Understanding Child Custody in Pennsylvania

March 13, 2024 by Leave a Comment

UNDERSTANDING CHILD CUSTODY IN PENNSYLVANIA

No issue is more important when parents separate than the custody and future of their children. Answering this question is also one of the most difficult and unwelcome decisions that a judge must make. The process is complex, the results uncertain, and often expensive. Multiple people, who are strangers to you, your spouse, and your children, can be involved, people such as court-appointed custody masters, psychiatrists, psychologists, social workers, and ultimately judges. All of them are looking out for the “best interests of the child.” None of them really know what that means.

To guide them all, Pennsylvania law requires that they answer a staggering number of invasive and uncomfortable questions – 16 in all! The Courts must answer difficult questions like:

  • Which parent is more likely to help foster contact the relationship between the child and the other parent;
  • Which parent is more likely to have a loving and stable relationship with the child; and
  • Which party is more likely to take care of the child’s daily physical, emotional, and educational needs.

They must also answer simpler questions like:

  • Which parent takes care of the child’s basic needs;
  • The availability of extended family;
  • The accessibility of child-care; and
  • The distance between the parents’ homes.

The Courts will even assess your own mental, emotional, and physical health.  If your child is old enough and mature enough, the Courts will take your child’s preferences into account. However, your child’s preferences are not supposed to be the controlling factor.

Custody masters and judges typically use these factors like a score card, ticking off boxes in favor of one parent or another. Then, they add up the score and make their decision. They do not simply give each factor the same weight and declare a winner, however. Moreover, the Courts may not make custody decisions based on gender.  They do, as a practical matter, though still prefer mothers of young children over fathers, which is hard for fathers to overcome. Some factors are more important than others. Some facts lean more heavily in favor of one parent or the other. Even with the factors, fundamentally no judge or custody master looks at the same facts in the same way. That is what makes it so difficult for a parent and their attorney to predict how a judge will decide a custody request.

Even if different judges may assess the factors the same way, at the end of the process they still must decide how to actually divide the custodial time. That decision will determine who gets weekdays, who gets weekends, who gets holidays and vacations, which school will they attend, and even possibly who drops the children off and picks them up. While there are some basic schedules used, different judges will establish different schedules.

For parents, who must leave their children’s home on short notice and do not have a second home for themselves and their children, securing custody of their children can be very hard financially. Courts will limit the out-of-home parent’s time, including overnights with their children, if that parent does not have enough bedrooms and beds for their children. But, setting up a second home on short notice is expensive and time-consuming, especially when, as is so often the case, displaced parents generally do not have much money for their own housing after paying child or spousal support. The amount of your custody time will also affect the amount of child support payments. To make matters more challenging, keeping up a good relationship with your child is particularly important just after separating for securing a good, long-term future with your child. So, displaced parents should try to make a suitable home for themselves and their children as soon as possible.

All of these considerations make the fight to protect your time and relationship with your children the most difficult and important aspect family separation.

If you need help establishing your right to custodial time with your children or have questions about child custody law in Pennsylvania, please contact Gregory J. Spadea at the Law Offices of Spadea & Associates, LLC at 610-521-0604 for free 20-minute consultation.

Filed Under: Divorce, Family Law

What is Considered a Marital Asset in Pennsylvania

February 19, 2024 by Leave a Comment

Knowing what is and what is not “marital property” is vital to a satisfactory outcome when filing for divorce in Pennsylvania.  Pennsylvania’s statutes define “marital property.”  While the statute excludes specifically certain types of property, most divorces concern two kinds of marital property:

  •  property that you acquired during your marriage as an individual or jointly with your spouse; and
  •  the increase in the value of property that you had when you got married and continued to own during your marriage.

An example of the first kind of property is a car that you bought in your own name after you got married.  Even if you titled the car only in your name or you used your own money from your individual bank account to pay for it, the car is marital property.  An example of the second kind of property is a car that you owned when you got married.  In that case, only the increase in the value of the car during your marriage above the value of car before you got married is considered marital property.

