How Are Retirement Funds Handled in a Pennsylvania Divorce?

Going through a divorce forces you to look at nearly every aspect of your life from a new perspective, and to confront the reality that the emotional and financial foundation you’ve spent years buildings has to be re-evaluated and rebuilt.

Of all the assets accumulated through the course of a marriage, retirement funds are among the most challenging for many to address. In most cases, the funds represent both sweat equity from their labors to support themselves and their family, and a future they’d anticipated spending together, now taken away from them. The rules around retirement accounts have contributed to the sense that they are untouchable, and that can make negotiations around them fraught. Still, just as is true of bank accounts, stock portfolios, real estate and other investments, they are assets subject to Pennsylvania’s rules of equitable distribution. However, the prohibitions against early liquidation have led to special processes and forms being created to allow them to be divided without either party being penalized.

Are the Funds Marital?

The first question that needs to be answered is whether the retirement funds were accumulated during the course of the marriage or beforehand. Any accounts set aside prior to the marriage are considered separate, while those earned during the marriage are considered marital, and therefore subject to equitable distribution.  If the plan started after the marriage then all contributions are marital but if established before marriage and continued through the marriage it is considered co-mingled, and that means that some complicated tracking will need to be done to separate out what is marital. In most cases, anything that started after the date of separation is not considered marital or part of the marital estate.

The Question of Equitable Distribution

Once marital assets have been separated out and evaluated, the various factors taken into consideration for equitable distribution will be applied to the funds. Equitable distribution looks at a number of elements, including how long the marriage has lasted, how old each partner is, their health, income, age, and earnings capacity. These are generally used to calculate a percentage of assets each spouse will walk away from the marriage with.

What Types of Retirement Funds Are Owned?

Retirement plans can be pension plans, which are referred to as defined benefit plans, or they can be defined contribution plans such as 401(k) plans, profit-sharing plans, and IRA accounts. The difference is important, as defined benefit plans are funded by employers during employment but aren’t received until after retirement, while contribution plans are funded by both the employer and the employee. The two are treated differently because of the difference in how they are funded and paid out.

For pension plans, the courts generally assess the plan’s value, divide it according to the equitable distribution factor, and then creates either am immediate offset that allows the pensioned employee to retain the plan in exchange for another asset or a deferred distribution for the non-employee spouse that is similar to the plan in place for the employee eligible for the benefit. This usually means that payments begin being distributed monthly when each reaches the age of 65. Another option is for the court to order the spouse scheduled to receive benefits o pay a portion to their ex when they start receiving them.

If the employee spouse’s employer has been contributing along with the employee to a 401K or similar defined contribution plan, the account holder is often ordered to take the percentage of the fund’s value dictated by the equitable distribution calculation and rollover that amount into an IRA, or to liquidate the entire amount to allow the proceeds to be divided. When an account needs to be divided in a divorce, the courts use a special order called a Qualified Domestic Relations Order, or QDRO, to ensure that rights are preserved and each spouse is treated fairly.

If you are concerned about the fair distribution of your assets in a divorce, our experienced attorneys can help. Contact us today to learn more about how your assets can be managed in a fair way, and all of the other challenging aspects of divorce.

What Happens if You Date During Your Divorce Proceedings?

Every divorce has its own reasons and rhythms, but in the end they’re all headed to the same resolution: the marriage is dissolved and each partner goes their own separate way. In light of this, many people want to move ahead and forward, even in the midst of divorce proceedings. For some, this means starting to date other people. But is that a good idea?

The question may seem like a legal one, but like so many other issues in divorce, the more important answer may skew towards the emotional impact of doing so.  Even in a no-fault state like Pennsylvania, where dating is unlikely to make a significant difference on the legal issues that need to be resolved, dating outside of the marriage is likely to have a “poking the bear” effect that will exacerbate and add unnecessary drama to every other issue that you’re confronting.

There are numerous factors that need to be evaluated before deciding to go out on a date. The most obvious ones have to do with minor children and finances. With reference to kids, you need to address whether going out on a date will interfere with your time spent with your children under any existing custody schedule, or whether trying to adjust your schedule to accommodate a date will be used against you. Your soon-to-be-ex may have an objection to the idea of introducing young kids to a new partner, or to having somebody new stay overnight.  Though the courts are unlikely to step in unless the new love interest is abusive or is in some other way a safety concern to the children or to either parent, dating will probably complicate your child custody negotiations.

