Tag Archive for: divorce

Vanishing Credit

The court may give credit for individual property brought into the marriage depending on the circumstances. Generally, any credit to be received decreases with the length of the marriage. For example, Bucks County will reduce the credit by 5% a year such that there is no longer a credit after 20 years. A prime example of a situation where this rule would be applicable is the purchase of a marital home. Say Spouse A contributed $40,000 of their pre-marital money to the purchase of the house. If the parties separated after 5 years, the amount of Spouse A’s individual contribution is reduced by 25%. Accordingly, Spouse A would argue that 75% of the $40,000 down payment, or $30,000, is their separate property and not subject to equitable distribution in the divorce.

The rules on credit for individual or pre-marital property can vary county to county since it’s not a statute, but more or less a policy used by the respective Masters when looking at the marital estate in a divorce matter. Be careful with the commingling of individual property with marital property. It will be hard to make an argument on the amount of individual property that should be credited to a party if it’s hard to trace the source of the funds. If you encounter a situation in your divorce where it may be necessary to make a distinction between assets that are clearly marital versus those that you can trace back as being pre-marital and/or separate, you should be sure to consult with an attorney with experience in the valuation of these type of assets or risk all of the assets being addressed in equitable distribution and subject to division with your spouse.

Click here to read more on dividing marital property in divorce.

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Service Members Civil Relief Act

The Service Members Civil Relief Act (SCRA) was signed into law by President Bush in 2003. It was an overhaul of the SSCRA which had been law since 1940. The main purpose of the SCRA is to protect service members from civil lawsuits while they are on active duty and unable to adequately defend themselves. The protections of the SCRA, accordingly, apply to family law matters such as divorce, custody and support. Divorce complaints must either include a statement that neither party is a service member on active duty or be accompanied by an affidavit of non-military service. The service member has the right to waive their protection under the SCRA and still proceed if they desire to. Any waiver of rights under the SCRA must be in writing.

The SCRA provides for a mandatory stay of civil proceedings if the case does involve a service member in active duty. The stay period may be extended if necessary. An application for a stay should establish that the present active duty impairs the ability of the service member to appear and defend themselves in the civil action. The application should also indicate when the service member expects to be available to participate. A statement by the service member’s commanding officer needs to be provided corroborating the facts alleged by the service member in the application. An SCRA website is available where inquiries can be made into the active duty status of any individual.

Click here to read more on the impact of military obligations.

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Post-Divorce Issues

Finally receiving the divorce decree is an accomplishment for divorcing parties, however, it does not always mean the end of the matter. If custody and support were issues were raised as part of the divorce, even though an initial resolution may have been met, both are issues which can be revisited based on change of circumstances. Additionally, in either a court order on equitable distribution or a settlement agreement reached between the parties, there may be provisions which carry additional obligations to be fulfilled even after the divorce has concluded. Support and custody issues always carry a continuing obligation to either pay a certain amount per month or follow a certain custody schedule. There are also several scenarios when dealing with marital property that can create a continuing obligation.

For example, when a marital residence is being kept by one party, there will likely be a provision granting the party a certain number of days to refinance the property and buy the other party out for their share of the equity. If the refinance does occur, a deed will probably be needed to place the title into only one party’s name if not already done. If the refinance does not occur in that time frame, the alternative is usually to put the house up for sale and split the proceeds. If the parties cannot agree about selling the house, selecting a realtor, setting a price, etc., either party may seek assistance from the court. This would involve a Petition for Contempt and Enforcement of the court order or agreement. Most well-drafted agreements will include a provision that the party defaulting on their obligations will be the party responsible for any additional legal costs incurred to enforce the agreement.

Click here to read more on life after divorce.

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Disability Pension

Pensions are generally considered marital property and subject to distribution at the time of divorce. The pension may need to be appraised to determine the marital value of the pension, specifically in an instance where the party began accruing the benefits prior to the marriage or the parties were separated for numerous years before a divorce action was commenced. There are also retirement benefits that are excluded from equitable distribution. For example, under 23 Pa. C.S. 3501(a)(6), veterans’ benefits are excluded from equitable distribution.

Other disability benefits besides veterans’ benefits may also be excluded from equitable distribution. The key is to consider the purpose of the benefit and whether it is being used to compensate for lost income. In other words, if the purpose of the benefits is to provide earnings in lieu of what the recipient would’ve made were they still able to work, those benefits will not be subject to distribution. If, however, a portion of the benefit also includes standard retirement benefits, the portion representing retirement benefits will still be subject to distribution.