Marital property means more than just a physical object, like your house or your car.  It can also mean things like your right to money damages because of a car or work accident or a broken contract.  If the accident occurred when you were married but before the date of your final separation, the right to that money is marital property.  It does not matter whether you were paid a settlement on that claim after your divorce.  The settlement money is still marital property.

Not every piece of property that you acquired after you were married is considered marital.  Any kind of property that you acquire after your “final separation” using your own funds is not marital.  So, if you bought that car after you separated from your spouse with money that you earned after you separated, then the car is yours.  Your spouse has no claim to it.  On the other hand, if you bought that car after you separated and you used joint funds, then the car is marital property.

Marital property is more than just what you own.  It also is what you owe to creditors, like banks and credit card companies.  Debts like those are considered marital debts, even if your spouse ran up charges on his or her personal credit card during your marriage and before final separation without your knowledge or consent.  While, you may not be liable to the bank for those kind of debts, those debts are considered marital obligations.  Responsibility for those debts will be divided between you and your spouse.  The key in all of these situations clearly is figuring out the date of final separation.

Since Pennsylvania does not recognize the idea of “legal separation,” the date of your final separation may be as late as the date when you or your spouse filed for divorce.  It may also be as early as the date when you stopped living under the same roof.  However, when you and your spouse continue to live under the same roof, the courts will have to decide the date of your final separation.  In those situations, there are several facts that Pennsylvania courts will consider when figuring out the date of your final separation.  Whether and when you and your spouse stopped presenting yourselves as a married couple is significant.  The date when you separated your finances, if you held joint bank accounts during your marriage, is also relevant.  The date when you stopped sharing a bedroom or having sexual relations matters too.  Even something as simple as whether you and your spouse grocery shop, cook, or eat together can be important.

Practically speaking, the date of your final separation will determine when you and your spouse stopped acquiring marital property and stopped getting into marital debt.  For spouses, who own or control most of the marital assets or who incurred the least amount of individual debt, advocating for the earliest date of final separation is important.  Conversely, for spouses, who do not own or control most of the marital assets or who incurred most of the marital debt, advocating for a later date of final separation is critical. 

If you are not sure about your marital property or obligations or you have any questions about marital property, please contact Gregory J. Spadea, Esquire, at 610- 521-0604 at the Law Offices of Spadea & Associates LLC for a free 20-minute consultation.

Filed Under: Divorce, Family Law

Understanding How to Terminate and Modify Alimony in Pennsylvania

February 19, 2024 by Leave a Comment

An award of alimony is not necessarily a permanent obligation or a guarantee of future income.  Instead, under Pennsylvania’s statues, it can be ended or modified whenever:

  • A substantial and continuing change in circumstance occurs; or
  • The recipient marries or “cohabits” with a member of the opposite sex; or
  • The recipient or the payor dies.

The death of the spouse paying alimony or the spouse receiving alimony are obvious end points for alimony.  So is re-marriage.  Changed circumstances and “cohabitation,” however, are not so easy to prove or disprove.

To end or modify an award of alimony when circumstances change or cohabitation occurs, the courts look at each specific situation.  One of the most common circumstances for a termination or change in the amount of alimony is a change in the employment or earning capacity of the paying or the receiving spouse.  For example, if the receiving spouse alimony has an accident or is diagnosed with a medical condition that severely limits their ability to support themselves, courts will consider whether the amount of alimony should be increased to keep the receiving spouse supported at the same standard of living.  On the other hand, if the paying spouse gets a significantly better job and the original award of alimony and marital property was not enough to provide the receiving spouse with the standard of living they had during the marriage, the courts may increase the amount of alimony.  Similarly, if the paying spouse suffers a significant and permanent loss of employment or a disabling medical condition occurs, then the court may decrease the amount of alimony.  There are many other changes in circumstances that could cause the termination, reduction, or increase in the amount of alimony.  The main factor for a court is whether change in circumstances is substantial and continuing. 