The other issue that dating might have an impact on is equitable distribution, as it is entirely within your ex’s rights to question whether marital funds are being spent on wining and dining a new partner. If your split is going fairly well and both parties are eager to get it over with this is unlikely to create an issue. But if you are fighting over every nickel and dime or your spouse is feeling abandoned and replaced, you can be certain that pulling money out of a marital account to take a new interest away for a spa weekend is not going to sit well, and may even lead to a time-consuming discovery process or correspondence demanding that you reimburse however much you spent on the other person.

Dating during your divorce proceedings may be absolutely fine if you and your ex have already physically and legally separated, have an established child custody arrangement and have established separate bank accounts for your individual expenses. But if you’re still sharing the marital home or are in the midst of delicate, adversarial negotiations, you may want to think twice as to whether it’s worth the animosity and aggravation that it will inspire.

For more information on pursuing a divorce in Pennsylvania, contact our compassionate divorce attorneys to set up a time to meet.

Does an Uncontested Divorce in Pennsylvania Let You Skip Court?

We’ve all heard horror stories about long, ugly divorce battles. Instead of moving forward with their lives, once-loving couples put all their resources into going to court and trying to hurt each other, or at the very least to “win.” If you and your spouse live in Pennsylvania and are in agreement with how you want to end your marriage, you can skip court entirely by pursuing an uncontested divorce. Also known as a “mutual consent divorce” or a “no-fault divorce,” in Pennsylvania, an uncontested divorce is possible when both spouses agree on all the issues. Ian uncontested divorce allows spouses to finalize their divorce quickly, cheaply and with no emotional drama. If neither party is seeking support and there is no property to divide, the divorce itself can be finalized before any custody or child support issues are worked out. If you and your spouse have property to divide, or one person is seeking support, then those issues need to be worked out before the divorce is finalized.

The Mutual Consent Divorce Process

In Pennsylvania, a mutual consent divorce applies when couples have been separated for yes than a year. In order to obtain a mutual consent divorce, couples must state that their marriage is irretrievably broken and be willing to sign an affidavit stating their intent to end it. If all of those elements are present, then the process is simple and relatively painless.

It starts with a Complaint in Divorce being filed with the Prothonotary/Clerk of Courts by one of the spouses. The spouse that completes and files the Complaint will be the Plaintiff, while the other becomes the Defendant. After filing, the Plaintiff spouse has to “serve” or ensure that the other spouse receives a copy of the paperwork according to the rules of Pennsylvania. Service must be done within thirty days of filing the complaint.

Ninety days after the Defendant spouse has been served, both spouses need to sign an Affidavit of Consent. This document says that each spouse agrees to the divorce moving forward. Once the Affidavits of Consent are signed, each spouse can also sign a “Waiver of Notice” to skip any remaining waiting periods before asking for the final divorce decree. Once all documents have been signed, the Plaintiff spouse needs to submit all the paperwork to the Prothonotary/Clerk of Courts with a Praecipe to Transmit, which is a document showing the court you followed all the rules and asking for the entry of the divorce decree. Once submitted, the paperwork will be reviewed and approved by a judge for signature of the Final Decree of Divorce. Certified copies will be sent to both spouses and the marriage will officially be dissolved.

An uncontested divorce is easy to accomplish if you and your spouse don’t have children or aren’t arguing about assets or support. Things can be more complicated when there are children involved, though custody and child support can be negotiated at any time, either before or after the marriage is legally over. Many couples work with attorneys to ensure that they have not overlooked any important legal issues or to help with terms of child custody and support while still proceeding with an uncontested divorce to save time, money and headaches.
If you are considering divorce and would like to speak to an experienced, compassionate attorney who can help you get through the process as painlessly as possible, contact us today to set up a time to meet and discuss your situation.

The Difference between a Contested and Non-contested Divorce in Pennsylvania

In Pennsylvania, divorce proceedings are either “contested” or “non-contested.”  A contested divorce occurs when one person does not agree to the divorce or the parties cannot decide how to divide the marital property.  A contested divorce often leads to extensive court proceedings and high legal fees because the parties are forced to use the court to resolve their issues rather than coming to an agreement.  Going to court can be very expensive because attorneys charge not only for the time they are in the hearing, but also for the preparation beforehand.  The more combative the case, the higher the number of court hearings and legal fees.

