Category: Property Division
Equitable Distribution in Pennsylvania
In Pennsylvania, the term "equitable distribution" is the legal term for the process of dividing the marital assets and marital debts. Marital assets include property acquired during the marriage even if it was acquired in only one spouse’s name as long as it was acquired during the marriage. Under Pennsylvania equitable distribution laws, courts consider a variety of factors which include: the length of the marriage, whether either party had previously been married; whether either party has significant non-marital assets, the age, health, and income of the parties; whether either party contributed to the increased earning potential of the other; the standard of living of the parties during the marriage and whether either party will be serving as the custodian of any minor children.
Helpful Tips and Facts
Convert Your Domestic Partnership to a Civil Union
Same sex couples who entered into domestic partnership should consider converting to a civil union. This status offers more of the protections of a marriage should the relationship sour and you seek dissolution of the partnership. For instance, in a domestic partnership only joint debts (those in the name of both parties acquired during the partnership) can be the subject of equitable distribution. Although in fairness a court may consider other debts, the domestic partnership statute does not address it.
Donít mix non-marital property with marital property
In a Florida divorce, marital property is typically divided 50/50. Any expert Florida divorce lawyer will warn you not to mix non-marital and marital property. For example, if you own a house in your name before the marriage, by placing the home in joint names as a result of refinancing or for some other reason, you make it marital property. The result of that is that you will only get half of it and not all of it if your marriage dissolves.
Protecting your claim on real estate - during your divorce
Sometimes a marital property will only have one person’s name on the deed. This may be because of the original financing requirements, an inheritance, or a past effort to protect assets. If this is the case you must take steps to protect the property during your divorce. Otherwise your spouse could deed the property away in an effort to protect it from possible division at the end of the divorce. The easiest way to protect property is to file a Lis Pendens in the local Clerk of Court office. A Lis Pendens gives warning to the public that the property is at issue in a pending lawsuit. Once a Lis Pendens is filed your spouse will have difficulty transferring the property. And if the property is then transferred, a Lis Pendens will assist you in getting the property back.
Re-title joint assets and accounts
Re-title joint assets and accounts such as credit cards, bank accounts, memberships: Everything in life that you did together must come undone. Create the list of all joint items such as credit cards, bank accounts, gym memberships, etcetera, and either re-title those accounts to individual name or close the accounts. Some accounts may not allow for re-titling. The institution may tell you that you must reapply for a single account. This is especially true for any account where credit is involved. Banks and investment institutions will often require new paperwork and new account numbers for account changes so that there is a paper trail associated with the movement of assets. While these items may be tedious, they are important to the safety of your money and assets, which are not truly secure until they are in your name alone.
The following questions should be addressed when selling marital property.
When? Asking Price? Sale price (minimum acceptable)? What if the property does not sell? How to resolve disagreement on selling price? How to handle the sale (broker selection, fix-up costs)? Living arrangements until the sale? How will the sale proceeds be divided? Use of moneys for payment of future obligations(e.g. taxes, childrenís education). Use of proceeds for debt paydown?
Throw Back Items in Negotiation
When in a 4 way or even a three way with a mediator, there is a tendency to let go of some items that you know the spouse will want that you do not. Keep this to yourself. You may end up with little to counter with if there are items that you specifically want but are held up because the spouse also "wants" that item. It is a difficult balance but keep in mind some things that you can "throw back" to help swing things your direction and arrive a more equitable balance.
Coin Flip Provision For Dividing Property
It is insane to spend money on fighting about who gets what. There are some things that should naturally go to one spouse instead of the other and you both know it so donít fight about it. Go through the house together and identity who wants what. For everything that you canít agree on, flip a coin. If it comes up heads, the person who is older goes first, tails the younger person goes first. They will pick the thing they want the MOST and then it is the other personís turn, going back and forth until all items have been chosen.
Division of Social Security Upon Divorce
The Social Security payments of couples who have been married ten or more years at the time of divorce are subject to distribution. The lower earning spouse is eligible for half of the higher earning spouse’s benefits.The Social Security Administration provides guidance in the calculation of benefits distributed to divorced couples.
The Date of Separation
Jurisdictions define the DOS in different ways. In some states, the DOS is the date one spouses tells the other of divorce plans. In others it is the date of departure. In any case, however, at some point a definite and permanent separation date must be established.
Settling the Division of Personal Property Upon Divorce
All personalty should be divided by the spouses. Personalty is "stuff," as George Carlin puts it. Even expensive goods lose most of their value the moment you walk out of the store with them. In a property settlement, a party should always remember how rapidly even an expensive new automobile depreciates.
