Deciding to pursue divorce is one of the most difficult and emotional decisions you will ever make, particularly if you have children. Divorce also involves financial matters that must be resolved and legal issues that must be addressed. A family law attorney at Kope and Associates can help you to understand the basic issues involved in divorce and to use a rational approach to the divorce process.
Grounds For Divorce
Traditionally, a person filing for divorce had to prove grounds (fault) to obtain a divorce. Today, the majority of states, including Pennsylvania, allow at least one form of no-fault divorce that does not require proof of fault. This means that either you or your spouse may obtain a divorce even if one of you does not consent. It is important to keep in mind, though, that there may be substantial waiting periods for the divorce if either you or your spouse does not consent.
Pennsylvania also allows for fault-based divorces, which can be pursued to expedite the divorce process, especially in situations where one spouse does not consent to the divorce. However, fault-based divorces require a legal reason for the divorce. The law in Pennsylvania specifically outlines the different types of conduct that are required before a divorce can be granted. Some of the more common types of fault that may be grounds for divorce are adultery, mental illness, conviction of a felony, abandonment, drug abuse, cruelty, impotency, and bigamy. Further, Pennsylvania courts will consider fault when determining the amount of spousal support and alimony owed by one spouse to the other.
Alimony, Spousal Support, and Maintenance
In Pennsylvania, support may be awarded to a spouse who earns less money or has a lower earning capacity than the other spouse. The three different types of support that may be awarded to a spouse are called spousal support, alimony pendente lite (also called APL), and alimony.
Prior to the entry of a divorce decree (final order in divorce), support paid to a spouse is called "spousal support." Spousal support is generally not available if the parties live in same residence unless it can be established that one spouse fails to contribute to household expenses. In Pennsylvania, the amount payable for spousal support is based upon a percentage of the difference of monthly incomes (after tax) or earning capacities of the parties after consideration of other support obligations. Pennsylvania law provides that if the spouse receiving spousal support (also known as the payee) has committed one of the fault-based grounds for divorce (as set forth above), the court has the right to refuse to award spousal support. The obligor’s (person paying support) right to raise the fault grounds is called an entitlement defense to the payment of the spousal support. In Pennsylvania, there is no fixed length of time that spousal support is payable. However, if the parties have been married for only a short period of time prior to their separation, the Pennsylvania family court can limit the duration of any spousal support (or alimony pendente lite) payments as well as the monthly amount payable.
Alimony Pendente Lite or APL
The amount payable under an APL order is based upon a percentage of the difference of after tax monthly incomes of the parties and after consideration of other support obligations. Pennsylvania family courts have held that the purpose of APL is to permit both spouses the financial ability to proceed in the divorce action. As such, the payer spouse cannot raise the entitlement defenses available in spousal support actions. In other words, even if the spouse seeking APL has committed adultery or has abandoned the marriage without a just cause, that spouse may be entitled to APL payments. "Pendente lite" is a Latin phrase meaning pending the litigation. As such, Pennsylvania APL orders generally last until the divorce decree has been entered and equitable distribution has been resolved. For the spouse receiving APL, this fact often causes them to attempt to prolong the entry of the divorce decree and finalization of equitable distribution as long as possible. On the other hand, the spouse required to make the APL payments is generally motivated to finalize the divorce and equitable distribution issues as soon as possible to limit the duration of APL payments.
In Pennsylvania, after a divorce decree has been entered and the equitable distribution has been decided, any support payable to a spouse would be considered "alimony." Pennsylvania law provides that alimony is only awarded if a spouse cannot meet their reasonable needs (the spouse's reasonable standard of living during the marriage) after taking into consideration their income and the assets they were awarded as part of equitable distribution. Receipt of alimony is not guaranteed; an alimony award is within the discretion of the court unless an agreement is reached between the divorcing spouses.
Some situations in which alimony may be payable include those situations when the spouses have a great disparity in income, when the parties had a long-term marriage, when one spouse suffers from a mental or physical disability, or when one spouse primarily cares for minor children who are not yet of school age. Depending on the facts of a particular case, alimony can be awarded to allow a spouse a specific amount of time to "rehabilitate" himself or herself (often termed rehabilitative alimony), for the rest of that spouse's lifetime (often termed permanent alimony), or until a specific condition is met in the future. In Pennsylvania, alimony is usually terminated, unless the order or agreement provides other terminating conditions, when the recipient spouse begins residing with another person in a marriage-like relationship or when the recipient spouse remarries or dies.
