Tag Archive for: divorce

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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When You Get Divorced…Actually Get Divorced

Many couples who have financial problems feel like they should still co-own assets after divorce. Maybe you are upside down on the mortgage on your home and you would lose money selling it.  Perhaps you have debt you still want to co-own or can not split for some reason.  Perhaps one of you wants out of the house but there is not enough cash to be bought out.

 

The problem with co-owning anything after your divorce is that you will no longer be married and co-ownership without that legal protection of marriage can be scary.  A good divorce attorney can help you brainstorm ways to ensure that your assets and debts are split in such a way that you each take your fair share and, most importantly, become financially independent of one another.  

 

You can learn a few things from this story:  A couple divorced after 15 years of marriage.  Upon the divorce they continued to co-own the marital home, an investment property, and a HELOC against the marital home.  With this much joint ownership after a divorce, there were bound to be problems.  


  1. They maintained the marital home and nested their children.  Each parent moved in and out according to their parenting agreement. They did this for the emotional security of their children.  However they didn’t have money to maintain the house and it fell into disrepair over the years, to the point that it could not be sold for market value.  


Lesson learned:  While nesting may seem like a great idea, it requires substantial financial resources to maintain the home for the children, particularly when neither of you are really still invested in the home.  Additionally each parent also needs a place to live when they are not with the children so you need the cash to maintain three homes.  


  1. The investment property was the primary responsibility of the ex-husband and after some time he tired of it.  He decided to sell it, forgetting it was in joint ownership.  Additionally he sold it “short sale” forgetting that the down payment was in the Heloc against the marital home.  Once it was sold he had a legal quagmire on his hands in violation of the divorce agreement and now there was no asset and yet a substantial debt to pay.  


Lesson learned:  After your divorce it is best not to jointly own any investment or debt. As former partners, it can be hard to reach an agreement on what should be done and one partner may feel they have more right to control or make decisions.  


3)  The ex-husband unexpectedly died. The HELOC was only in his name and his estate immediately went bankrupt.  Typically, debts are forgiven but since the house was securing the HELOC, the ex-wife had to start making the monthly payments or face a lien.  Furthermore, because the HELOC account was only in the ex-husband’s name, the ex-wife had no access to the account and the bank would not discuss any particulars of the loan with her.


Lesson learned:  If there is joint debt coming out of your divorce it is best to split that debt in some way and move on independently.  If you must co-own anything, ensure that, in your divorce agreement, you mandate life insurance be maintained specifically for the repayment of debt.


Divorce is not easy and many times finances are a factor in your reason to split. There is always a way around a difficult situation and we can help you creatively solve your financial issues so you can independently walk into your post divorce life.

 

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Discussing Your Home During Divorce

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If you are overwhelmed with the divorce process it is important to take a step back and get organized.  One of the most overwhelming aspects of divorce is related to getting your financial documents gathered and assessed.  For our clients in Bucks and Montgomery Counties here in PA, we know how stressful this can be, especially when it comes to your home.

 

What will happen to your home when you get divorced?  For most couples the marital home is one of the largest assets in their financial portfolio.  Typically there is a mortgage attached to the home and equity that needs to be evaluated.  One party may want to keep the home, but doing so can cause financial issues.


The best way to answer the question of “What should we do with the house in our divorce?” is to first take a look at the following:  


  1. The most recent appraisal of the marital home or fair market value. This is an important first step in determining what the house is worth in today’s market.  We recommend checking out comparable homes in your area that are on the market and that have recently sold.  Additionally, you will want to talk to a local realtor for current market conditions and determine if it is a seller’s market.    


  1. Your current mortgage statement and home equity line of credit statements.  With the appraisal and the debt owed, we can determine the equity you have in your house and come up with a plan to divide that equity or have one spouse buy the other out of the house.  If you have a home equity line of credit that will reduce your overall equity in the house and, when sold, will be paid off first from any proceeds.  


  1. Detailed information on who owned the home at the time of marriage.  If one spouse owned the home before you were married, then their initial investment of a down payment and some appreciation may not be subject to distribution. We can only divide appreciation that was earned during the course of the marriage.  Additionally, if one of you owned the house and the other paid for improvements or paid down the mortgage, then those factors would also need to be discussed.


  2. Copy of the deed.  It is very important to have a clear picture of who has legal rights to your home.  One or both of you may be on the deed and the distinction is important for many reasons we can discuss.  Additionally, if one of you wants to buy the other out of the house then the deed may need to be changed.  


When we work with clients like you we explain each step of the process and look for every opportunity to ease your stress.  Your current housing situation and how you want to start your post-divorce life are guiding factors in our work as we negotiate on your behalf.  Getting all of your financial documents organized will make this easier for you to understand and also considerably reduce your legal bills.  

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September Newsletter

We love this time of year as the weather is enjoyable and more time can be spent outside.  We have had some glorious weather here in PA, even as the summer has come to a close.  With your very busy lives we want to provide you with some great information on saving money and having fun at this time of year!