Investing in Spouse’s Career
Most couples still invest more in the husband’s career while the wife’s job takes second place. A traditional married couple’s lifestyle is usually based on the husband’s income, and his career needs come first. These givens about the marriage must be considered when it comes to dividing the marital property.
A Null Marriage
A degree of nullity means that a man and woman were never husband and wife. This means there was no marriage and, more important, no marital estate and no distribution of property that would have happened had a valid and legal marriage been ended.
Hidden Assets
Very often in a divorce, one spouse attempts to hide marital assets. Assets that are hidden can often be discovered, but the hiding involves some form of misrepresentation and bad faith.
The Owner of Record
When property is transferred, the deed is normally recorded in the county courthouse as soon as possible. Deeds are time-stamped, then recorded in ledgers, and ownership of real property is a matter of public record. Recording a deed makes the new owner the owner of record. In a divorce, the parties must make certain real property is properly transferred.
Family Business and Divorce
In a divorce, a family business can be most problematic. Many family businesses can simultaneously be separate property (when, for example, one spouse started it before the marriage) and marital property subject to distribution (when both spouses worked together and made it grow). And even this ignores the difficulty of putting a fair value on the enterprise because goodwill must be calculated.
Separate Property
In most states, separate property is everything a person brought to the marriage. Gifts and inheritances are also separate property.
Divorce, Property and Gifts
In general, separate property includes what a person brought to the marriage, inherited during the marriage and received as a gift during the marriage. In most states, it is property kept in one name or when received as a gift or inheritance. Marital property is everything else acquired during the marriage regardless of whose name is on it. In most jurisdictions, that symbol of hope and dreams -- the wife’s engagement ring, sometimes the first "large" purchase a couple make together -- is separate property of the wife.
A Fair Divorce Settlement
One veteran divorce lawyer said that a "fair" settlement is probably one that both parties are not completely happy about, but both can live with. One judge once applied this logic by saying that a "fair" settlement is one that neither party is happy with. In divorce, however, fair and reasonable do not mean equal. For example, sometimes a court gives the marital home to the wife and mother even when the award gives her more than half the marital estate. A fair and reasonable settlement goes a long way toward making life after a divorce easier and better for the former spouses and their children.
The Marital Home in Divorces with Children
The custodial mother very often ends up with the family home because in divorce actions judges try to disrupt children as little as possible.
Separate Vs. Marital Property
In general, separate property is what a spouse brought to the marriage, inherited or received as a gift during the marriage. Marital property is everything the couple acquired during the marriage regardless of whose name is on it.
The Morning After the Divorce is Final
Every dollar spend fighting about the distribution of property is one less dollar that spouses have when the move on as single people. This is self-evident, but many battling partners forget it. Contrary to what many people believe, divorce seldom makes anyone richer, but it does make many people poorer.
A Word to Women Getting a Divorce
A traditional married couple’s lifestyle is usually based on the husband’s income. It is important, therefore, to remember that property is divided one time, but a husband’s career assets continue to produce for years. These assets include salary, stock options, health and life insurance, disability, vacation and sick pay, education and training, and, most of all, potential earning power, which is usually greater than a wife’s.
Conveying Property After Divorce
If you are transferring ownership of the marital home from one spouse to the other, make sure you get the other spouse off of the deed. Moreover, refinancing the marital home may be necessary in order to have the spouse’s name removed. Some people find out the hard way that they are not able to refinance the house they receive because as a single individual his or her income is insufficient.
The Halves are Seldom Equal
For divorce purposes, states are either community property states or equitable distribution states. Community property states each identify the spouse’s separate property, such as assets inherited or brought to the marriage, and everything else is subject to a 50-50 distribution. Equitable distribution states agree that a couple’s marital property is divided equitably. This does not necessarily mean 50-50.
Yours, Mine and Ours
In a divorce, the value of a family business is often very problematic. Generally, divorcing spouses have three options: 1) one spouse keeps the business; 2) both continue to work in the business; or 3) sell the business. Strangely, many men and women who strike out as married couples can work together quite well as business partners.
Separating Personal Property at the Time of Separation
It is a good rule of thumb to take possession of personal property at the time of separation. Once a spouse leaves decides to leave the marital home permanently, he or she should try to take his or her personal belongings. This is a natural process for most. Leaving things behind will drag out the emotional aspect of a divorce, and should a divorce become highly contested the personal belongings left behind can be come part of cat and mouse tactics.
Equitable Versus Equal
A common misunderstanding by those divorcing is believing that "equitable" is defined as equal. Equitable is what is fair, so dividing property in an equitable fashion does not necessarily mean equal (50-50). An equitable property distribution may be 60-40.