A non-contested divorce gives people another option to the time consuming and expensive procedures of a contested divorce.  A non-contested divorce occurs when both people agree to get a divorce.  A non-contested divorce can be achieved quickly and cheaply when both people are on the same page.  In a non-contested divorce, if there is property from the marriage and the parties agree how it should be divided, the parties can simply create a settlement agreement with the help of an attorney to say who gets what and the agreement becomes part of the parties’ final divorce decree.

If there is no marital property and the parties are just looking to walk away from the marriage, a non-contested divorce can be finalized in less than six months and with minimal legal and filing fees.  If the parties have been separated less than a year, a mandatory 90 day waiting period applies before both parties have to sign documents agreeing to the divorce.  If the parties have been separated more than a year, then the waiting period can be reduced to 20 days with the agreement of both parties.

Our attorneys are available to help you figure out which option applies best to your situation.

5 KEYS TO KEEPING YOUR CHILD SAFE

Instead of a judge deciding your child’s future, you and your spouse can decided to get a settlement agreement. A settlement agreement, for couples with children, is a legal document which spells out the details of how matters surrounding your child will be handled. This can save you a lot of financial and emotional costs. A settlement agreement provides clear guidelines to be followed, which also gives your child the added security of knowing what to expect. Any agreement involving children needs to be in the best interest of the child/ren at all times.

Health Insurance

Make sure to inform your lawyer which parent is going to cover health insurance and how any bills from medical problems will be handled. This would include how medical costs not covered by insurance are going to be covered. Another question to be considered is who will pay for this continued health coverage, or will you opt to split the costs?

Dental & Eye Insurance

These two types of insurance are not usually covered by general health insurance. Adding this to a settlement agreement now will save you backtracking and additional legal paperwork, not to mention additional medical cost of being uninsured and legal costs of going to court.

Cost of Living

The cost of living is a major consideration if you have children. Costs under this category can include anything from daycare to piano lessons. Don’t forget to include school activities and the expense of gas for transporting your child to different activities.

Parenting Time

Some questions to consider for your settlement agreement are:

  1. Who will your children live with? Will there be a primary parent that the children stay with?
  2. Who will your children spend the summer, vacations and holidays with?
  3. Is there a schedule you want to create to split parenting time between you and your spouse?
  4. How will children be exchanged between you and your spouse? Will you use a third party?
  5. How will you communicate to make arrangements for the children and any other issues related to them?
  6. How will you handle situations when one of you cannot meet the schedule? Will you request prior notice?

College Costs

You might think your children are too young to think about this now, but getting this in writing now will save the headache of going to court later. Broaden your agreement to include items outside of “immediate school costs”. This could mean anything from late night pizzas to a semester abroad in Italy. Be as specific as you can about what is expected from each parent.

Your child’s security is a priority with No Contest Divorce Law, LLC. To get your marital settlement agreement started today call 215-398-6760 or click on SETTLEMENT AGREEMENT to learn more.

PROTECT YOURSELF FROM HUGE WEDDING DEBTS

Wedding costs can put a high amount of stress on a new marriage. Often newlyweds find themselves in debt just as the couple starts their new life together. This strain in finances can quickly lead to arguments and discord in the relationship.

In the U.S. weddings average between $19,223 to $32,039. Add anywhere from another 50-100% more if the wedding included custom services and products, experienced professionals, designer labels and popular event places. Below is a sample of five average costs for a wedding:

 

1. Wedding Planner $2,600 – $4,300
2. Wedding Dress $875 – $1,400
3. Engagement Ring $2,400 – $4,000
4. Photographer $1,200 – $2,000
5. Bar Service $1,800 – $3,000

Financial pressures often increase as the new couple purchases their first home, appliances, furniture and other related items. Money is the prime reason couples argue and the number one reason they divorce. Over 70% of couples talk about money on a weekly basis, and the conversations tend to be emotionally based.

The combinations of a downturn in the economy and not having been taught how to effectively engage in financial discussions have resulted in heated and emotional arguments. A spouse may have also kept money secrets thinking that their new spouse wouldn’t find out, or it thinking that it wouldn’t really affect his/her spouse. Lying about finances is a common secret among spouses.

Now that you are considering a divorce it is time to separate emotion from money. The financial road to recovery after divorce can be difficult, especially if you do not have an agreement in writing. Memories can fade or attitudes can change with time. Get your agreement in writing by having a settlement agreement prepared. If you and your spouse can come to an agreement that you both think is fair, then you don’t have to pay thousands of dollars to fight over your assets and debt in court.

This is the time to sit down with your spouse and figure out how you are going to divide debt. Who will pay for what portion of debt? How long will it take?