Click here to read more on division of marital property.

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Practical Steps in Preparing for Divorce

Many clients contemplating divorce have questions about what they should do even prior to filing for divorce to protect themselves. Below is a list of some proposed actions from personal finance company, Kiplinger’s.

Obtain a credit card in your own name if you don’t already have one.

Obtain a checking and savings account in your own name.

Withdraw half the money in joint accounts or change the signature authority so that both parties must sign to complete any transaction. (Beware that if you withdraw all the money in a joint account you may be ordered to give back a portion by the court down the road and accordingly, it is not wise to spend it.)

Collect all information accessible to you regarding your spouse’s bank accounts, retirement/pension plans, insurance policies, real estate interests, and any other financial assets.

Get copies of state and federal income tax returns for the past few years.

The purpose of these actions is to preserve your financial stability going forward by putting things into your own name. You are also ensuring that joint accounts will not be used or closed out by the other party without receiving your fair share. Ultimately, the court will determine what that fair share is at the time the divorce is finalized and that is why the money should not be spent pending the finalization of the divorce. Another tip for parties who are selling a marital home either prior to filing divorce or while the divorce is pending, is to hold the proceeds of the sale of the home in escrow. The share of the proceeds payable to each party would then be determined at the time of equitable distribution.

Click here to view the Kiplinger’s Article: Divorce and Your Money

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Fault Grounds for Divorce

Most divorces proceed on the basis of no-fault or irretrievable breakdown of the marriage based on mutual consent after ninety days or two year separation, however, fault grounds for divorce can still be utilized. Under 23 Pa CS 3301(a), the fault grounds for divorce are listed and include(1) desertion for the period of one or more years; (2) adultery; (3) cruel and barbarous treatment; (4) bigamy; (5) imprisonment for a term of two or more years; and (6) indignities to the point of life being intolerable and burdensome. The party alleging fault must prove its existence and must also establish they are the “innocent and injured spouse.” 

23 Pa CS 3301(b) discussing another ground for divorce infrequently used: institutionalization. This provision allows a divorce on the ground that insanity or serious mental disorder has resulted in the other spouse’s confinement in a mental institution for at least 18 months without reasonable prospect the spouse will be discharged. “A presumption that no prospect of discharge exists shall be established by a certificate of the superintendent of the institution to that effect and which includes a supporting statement of a treating physician.” There is often no benefit to pursuing fault grounds for divorce over no-fault grounds as fault is not a factor to be considered in equitable distribution (division of property). However, the laws of support do address fault grounds in two instances: as a defense to paying spousal support and as a bar to receiving alimony.

Click here to read more on fault grounds for divorce.

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Division of Military Benefits

A spouse is entitled to their share of the military pension no matter how insignificant. Under the 10 year rule, where the parties have been married for 10 years and the servicemember has accumulated 10 years of service, DFAS (Defense Finance and Accounting Services) can pay the spouse directly. When the 10 year rule has not been met the servicemember will be responsible to pay the spouse themselves. This, of course, makes it harder to enforce the distribution of the pension. A court can only award a division of a military pension if it has jurisdiction over the servicemember via residence, domicile or consent. Only disposable retired pay can be divided. This is the total monthly pay less certain deductions. The highest percentage a spouse can receive of the military retired pay is 50%. The spouse will stop receiving military pay when the service-member dies.

In order to continue to receive benefits after the death of the servicemember, a Survivor Benefit Plan (SBP) must be in place. The plan is available if both parties elect it and pay the required premium. It will allow the spouse to continue to receive retired pay post-death of the servicemember. The surviving spouse is entitled to 55% of the retired pay received by the retiree. To ensure the spouse receives the SBP as a former spouse, you must complete a deemed election specifying that the spouse will be named as a former spouse under the SBP within one year of the dissolution of the marriage.

Click here to read more on Military Divorce.

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Exclusive Possession of Marital Residence

Pursuant to 23 Pa. C.S. § 3502(c), the court has the express authority to award exclusive possession of the marital residence to one or both parties during the pendency of the divorce. This provision was added to the law in 1990. Prior to that, the court had determined it had the authority to grant exclusive possession of the marital residence under the “full equity power and jurisdiction of the court” found at 23 Pa. C.S. §3323(f). This provision gives the court the authority to issue injunctions or other orders necessary to protect the interests of the parties. Laczkowski v. Laczkowski, decided in 1985, was the first case to hold that the court could award exclusive possession of the martial residence during a divorce. 344 Pa. Super. 154 (Pa. Super. 1985). In Laczkowski, the home was to be given to the spouse having physical custody of any minor children.