Protecting Marital Assets Through a Corporartion
Piercing the corporate veil is not always the easiest of tasks. Many divorcing spouses will seek starting a corporation in the state of Nevada to hide marital assets. They choose Nevada because the corporate laws are much more lax and permit silent principals. When someone is a silent principal, he or she is able to hide behind the corporate entity, essentially hiding money in the anonymity.
Hidden Assets
Very often in a divorce, one spouse attempts to hide marital assets. This is one reason why when a divorce is in the offing, it is a good idea to begin to collect al financial information. Assets can be hidden as false debts to friends or in a closely held business.
Yours, Mine, and Ours
In many divorce cases, the largest asset is the family home. Like the family business, divorcing spouses can sell it; one spouse can buy out the other, or they can continue to own it jointly. Each course offers advantages and disadvantages, and each should be considered carefully for its short-range and long-range consequences.
Pros and Cons of Bifurcation and Divorce
The granting a bifurcated divorce while reserving economic issues for later proceedings has several pros: It can quickly put an end to a bad marriage and allow the spouses to move on emotionally and start over, and it prevents one spouse from holding the other’s personal life hostage to economic demands. On the down side, bifurcation can result in two trials rather than one (much more expense with court and legal fees), and it can slow down the resolution of economic issues by removing an important incentive for reaching a settlement to get a divorce.
Community and Equitable Distribution Property States
A "community property" state will classify assets as ether separate or community (marital). And once classified, the court will divide upon divorce the community property 50-50 in an equal fashion. The community property states are as follows: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. On the contrary all of the other remaining states are "equitable distribution" states, which classify property as separate and marital, and upon divorce the marital portion is divided in a fair and equitable fashion, which does not necessary mean equally.
Staying On Top of Your Marital Finances
Many spouses get stuck at the time of divorce, especially wives, without any knowledge of the finances of their marriage. In a circumstance like this, it is difficult to deliver the information a lawyer would need, but it is even more difficult to reveal whether or not an asset is being hidden. If a separation or divorce is inevitable, do your best to get up to speed on all the assets, bank accounts, company accounts, and investments as quick as possible.
Assigment of the Marital Home
This can be done by a quitclaim deed, thus releasing one spouse from owner ship of the home. If both names are not on the deed, a formal transfer would need to take place if the owning spouse is not on the deed. Keep in mind that when assigning the marital home, re-financing the mortgage (if any) might be required, which can be an unforeseen expense.
Marital Vs. Separate Property
In regard to dividing property in a divorce the most common dispute between the divorcing spouses is the classifying of the assets. The definitions of separate and marital property are rather straight forward, but with certain assets, and how these assets were used or not used during the marriage, can make it arguable that they would be one type of asset rather than the other. For example, the engagement ring. The spouses were not married at the time, and the gift is typically considered separate property, but how can an engagement ring not be considered marital in nature? Another great example is a home inherited by one spouse, but both spouses living in the home as a married couple.
Overlooked Assets
Sometimes divorcing couples forget about assets. Sometimes these assets can have significant value and are rightly subject to distribution. They include frequent flyer miles, stock options, club memberships, patents and copyrights and intellectual property, overtime and sick pay.
Who Wants the Homestead?
In considering the family home in conjunction with a divorce, here are reasons to sell it: mortgage payments are too high, too much maintenance, too much money in equity, other debts and too many memories. Here are some reasons to keep it: the house is a good place to live, other sufficient assets, the inability to refinance, the ability to maintain it and tax considerations.
Apportion of Marital Property
If the parties can not reach a property settlement, the courts will award the marital property in a fashion it deems to be appropriate and fair. This being said, many property awards decided by the court are 50-50 or very close. In rare cases, it will be as drastic as 30-70, but for this to be the case, some very unique circumstances must exist.
Property Settlement Cements
Unlike child support, custody and visitation, a property settlement is like cement: when it is done, it is done. After a divorce is final, it is too late for a change of mind. Poured cement means it is too late for lament.
Who Gets the Homestead?
The fate of the family homestead is one the biggest questions a divorcing couple must agree upon or let the court decide. The spouses must consider both short-term and long-term costs carefully. Ending up with the marital home in a property distribution award upon divorce can be the worst outcome. Many spouses do not realize the financial burden of trying to support such an asset as it eventually leaves them to be forced to sell it or even worse into bankruptcy.
Separate Funds Devoted to Marital Asset
If separate funds are carefully (we emphasize carefully) used to improve a marital asset, and the separate funds are not commingled with marital funds to achieve the improvement, some will argue that the active appreciation in a marital home or other marital asset is not marital but rather separate property.
The Repercussions of Leaving
The manner of leaving as a fault issue is not as important as it used to be; however, in some states it can affect property distribution and support.