Pennsylvania law does address one specific kind of change in circumstances: “cohabitation” with a member of the opposite sex, who is not a family relative.  A family relative is someone, who is within the degrees of “consanguinity” of the recipient ex-spouse.  Consanguinity simply means the same blood.  For Pennsylvania, relatives from parents, to children, siblings, first cousins, their children, grandchildren, nieces, nephews, aunts, and uncles are all considered within your consanguinity.  If the receiving spouse lives with one of these family members during or after the divorce, the obligation to pay alimony and the ability to receive alimony will continue. 

However, when they move in with someone, who is not a relative and they live together as spouses would, then the obligation to pay alimony and the ability to receive alimony ends.  Cohabitation is defined as “financial, social, and sexual interdependence.”  Proving or disproving a claim that an ex-spouse is cohabiting is the challenge. 

Courts look at the total circumstances to decide whether someone is cohabiting.  Some of the significant facts showing this interdependence are: whether the ex-spouse and the paramour share the same home and bedroom; whether they contribute together to the household expenses, such as rent or mortgage payments, utilities, groceries, car payments, or insurance; and, whether they have joint bank or credit card accounts.  Other facts include how they present themselves to the world – as partners or merely housemates.  There is no limit to the relevant facts of cohabitation, except the investigative power of the parties and their attorneys.

In the end, it does not matter if the spouse co-habits before, during, or after the divorce proceedings.  Alimony will terminate whenever cohabitation occurs, even if it starts and ends during the divorce proceedings.

Your agreement to pay or receive alimony will override Pennsylvania’s statues.  In other words, you and your spouse can agree that neither death, re-marriage, change of circumstances, or cohabitation will end or change the payment of alimony.  You can also agree that particular changes, such as a significant raise, could reduce the amount of alimony on some percentage basis.  The key to any award or agreement for alimony is planning for your future.  If you are the paying spouse, then terminating or reducing alimony by agreement is in your best interests.  If you are the receiving spouse, making sure that alimony will continue to be paid regardless of events in the life of the paying spouse is vitally important.  Receiving spouses can could protect their future alimony payments by requiring the paying spouse to maintain life or disability insurance for their benefit.  A good attorney will help you to find a solution that fits your divorce or advocate for you if you cannot resolve the claim for alimony by agreement.

If you think that your circumstances justify a change in alimony or you have any questions about alimony, please contact Gregory J. Spadea, Esquire, at the Law Offices of Spadea & Associates for a free 20-minute consultation at 610-521-0604.

Filed Under: Alimony, Divorce, Family Law

When Can I Deduct Alimony Ordered Prior to December 31, 2018

November 18, 2018 by Leave a Comment

When divorce occurs, one ex-spouse is often obligated to make continuing payments to the other spouse. However for the payments to be deducted by the payer, they must meet the tax-law definition of alimony. For any particular payment to qualify as deductible alimony for federal income tax purposes and meet the tax law definition of alimony, all the following requirements must be met:
1. The payment must be made pursuant to a written divorce decree or separation agreement such as a temporary support order. Note that payments made in advance of signing a written divorce or separation agreement or before the effective date of a court order or decree cannot be deductible alimony. Such payments are considered voluntary and are therefore nondeductible. The same is true for payment of amounts in excess of what is required under a written divorce decree or separation agreement.

2. The payment must be to or on behalf of a spouse or ex-spouse. Therefore, Payments to third parties, such as attorneys and mortgage companies, are okay if made on behalf of a spouse or ex-spouse and pursuant to a divorce decree or separation agreement.

3. The divorce decree or separation agreement must state the payments are alimony.

4. After divorce or legal separation (meaning the couple is considered divorced for federal income tax purposes), the ex-spouses cannot live in the same household or file a joint return for the year they separated or thereafter.

5. The payment must be made in cash or cash equivalent such as check or money order.

6. The payment cannot be fixed or deemed child support in the divorce decree.

Fixed child support simply refers to amounts designated as such in the divorce or separation agreement,

so it’s easy to identify. Payments are considered to be deemed child support if they are terminated or reduced by any of the following so-called contingencies relating to a child:

a. Attaining the age 18, or the local age of majority.
b. Death.
c. Marriage.
d. Completion of schooling.
e. Leaving the ex-spouse’s household.
f. Attaining a specified income level.

