according to your wishes.  Remove your former spouse as your executor and ensure that they are no longer the recipient of any of your personal property.  Additionally, should anything happen to you or your ex-spouse, you should name a guardian for your children.  

Beneficiaries on Financial Accounts


Beneficiaries on your life insurance policies as well as investment and bank accounts need to be changed according to the policies and procedures established by each institution.  Clearly stating your wishes in your will that you want your children to inherit your money is not enough.  Each company is going to have a different form that needs to be correctly filled out to properly change your beneficiaries.  If it is not done correctly the previous beneficiary stands, and your ex-spouse may wind up with a significant amount of money.  Click here to read more about changing your life insurance policies.

Other Estate Planning Docs

 

Power of Attorney documents should be updated.  In the event that you are rendered incapacitated, you want a trusted relative or friend to have the authority to make decisions for you.  This includes matters related to your health as well as your financial matters.  

When we work with clients we always work through these issues to ensure that your best interests are protected through your divorce and into your new adult life.  Taking the time to ensure your will is properly updated after your divorce will give you peace of mind as you will know your final wishes are clearly stated.  

Additional Resources: https://www.reviews.com/life-insurance/

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