Calculation of Spousal Support, APL, or Alimony
In calculating all forms of support payable to a spouse, consideration must first be given to whether the defendant in the support action has any orders for child support, the amount owed on each order, and whether there are any orders for support of a previous spouse. After consideration of the other orders, spousal support and alimony pendente lite are generally based upon a fixed percentage of the differences in the net incomes or earning capacities of the spouses. If child support is also involved, the fixed percentage is 30% and if child support is not involved the fixed percentage is 40%. In determining the amount of alimony to be awarded, fixed percentages of the differences of incomes or earning capacities are not utilized. Instead, the court will consider the reasonable needs of the dependent spouse and the amount of money needed to supplement the dependent spouse's income or earning capacity to meet those reasonable needs.
Tax Aspects of Pennsylvania Support Orders
Federal law states that if a spouse receives spousal support, APL, or alimony, the amount received usually is treated as income to the recipient and a deduction from income to the person paying alimony. In addition to the amount for support, if the payor spouse pays any additional amounts for payment on the mortgage, health insurance, or unreimbursed medical expenses, these additional payments may also be considered as payments for alimony under federal tax laws. If an individual is paying or receiving support in an unallocated order, it is best to consult with a tax advisor.
Pennsylvania Orders for Health Insurance Coverage
In Pennsylvania, the issue of which spouse or parent should provide health insurance for the other spouse and/or children and whether the person carrying the insurance should be partially reimbursed for any costs associated with medical care are issues that can be resolved as part of a claim for support. However, upon the divorce, the health insurance policy covering the family no longer covers the former spouse who is not the policyholder. Employer provided health insurance plans will only cover the employee-spouse after a divorce decree is entered by the court. A federal law requires most employer-sponsored group health plans to offer the non-employee spouse the right to purchase continued coverage at group rates for as long as three years after the divorce. This coverage is often referred to as "COBRA benefits." The divorced spouse of the employee must pay for the COBRA coverage at the employer's cost, not the discounted employee rate for said insurance.
Division Of Property
Spouses who wish to divorce often have assets and debts that need to be divided as part of the divorce process. In Pennsylvania, the term "equitable distribution" is the legal term for the process of dividing the marital assets and marital debts. If spouses who are going through a Divorce in Pennsylvania are unable to agree about the division of their marital assets and marital debts, the spouses may elect to engage in the formal court process for equitable distribution. The decision of whether to negotiate an out-of-court settlement or utilize possibly a trial often involves a cost-benefit analysis.
Separate or Non-marital Property in Pennsylvania
Pennsylvania law allows separate or non-marital assets to generally escape the equitable distribution process. Non-marital property includes pre-marital assets (property that a spouse brought into the marriage), inheritances received by one party during the marriage, gifts to a spouse other than from the other spouse, property sold or disposed of in good faith during the marriage, and property excluded by a valid pre-nuptial agreement. However, the increase in value during the marriage of non-marital property may be considered a marital asset if the increase in value was not excluded from consideration in a prenuptial agreement. Furthermore, if a husband or wife decides to use some premarital or non-marital funds for a common purpose, such as purchasing a home in joint tenancy, those funds will normally be converted from non-marital property to marital property. In addition, in the event that one spouse placed their inheritance in a joint account or purchased an asset held in joint names with this money, the inheritance monies may be considered a gift to the marital estate and not excluded from the marital estate.
Marital Assets or Marital Property in Pennsylvania
Marital assets include property and income acquired during the marriage. A home, business, furniture, retirement accounts, other investments and motor vehicles purchased during the marriage are examples of marital assets. In these examples, the particular asset may be considered to be a marital asset even if it was acquired in only one spouse's name as long as it was acquired during the marriage and was not acquired through the use of the spouse's non-marital assets. Some assets may have both a marital and non-marital component. In that case, the non-marital value of the asset is excluded from the equitable distribution process.