7. The payer’s return is required to include the recipient’s social security number.

8. The obligation to make payments (other than payment of delinquent amounts) must cease if the recipient party dies. If the divorce decree is unclear about whether or not payments must continue, state law controls. If under state law, the payer must continue to make payments after the recipient’s death, the payments cannot be alimony. Therefore, to avoid problems, the divorce decree should always explicitly stipulate whether a payment obligation continues to exist after the death of the recipient party. Failing this test is probably the most common cause for lost alimony deductions.

9. There is also an IRS rule that states if alimony payments decrease by more than
$15,000 per year between years 1 and 2, or years 2 and 3, then part of the payments will not qualify for a tax deduction to the payor (and hence will not be taxable to the payee.) In other words, if alimony payments total more than $15,000 per year then they must last more than one year and cannot be reduced too quickly. The reason for this is because the IRS sees this as a property settlement, not alimony. Because of this rule replacing all monthly payments with a lump sum “alimony” payment that is paid all in one year will often cause a trigger of this recapture rule, since alimony will go down to $0 in year 2.

Keep in mind the Tax Cuts Jobs Act repealed the deduction for alimony paid and the corresponding inclusion of alimony in income by the recipient. The provision is effective for any divorce or separation agreement executed after December 31, 2018, or for any divorce or separation agreement executed on or before December 31, 2018, and modified after that date, if the modification expressly provides that the amendments made by this provision apply to such modification. Thus, alimony paid under a separation agreement entered into prior to the effective date is generally grandfathered.

It is very important to consult a tax attorney like Gregory J. Spadea before signing the marital settlement agreement. You can reach him at the Law Offices of Spadea & Associates, LLC in Ridley Park at 610-521-0604.

Filed Under: Alimony, Divorce, Family Law

Identifying Marital Versus Non-Marital Property in Pennsylvania

January 11, 2017 by Leave a Comment

Each spouse should make a list identifying all assets that they own together or separately. Assets include tangible items, such as real estate, businesses, cars, boats, jewelry, furniture, and collectibles. They also can include non-tangible items, such as bank accounts, stock options, trusts, life insurance policies, patents, copyrights, retirement plans, and profit-sharing plans.

Next, you need to “characterize” or describe each asset as either “marital” or “non-marital.” An asset’s character plays an essential role in the process of dividing and determining the value of property in divorce. Generally speaking, “marital property” in Pennsylvania includes all assets acquired by either spouse during the marriage which includes anytime between the date of the marriage and the date of separation.

“Non-marital” assets also referred to as “separate property” include the following:

  • Assets acquired by either spouse before marriage
  • Assets acquired by gift or inheritance at any time (except for gifts from one spouse to the other that occurred during marriage), and
  • Assets acquired by either spouse after the date of separation.

Generally speaking, courts have the authority to divide and distribute marital property between the spouses in a divorce, but spouses typically get to keep their separate property.

The date of separation is crucial in characterizing property, because property obtained after the date of separation is generally non-marital.

In Pennsylvania, a couple is separated when they begin to live “separate and apart.” This means that the spouses no longer have sexual relations with one another, and they don’t hold themselves out to the world as a married couple. Spouses don’t necessarily have to live in different households to be separated, but that type of separation may be a little more difficult to prove.

Once you’ve determined the date of separation, you’ll need to determine when assets were purchased. Assets acquired before marriage are separate property. For example, if one spouse owned a car before the marriage, the car belongs to that spouse separately through the marriage and after divorce. In addition, assets purchased after the date of separation are generally considered separate, unless a spouse used marital funds to obtain that asset. If so, it will be considered marital, and valued as part of the marital estate.

Next, you’ll need to find out what each asset is worth. Generally, courts use current value. For example, the current value of a bank account is the balance on the most recent statement. For assets such as homes and cars, courts use current “fair market value,” which means the amount the asset is worth if it were sold to an unrelated third party. This can be determined by looking at recent sales of comparable assets. For assets that are harder to value, like collectibles, you may need to hire an appraiser.