 

Saving Money When Getting Divorced

Many couples fear the divorce process because they do not want to pay high legal fees.  Household budgets are already stretched and the thought of paying legal bills makes many feel they can not afford to get divorced.  In our new blog “Are You Too Broke To Get Divorced?” we discuss this issue and offer great tips to cut down on legal fees. /blog/2017/09/are-you-too-broke-to-get-divorced/


Fall for Single Parents

As a single parent you may feel as if there is just never enough time in a day to get everything done.  Being Mom or Dad while juggling schedules and your career can be overwhelming.  Sometimes you just want to spend a few stress-free and unscheduled minutes with your child and need a great idea. Here is a great list – over 100! – of activities to do with your kids: https://www.thespruce.com/absolutely-free-activities-for-kids-2997490

 

Student Loan Debt

Dividing assets and debts is a significant part of the financial negotiations of your divorce. Student loan debt, acquired during the marriage, is subject to distribution. However, rather than divide it equally, the court may choose that the spouse who earned the degree take more of the debt.  How you negotiate all debt in your divorce depends on your individual financial situation.

 


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Your Teen and Your Divorce

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All children process divorce differently and your teen will be no different.  They may be relieved if you and your spouse were constantly fighting or unhappy that mom and dad are no longer together.  They may experience a variety of emotions that they are unsure how to handle.  

 

What should you watch out for when raising a teenager and navigating through your divorce?

Regardless of their feelings about your split, it will be important for you to keep a close eye out for the following:

  1. Don’t let them play off of mom and dad:  “Dad said I could do this,” “Mom said you should buy me new sneakers.”  “Mom said that she will pay half if you pay the other.”  Whatever the case may, be do not allow your child to tell you what the other parent is going to do.  Check in with each other.  

  2. Create stability for your children:  Children of all ages need to know their schedules, how things are changing, and that they have two homes with parents who love them.  If you are all going to move then make sure they understand how they will see the other parent, attend school, and see their friends.

  3. Watch carefully and put support around them:  Your children are going through a substantial transition and need many forms of support.  Make sure that their guidance counselors are aware of your divorce so they can talk with the children and recommend a therapist as necessary.

  4. Realize boys and girls are going to process your divorce differently.  If you have a teenage daughter and son make sure you address their concerns and realize that they may have completely different fears causing anxiety.

  5. Don’t badmouth your ex:  Your children have the right to be loved and supported by both parents throughout their childhood.  The divorce is going to be difficult enough, so make sure you do not say bad things about the other parent.

  6. Promote bonds with both parents:  continuing on from #5 – your teen needs both a mom and a dad so encourage him/her to enjoy their time with the other parent.

  7. Listen to complaints but be firm:  Your child may not like the fact that he/she needs to now move between two homes, live under two different sets of rules, and “go see mom who lives too far away from my friends.”  Listen to their frustrations, acknowledge their feelings, but be the adult as they adjust to their new normal.

  8. Help them manage their emotions:  Your teens are going to have to process a significant number of emotions including shock, anger, sadness and even embarrassment – and sometimes all at once.  Make sure they know you are available to listen.

  9. It isn’t their fault – so many children feel that their parents could have been happier if they had been a better child – maybe not gotten in so much trouble, earned better grades, or not have needed so much “stuff.”  If your marriage was going to last it could have survived all of that – and your child needs to hear that from you.

 

When a teen goes through a divorce, communication is the key.  They need to know they can come to you when problems arise but they are going to need to also understand that the parents are in charge.

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Assisted Reproduction

Assisted reproduction refers to a number of procedures that may be utilized to achieve pregnancy including fertility treatments, in vitro fertilization and surrogacy. In vitro fertilization entails removing a woman’s eggs from her body and implanting the eggs with sperm to create an embryo. Those embryos can be stored until ready for use. However, couples should be aware of what happens to the embryos if they subsequently separate prior to using them. In Pennsylvania, frozen embryos are considered marital property and hence, subject to division in a divorce. The Pennsylvania Superior Court stated its position on the marital status of frozen pre-embryos in Reber v. Reiss, 2012 PA Super 86. In Reber, Wife wanted to use the frozen pre-embryos in order to have children of her own whereas Husband wanted the frozen pre-embryos either destroyed or donated for research.

Prior to reaching its decision, the Pennsylvania Superior Court considered how other states have dealt with this issue. Some states have focused on whether there is a prior agreement between the parties concerning disposition of the pre-embyros in the event of divorce and if so, will uphold the agreement as enforceable. Other states have held the enforcing such an agreement is a violation of public policy and have declined to do so. Another approach is a mutual consent model requiring both parties to agree on disposition, however, Pennsylvania did not find this model feasible since parties would not be in court in the first place if they could agree. The approach that was ultimately adopted in PA calls for the court to balance the interests of the parties.