In addition to dividing property, most couples have debts to divide. Marital debts are debts that were acquired by the parties after the date of marriage and before the date of final separation. Marital debts include such items as mortgages, loans, credit card balances, tax obligations and judgments. A debt may be a marital debt even if only one of the parties contracted for the debt as long as the debt was incurred during the marriage and was arguably for a marital purpose.
Discovery and Appraisals
Before an agreement can be reached or the parties proceed to family court for equitable distribution, the family law attorneys and the spouses must have documentation proving the value of marital assets, the amount of marital debt, and the incomes of both spouses. Sometimes, both spouses have access to this information and can provide it to their attorneys. In other cases, only one spouse has access to the information and refuses to provide the information to the other spouse. "Discovery" is the term used for the formal legal process of compelling the spouse who possesses information about the marital assets, marital debts, or income of either party to provide copies of the information to the requesting spouse or their attorney. It is certainly much less expensive for the spouses to agree to informally exchange the documentation in their possession and then provide it to their respective family law attorneys than for the family law attorneys to file the formal discovery requests to the other spouse.
When real estate, pensions, businesses or other types of assets are involved, it is often necessary to obtain an appraisal by a certified expert to determine the value of the asset. These appraisals vary in price depending upon the asset that is being valued, but are a key component in determining the marital estate to be divided in equitable distribution.
Dividing Marital Assets and Marital Debts
As stated above, equitable distribution is the process of dividing marital assets and marital debts. Because Pennsylvania is an equitable distribution state and not a community property state, our family law courts divide marital assets and debts based upon principles of equity, or in other words as fairly. The division of assets and debts does not necessarily mean that they will be divided on an equal basis.
Under Pennsylvania equitable distribution laws, courts consider a variety of factors and need not weigh the factors equally. This permits more flexibility and more attention to the financial situation of both spouses after the divorce. However, it also makes the resolution of property issues less predictable.
Some of the factors that the Pennsylvania courts consider in equitable distribution include:
- the length of the marriage
- whether either party had previously been married
- whether either party has significant non-marital assets including assets excluded by a prenuptial agreement
- 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
- the tax consequences of any award
- whether either party will be the primary custodian of any minor children
Fault for causing the end of the marriage is not a consideration in the equitable distribution process.
Pennsylvania Marriage Settlement Agreements
Although a divorce may be emotional, most cases do not end up in a contested trial. Usually, with the assistance of their attorneys, the parties negotiate and settle such things as division of property, spousal support, child support and custody. It may not be possible to predict with complete precision what a judge would do, but an experienced family law attorney can give a range of probable results. With that knowledge, parties often prefer to reach their own agreements rather than go through the monetary and emotional expense of a trial. Once an agreement is reached, it will be incorporated into a property settlement agreement, which is a contract that divides the marital assets and debts and resolves other issues relating to the divorce including child support, custody, and alimony. It is important for both spouses to fully understand the terms of a settlement agreement before they sign it. Once signed, marriage settlement agreements can be enforced by a family court if either party fails to comply with the terms of the agreement. There are only very limited circumstances in which a marriage settlement agreement can be set aside by the court.
Pennsylvania Court Ordered Equitable Distribution
If divorcing spouses cannot agree upon how to divide their marital assets and debts, the spouses will be required to go through the formal court process for equitable distribution. The court process generally requires that each party file an Inventory, which is a listing of what they believe are the marital assets, marital debts, and non-marital property.
Most county courts allow the spouses to obtain a conference before the court regarding equitable distribution immediately after a divorce complaint is filed. Generally the court will schedule one or two pre-trial conferences to attempt to mediate the disputed issues in the equitable distribution case. Only in the event that a settlement is not reached will a trial be scheduled. In most counties, the pre-trial conferences and the trial may be conducted by an equitable distribution master instead of a judge. If the equitable distribution hearing is conducted by a master, the master will issue a recommendation to the judge on how the case should be resolved. In this situation, either spouse has the right to file exceptions or an appeal to the recommendation of the master and have the issues reviewed by the family court trial judge.
If you or someone you love is involved in, or will become involved in a divorce in Harrisburg, York or surrounding areas of Pennsylvania, please contact Kope and Associates for a free consultation. The family law attorneys at Kope and Associates have particular experience in the complicated laws surrounding divorce. Contact us today and have immediate experience on your side.