Although an asset acquired before marriage is considered separate property, it may have a marital part or value to it. For example, if one spouse owned an expensive piece of art before the marriage, the artwork itself belongs to that spouse. However, the increase in value of the artwork during the marriage is considered part of the marital estate. To compute the marital value of the artwork, you would start with the value of the piece on the date of separation, and subtract its value as of the date of marriage.

In addition, marital assets may have a separate property component that must be computed before knowing the true marital value. For instance, if one spouse established a retirement plan during the marriage, but continued to make contributions after the date of separation, the plan has now become “co-mingled,” which means it’s made up of both marital and non-marital property.

To figure out the marital value of the co-mingled plan, you would generally deduct the separate property contributions from the current value, taking into account any interest that may have accrued.

If you’re not sure how to value a retirement plan, you may need to hire an expert, such as an actuary who can figure it out.

Finally, even though courts won’t divide separate assets in a divorce, courts can consider their values when deciding how to divide marital property. For example, if one spouse inherited a large amount of money, the court may consider those separate property resources when deciding how to divvy up the marital estate.

If you have any questions about marital assets in Pennsylvania, call Gregory J. Spadea at 610-521-0604 of the Law Offices of Spadea & Associates, LLC

Filed Under: Divorce, Identifying Marital Versus Non-Marital Property in Pennsylvania

How Pennsylvania Courts Divide Marital Property During Divorce

January 11, 2017 by Leave a Comment

Divorcing couples may agree on how to divide their marital property themselves. In Pennsylvania, spouses can enter into a “property settlement agreement” (PSA) that memorializes their agreed-upon terms. Couples then submit their PSA to the court, so it can be incorporated into their final divorce decree.

If spouses can’t agree, they’ll end up in court, where a judge will decide. If spouses have a valid prenuptial agreement that addresses the division of property in the event of divorce, courts will follow the terms of the prenuptial agreement.

If there is marital property not covered by the prenuptial agreement, or if there is no valid prenuptial agreement, the court will divide marital property by “equitable distribution.” This means the court will order a division it believes is equitable or fair to both parties but not necessarily equal.

Pennsylvania courts consider several factors when determining equitable distribution, including:

  • The length of the marriage;
  • Whether either spouse has been married previously;
  • Each spouse’s age, health, education, amount of income, and sources of income including disability, retirement, insurance or other benefits;
  • Each spouse’s vocational skills and ability to be employed;
  • The assets, debts, and needs of each spouse;
  • Any contributions by one spouse to the other’s education, training, or earning ability. For example, if one spouse provided financial support or cared for the couple’s children so the other spouse could obtain an education;
  • The future ability of each spouse to earn income and obtain assets;
  • Each spouse’s contribution to the acquisition of marital assets or to preserving or increasing the value of marital assets (including contributions as a homemaker);
  • Any reduction in the value of marital assets caused by either spouse;
  • The amount or value of non-marital assets owned by each spouse;
  • The standard of living the couple enjoyed during the marriage;
  • The financial impact any proposed property division will have on each spouse such as the tax implications, and the expense of sale/transfer/liquidation of property; and
  • Whether either spouse will be the custodian of any dependent children under the age of 18.

In Pennsylvania, courts do not consider marital misconduct, such as adultery, when dividing property, unless the misconduct had a financial impact on marital property. For example, if one spouse emptied a marital bank account buying gifts for a lover during the marriage and without the other spouse’s consent, a court may reduce the percentage the “offending” spouse gets from the marital estate to compensate for the unauthorized spending.

Debts must be divided in divorce as well. You’ll need to identify, characterize, and value all debts. Be sure to make a list, and consider all credit card debts, loans, mortgages, promissory notes, and liens.

Debts are characterized and valued similar to assets, but there are some differences. Debts incurred during marriage are generally considered marital debts, unless a spouse can show that it’s reasonable to assign the debt exclusively to the other spouse.