In Reber, the court found that Wife’s interest in procreation using the frozen pre-embyros outweighed Husband’s interest against procreation since evidence established that the pre-embryos were likely Wife’s only opportunity to procreate along with testimony that Wife would allow Husband to be involved and wouldn’t pursue support in response to the concerns raised by Husband. The court did acknowledge that the party against procreation should normally prevail in a balancing test, however, due to the unique facts of the case, the scales tipped in Wife’s favor. It also seems that the court would’ve likely enforced an agreement on the issue if there had been one. Accordingly, parties who intend to undergo in vitro fertilization should draft a clear, unambiguous agreement as to the disposition of embryos upon separation, divorce or death, or else be subject to a balancing approach by the court.

Click here to read more about division of marital property.

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Social Security Retirement

Social security retirement benefits are payable based on the individual’s earnings history as well as age of retirement. Full retirement age is presently 66 years old. The benefit is reduced if electing to receive the benefit earlier. The minimum age to start collecting is presently 62 years old. An individual can elect to receive benefits under the spouse’s earnings history instead. An individual may receive up to 50% of their spouse’s benefit. This does not impact the spouse’s benefit in any way. An individual may elect to receive under their spouse’s benefit if their earnings history was substantially higher.

Even after divorce it may be possible to collect under your prior spouse’s earnings history. There are a few conditions that must be met. First, you must have been married for a minimum of ten (10) years. Second, you must not have remarried. Third, you must be at least 62 years old. Finally, the amount you will receive under your ex-spouse’s earnings history must be more than what you would receive based on your own work history. Electing to receive under your ex-spouse’s history will not affect any new spouse. Retirement benefits may also be payable to your children until they are 18 or graduate high school, whichever is later.

Click here to read more about divorce after 50.

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Steps for Simple, Uncontested Divorce

The procedures outlined below are suitable for an amicable divorce where there are no ancillary issues such as equitable distribution, custody or support. First, a Complaint in Divorce must be filed with the court. This may be your local county court or another county courthouse within the Commonwealth provided you consent to their jurisdiction. The difference in filing fees is a reason why you may look into filing outside of your county. Second, the Complaint in Divorce needs to be served on the opposing party. This can be done informally by having the other party execute an Acceptance of Service. Other options include service via certified mail, return receipt requested, restricted delivery or personal service by a process server of the Sheriff’s office.

Third, you must establish grounds for the divorce. For a no-fault divorce this would be either mutual consent of the parties after ninety (90) days or one or more year(s) of separation. If pursuing mutual consent, both parties would need to sign an Affidavit of Consent as well as Waiver of Notice for the divorce. If doing a divorce on the basis of separation, one party would file an Affidavit of Separation with the court and then serve it on the other party with a counter-affidavit to make sure they don’t object to the date of separation. The final step is filing a Praecipe to Transmit for Divorce Decree. This motion details all the prior steps for a divorce have been properly completed and includes the actual form of decree for the court’s signature if the motion is satisfactory.

Click here to read more about divorce.

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Veterans Benefits in Divorce

Former military members may be eligible to receive a number of different veterans benefits from the Department of Veterans Affairs (VA). Possible benefits include disability compensation, pension benefits, life insurance, educational benefits and more. Veterans benefits cannot be divided as an asset in a divorce case. This is due to the Uniformed Services Former Spouses’ Protection Act (USFSPA). The Pennsylvania Divorce Code confirms this rule. Under 23 Pa. Section 3501(a), discussing the definitions for marital benefits, veterans benefits exempt from attachment, levy or seizure are defined as non-marital.

VA disability payments are non-marital as are any military disability retirement payments. When discussing which benefits should be classified as non-marital, the statute goes on to draw a distinction as it relates to benefits received in lieu of military retired pay. Specifically, veterans benefits may be considered marital to the extent that a service member has waived military retired pay to receive the veteran benefit. This is because military retired pay is subject to distribution as a marital asset so any benefit received in exchange for their retired pay should be treated the same way. Veterans should also be aware that disability payments can be considered as income for an alimony award.

Click here to read more about military divorce.

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Preparing for Equitable Distribution

Equitable distribution is the term used in Pennsylvania referring to division of marital property at the time of divorce. Marital property will consist of nearly everything acquired in either party’s name from the date of marriage through to the date of separation. Equitable distribution does not necessarily mean a 50/50 split of all marital property. Instead, the statute on equitable distribution sets out 13 factors to be considered. In any divorce involving equitable distribution, the parties are tasked with identifying 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. Further, if you are served an Inventory first, you have twenty (20) days to file your own Inventory. In this regard, it is certainly helpful to have some understanding of what you and your spouse have prior to filing for divorce. You can supplement the list of marital property if you do not have knowledge of all the assets and debts at the outset.

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. Again, you will list all marital assets and debts. However, by this stage in the divorce you should have gathered all the information you need and be able to provide more detail regarding the assets, debts and their values or balances. Corroborating documentation should be attached to the pre-hearing statement as exhibits. Pre-hearing statements should be filed at least sixty (60) days prior to a scheduled equitable distribution hearing. The court does have the ability to impose sanctions for failure to file these forms as directed by the rules. 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.

Click here to read more about divorce.

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