Tag Archive for: property division

Checklist to Include in a Divorce Agreement

If you are drafting a Property Settlement Agreement for divorce or having one drafted for you, consider including the following topics in your agreement:

1. House/other real estate: Be sure you indicate who will get to keep the house, when the deed gets transferred into their name, who is going to prepare the deed, who will pay any fees associated with the recording and transferring of the deed. In addition, be sure to indicate when the mortgage, home equity loan or any other debts against the house will be refinanced into the name of the spouse keeping the house and what happens if they cannot refinance. Will the house be sold? If so, who keeps the proceeds? Indicate what percentage of the proceeds the other spouse is getting in the refinance or sale or the set price. If the house has to be sold, who is going to pay for repairs? Who will maintain the expense of the home until it sells? You may have a host of other issues if the house sells such as the selling price, terms, etc.

2. Retirement Accounts/IRAs/Pensions: If you have retirement accounts, be sure to cover the percentage of the account the other party is receiving, if any, or the set amount in dollars and how it is to be calculated. Will you need a QDRO to provide for a tax fee transfer and if so, who will pay the cost to have it prepared? Certified by the Court? Is there a beneficiary or survivor benefit? If so, is the spouse going to be named or given a percentage and is there a value to this?

3. Savings Accounts, checking accounts: Have you closed all joint accounts? Have all accounts been fully disclosed? Who is going to keep what funds? Any credits due to the other?

4. Business: If one of the parties has a business, has it be valued? Who is paying for the valuation? If it is not valued, do you agree on the worth or understand you could have had it appraised?

5. Other Assets: Have all assets been addressed? There could be rewards dollars, airline mileage rewards, timeshares, stocks, bonds, investment accounts, stock options, etc. Be sure you cover every possible asset and who is keeping what asset.

6. Taxes: If taxes are being filed jointly, how will the refund or money owed be divided? Who is going to claim the children in future years? If any taxes are owed as a result of any distribution of assets, who is going to pay the taxes?

7. Debts: What debts of the marriage exist whether in joint or individual names, and who is paying what? What happens if one party files bankruptcy on a joint debt?

8. Alimony, APL, Spousal Support: Is it being paid and if so for how long and how much and to whom? Under what circumstances may it terminate early? Is it being waived?

9.Full Disclosure: Has there been a full and final disclosure of all marital assets? What happens if an asset is discovered after the agreement?

10. Future Breach of an Agreement: What happens in the future if one party breaches the terms of the agreement? Will attorney fees and costs be paid by the other side? Will you go to arbitration?

11. Custody and Child Support: Both custody and child support do not need to be in your property settlement agreement in order to get a divorce as they are separate remedies. Any provision in your agreement regarding support or custody will be modifiable. Since schools require a copy of your custody order, it really should be set forth in a separate document.

These are by no means all the points you should cover in your agreement, but these are essential. You may want to consult with an attorney to assist you in this process.

For additional information see:/Family-Law-Divorce/Division-of-Marital-Property/

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Theories on Property Division

There are two different theories on how title to property may affect the division of the property at the time of divorce. The title theory looks at which spouse holds title to each asset. There are multiple forms of title. Sole title grants the unilateral power to control. Examples of assets that may be relevant in divorce that are solely titled include retirement accounts, individual bank accounts, and vehicles. The remaining forms of title often apply to real property. Tenancy in common is the co-possession of an entire asset where each party has a ½ interest. Joint tenancy with right of survivorship is also co-possession of an entire asset with the condition that the surviving party will receive sole possession upon death of the other party. Each party can potentially transfer their interest during their lifetime. Finally, tenancy by entireties is similar to joint tenancy with right of survivorship but can only exist between spouses and any transfer of the interest can only occur with consent of the other spouse. Most states prefer the title theory. Equitable distribution is the method for property division under this theory.

The other theory in property division is community property. Under this theory each spouse has a present, vested ½ interest in all property acquired during the marriage. This results in an equal distribution of the property and is the minority view. Regardless of the theory utilized, the process of dividing property involves three steps. First, all the assets must be identified and classified as either marital or separate. There is a presumption that if the asset was acquired during the marriage it is marital. Second, each marital asset should be valued. Finally, all assets should be distributed either equitably or equally, depending on the property division theory being utilized. Both Pennsylvania and New Jersey divide property by method of equitable distribution.

Click here to read more on equitable distribution.