Debts incurred before marriage are generally “separate” and assigned to the spouse who incurred them, unless the couple jointly incurred the debt before marriage. In addition, if a debt was incurred before marriage for a marital purpose e.g., loan for wedding costs, there is a chance a court would characterize it as marital. Thus, the balance of premarital debts is generally irrelevant, except to show the amount of indebtedness one spouse has. Debts incurred after separation are treated in the same manner.

If you have any questions about Pennsylvania marital property or debts call Gregory J. Spadea at 610-521-0604 of the Law Offices of Spadea & Associates, LLC.

Filed Under: Divorce, Marital Property Division

What Is A Marital Asset in Pennsylvania?

January 11, 2017 by Leave a Comment

Pennsylvania is an equitable distribution state when it comes to splitting up marital assets in a divorce. Equitable distribution does not mean a 50-50 split but, rather, it mandates a fair division of marital property. Marital property includes joint assets and joint debts. A marital asset is defined by statute 23 Pa.C.S.§3501(a) as “all property acquired by either party during the marriage and the increase in value of any non-marital property”. Marital property includes all property acquired even if it is only held in one partner’s name. The same holds true in regard to marital debt; just because the debt is in one partner’s name does not mean it is not marital debt.

Marital assets are acquired during the marriage, starting with the date of marriage and up until the “date of separation.” There is no formal “legal separation” in Pennsylvania, although the concept of a date of separation is important for a number of reasons. The date of separation can be difficult to pinpoint but it is the idea that parties are separated when they are no longer holding themselves out to the world as spouses. This might be when they no longer live together, when they separate their finances, or when one party has initiated a divorce action. There are a number of exceptions under the Divorce Code as to what is considered a marital asset, even though the property might be acquired during the marriage, such as inheritances or property acquired by gift.

Equitable distribution is not always clean cut. It requires a careful examination of all of the facts of a particular case, and an application of the large body of statutory and case law surrounding the issue. It is not uncommon, for instance, that one party has purchased a residence prior to marriage. In equitable distribution of the marital estate, the spouse that owned the residence may be entitled to claim the value of the equity in the home that was built up prior to the marriage. Some counties deal with this by utilizing a “vanishing credit,” where the spouse who owned the property prior to marriage gets a higher percentage of the pre-marriage value back in the equitable distribution if the marriage is of relatively short duration. The rights of the spouse who brought the house into the marriage must be balanced against the rights of the spouse that moved into the residence during the marriage. If the home increased in value during the marriage, that increase is marital property subject to equitable distribution. The same concepts apply to retirement accounts and pensions. There will typically be a marital portion of the asset, and a non-marital portion which should be returned to the participant spouse.

The Pennsylvania Supreme Court recently decided on a 2011 case involving the treatment of a particular type of asset, a monetary settlement from an accident, in the case of Focht v. Focht. In that case, the husband was injured in an accident during the marriage. The husband and wife retained an attorney and eventually were successful in their personal injury lawsuit. However before the lawsuit ended and the settlement money was paid, the parties separated and filed for divorce. The question the Focht case examined and answered relates to all property that is received after a date of separation but “accrued” during the marriage. The Court specifically examined 23 Pa.C.S.§3501(a)(8), which provides that marital property does not include “any payment received as a result of an award or settlement for any cause of action or claim which accrued prior to the marriage or after the date of final separation regardless of when the payment was received.” The Focht Court ruled that because the cause of action accrued during the marriage, before the parties’ final separation, proceeds from the settlement of the suit were marital property. The marital property exception set forth in §3501(a)(8) did not apply, and it was irrelevant that the parties had finally separated by the time the suit settled and the settlement award was paid. Therefore, if a cause of action accrues after the date of marriage and before the date of separation, then any settlement proceeds resolving that cause of action are marital property regardless of when that settlement occurs.

If you have any questions about marital assets or equitable distribution in Pennsylvania, call Gregory J. Spadea of the Law Offices of Spadea & Associates, LLC at 610-521-0604.

Filed Under: Divorce, Equitable Distribution

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