Other cases have clarified and expanded the instances under which exclusive possession may be ordered. In Uhler v. Uhler, the court indicated exclusive possession should only be awarded sparingly. 428 Pa. Super. 630 (Pa. Super. 1993). Uhler also pointed to the emotional welfare of children as the most important consideration. In Vuocolo v. Vuocolo, the court held an award should be based not only on the needs of minor children, but also the age and health of the parties and their financial needs and resources. 42 Pa. D. & C. 398 (1987). In Merola v. Merola, the court granted exclusive possession in an instance where there were no minor children but the wife was vulnerable and confined to a wheelchair. 19 Pa. D. & C. 4th 538 (1993). In contrast, in Duzgon v. Duzgon, the court did not grant exclusive possession based on wife’s allegations of tension in the home because of husband’s phone calls to his girlfriend. 76 Pa. D. & C. 4th 538 (2005). The court’s rationale was that there was no abuse between the parties and hence no clear need for husband to be excluded from the home. In sum, an award of exclusive possession is a harsh remedy that will not be awarded without clear need and is more likely to be awarded where minor children are involved.

Click here to read more on division of marital property.

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Court Conciliation and Evaluation Service

The Court Conciliation and Evaluation Service, or CCES for short, is a program in Bucks County that conducts custody evaluations for pending court cases. Parties to a custody matter would participate in a series of sessions with an assigned evaluator. The goal of the program is to facilitate an ideal co-parenting relationship that provides for the best interests of the child(ren) involved. The end result of the program is either an agreement on custody or a full clinical report including a recommendation which is then provided to the court. In addition to the parents and the children, additional parties can be interviewed as part of the CCES process based on their role in the parties’ lives or unique insight they may be able to provide. On average, it takes 6-8 weeks for the process to be completed with the report due to the court within 45 days of the final session. An expedited evaluation which is completed in a matter of days is possible only in emergency situations or when one or both of the parties live out-of-state.

As far as procedure, parties are generally referred to CCES following the initial custody conference if the parties are agreeable; otherwise, the parties may be ordered to participate following a hearing. A referral form is completed which includes contact information for both parties as well as case information. This form is submitted to CCES. Both parties are responsible to submit an application fee directly to CCES prior to the start of the sessions. Parties are each responsible for the fee for the evaluation at the first meeting with the evaluator. Parties should also bring any documents they want the evaluator to review to the first meeting. The CCES report is a confidential document and cannot be dispersed directly to the clients based on the sensitive information it contains. Represented parties can view the report at their attorney’s office. Unrepresented parties can make arrangements to view the report at the custody master’s office. A custody hearing can be requested after the report is received instances where an agreement could not be reached during the process.

Click here to read more about CCES.

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Alimony Pendente Lite

Alimony Pendente Lite, or APL, is spousal support while the divorce is pending. A party may petition for APL at the same time as the divorce complaint or any time thereafter prior to the entry of a final decree. The purpose of APL is to ensure each party has the ability to sustain themselves during the divorce. A party seeking APL should be ready to prove they lack sufficient property to provide for their reasonable means and are financially unable to support themself during the pendency of the divorce litigation. It is the income-dependent spouse who would have the opportunity to receive APL.

Pennsylvania Rule of Civil Procedure (Pa. R.C.P.) 1910.16-1(c) addresses awards for spousal support and/or APL and requires the court to also consider the duration of the marriage in making any award. This is to ensure one party does not benefit from a significant support award in the context of a very short marriage. Additionally, it provides that an award for spousal support and an award for APL cannot be in effect at the same time.

Pa. R.C.P. 1910.1-4 lays out the calculation to be used in determining an award. In a case with children, the APL award will be based on a 30% difference of the parties’ net incomes and will account for the child support obligations of the case when factoring the net incomes. In a case without children, the APL award will be based on a 40% difference of the parties’ net incomes. An award of APL is not appealable until after the divorce is final. The reason for that being that APL is not considered a “final order” as is required before an appeal can be taken.

Click here to read more on APL.

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