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Things to consider when selling your house during a divorce

When you sell your house during a divorce there are certain things that you should consider regarding equitable distribution:

1. Make sure that the house does not appear empty by removing the furniture. If buyers are aware you are going through a divorce, they may try to offer you less than your house is really worth. If possible, leave the furniture and photos on the walls. You can do a stipulation with your spouse on who gets what when you do sell and if you are not going to be living in the house you may want to get that done before you leave.

2. You may not agree with your spouse on the listing price or realtor. It is best to communicate with your spouse rather than have the court make these decisions for you. If you cannot agree on a realtor, one option the court likes is to submit three names to the court each and they will decide or you could do this between attorneys or a mediator. If you cannot agree on a listing price, you may want to defer to the realtor. You also may want to build in an agreement on dropping the price after a certain time has passed and how much you agree to drop it.

3. Keep receipts for repairs and always exchange estimates. If you make repairs to your house and you are getting divorced, you want to be sure to get credit for the repairs and reimbursed from the proceeds of the sale of the house. In order to do this, you need to make sure the repairs are necessary and agreed to before you pay for them. A good idea would be for each spouse to get estimates and agree in advance before the work is done as to what is getting reimbursed.

4. You may have an uncooperative spouse who refuses to market the house or make it available. Remember in a divorce that the Court can control and enforce the sale of the house and remedies against an uncooperative spouse could include giving Power of Attorney to one side only to control the sale, or even in some cases, eviction from the house of an uncooperative spouse.

5. You need to consider who will pay the mortgage, expenses and taxes while the house is up for sale. If the house is occupied, normally, the spouse who remains in the house is responsible for everything and this is not something reimbursed. If the house is unoccupied, these expenses can be imposed on both parties and you will want to keep receipts for everything to seek a credit in equitable distribution.

6. Make sure you have an agreement in place on disbursement of the proceeds when the sale is completed.

7. Remember if you work together with your spouse it will benefit both of you in getting the highest dollar value for your home and save you unnecessary legal fees.

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Reasons to consider a Prenuptial Agreement

If you are getting married, you may want to consider a prenuptial agreement before you tie the knot.  A prenuptial agreement is not necessary in every situation, but is very useful to avoid conflict in certain situations.  It is not always just for divorce.  You may want to use it to allow you to decide how your assets will be distributed in the event of death rather than have your spouse be entitled to their elective share.  

A prenuptial agreement allows you to predetermine in the even of death or divorce how some or all of your assets will be distributed.  In the case of death, you will also need a will.  Some situations where it is very useful to have a prenuptial agreement are when you have children from a prior relationship, a closely held business, or assets accumulated prior to the marriage.   Even if none of those apply, you can still use it to help you save the expense of protracted litigation in the event of a divorce.

For more information on prenuptial agreements, please click here:/Family-Law-Divorce/Prenuptial-Agreements/

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Laws Affecting Un-Married Couples

Many courts will recognize legal property and/or support rights arising from cohabitation of non-married parties. Palimony refers to the support obligation that may arise following the end of the relationship. NJ previously recognized palimony claims however a recent change to the law has made it more difficult to obtain by requiring a written agreement on support between the parties. This new statute did not result in the end of all palimony type claims however. Just a few months ago, in Joiner-Orman v. Orman, the court allowed a palimony award for Wife. The relationship lasted 39 years and Wife stayed home to raise the parties’ 4 children. The court relied on the doctrine of full performance to justify the palimony award in that Wife had fulfilled her end of the bargain as a homemaker and full-time Mom and so allowing Husband to leave the relationship without paying support would be unfair. The Orman case is not precedential as it is only a trial court decision and unreported.

Pennsylvania may also recognize some rights between unmarried couples as a matter of equity. Generally title controls ownership in the case of unmarried couples however there are exceptions to the general rule including unjust enrichment and quantum meruit. Unjust enrichment is the theory that it is unfair to allow the person that does not have title to be excluded from wealth they helped create. Quantum meruit is a Latin phrase meaning what one has earned. In this context, the court must consider whether the conduct of the parties evidences an agreement and/or expectation of some form of compensation for performance. Quantum meruit requires a contract or agreement, tacit or otherwise, whereas unjust enrichment does not and is just about the courts doing what is fair. The best way to avoid a legal battle if things go awry in any relationship is to have all agreements clearly stated and reduced to writing.

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