It’s better to pay a little now to have an agreement prepared rather than a lot later to have a judge decide who is telling the truth. You will both sign it and it will be filed with your divorce paperwork. You can then have the agreement enforced in court at a later date, if necessary. Attorney Jim Cairns can put your agreements into writing and ensure you have a legal document to protect yourself. Don’t wait till after the divorce and realize it’s too late.

Once you have decided how you are going to handle the division of finances contact No Contest Divorce Law, LLC at 215-398-6760 or click on the words settlement agreement to learn how to get your settlement agreement started.

5 KEYS TO LOCATE YOUR SPOUSE’S HIDDEN ASSETS

You want to make sure you have covered your bases and are not being duped by your spouse with hidden assets. To make a martial settlement agreement as fair as possible consider the following.

Start with looking at your expenses. Are your expenses higher than the income that is coming into the house? If so, where is this additional income coming from? When discovering a financial discrepancy one of the best places to start is looking at your spouse’s tax return forms. Some of the key items you want to look at while reviewing tax forms for the last five years are: real estate, trusts, partnerships and inconsistencies in income.

Should you find out after the divorce that your spouse was illegally hiding assets the law permits you a reasonable time to back track and get your share. However, it’s best to do this before you sign the settlement agreement, thus saving you a lot of headache.

Overpayment is a method some spouses will use to hide money. While you are looking at the tax forms, take a look and see if your spouse made a significant overpayment. Your spouse could be banking on that you aren’t going to find out and later on he/she will get a nice refund after the divorce. This also holds true for creditors, don’t overlook these payments.

Third parties are another good source to scrutinize. Did your spouse suddenly have to pay off debt to a friend? Often these types of arrangements are made with the condition that the money be given back after the divorce. Is there a lover in the picture? Was there money spent on a girl/boyfriend – vacations, rent or gifts? Is your spouse and his/her boss close? Would his/her boss wait to pay that big bonus or give a pay raise until after the divorce? Don’t forget to look at stock options and retirement benefits an employer may be holding onto until after the divorce. Also, see if there any contracts that your spouse has been delaying in signing.

Time to visit some government offices. At the County Tax Assessor’s Office you can learn about any home or land that your spouse owns, you will get the address and the assessed taxable value of the property. The courthouse is a must when searching for hidden assets. Records from the courthouse will tell you if your spouse has borrowed money from a mortgage company or a bank. These records will hold information about each asset the person owns and the value, it’s required for the loan application(s).

Bank accounts should be checked for a few different things. Look at the savings account, has there been a huge withdrawal/deposit or unusual patterns of activity? Take a look through cancelled checks. You may find payment for something you weren’t aware of, for example a property payment. In addition, be on the look out for children’s bank accounts which sometimes do not have to be reported as income to the IRS. Don’t forget to make copies of all your financial records.

Once you discover all of your marital assets you can hammer out an agreement with your spouse. Contact No Contest Divorce Law, LLC for a marital settlement agreement questionnaire to help guide you. No Contest Divorce Law, LLC Offices prepares marital settlement agreements at an affordable cost. Make sure to check out our settlement agreement blogs and settlement agreement page on our website. Contact No Contest Divorce Law, LLC at 215-398-6760 or click on the words DIVORCE MASTER to get a free case analysis.

TOM CRUISE & KATIE HOLMES SIGN SETTLEMENT AGREEMENT

After two weeks of being tabloid stars Tom Cruise and Katie Holmes surprisingly hammered out a marital settlement agreement. What looked like a divorce that was going to be dragged through the media and court system has come to an amicable resolution. Cruise and Holmes decided to avoid a long legal battle and do what is best for their six-year old daughter, Suri.

In a statement, jointly prepared by both parties, sent to CNN by Cruise both parties have expressed their desire to keep the divorce a family matter.

To paraphrase the statement:

We are dedicated to cooperating as parents to accomplishing what is in our daughter’s best interests. We want to keep isues affecting our family private and show our respect for each other’s dedication to each of our respective way of thinking and support each other’s roles as parents.”

The martial settlement agreement has saved a lot of embarrassment and emotional pain for not only Cruise and Holmes, but also for people close to them. If a court battle would have been the route for this divorce, Cruise would have suffered damage to his public image and Scientology would have walked away with some battle wounds.

The settlement agreement has been signed and the case settled. From initial reports Holmes will be the primary parent who is responsible for Suri on a daily basis. This part of the agreement worked out for both parties because Cruise was often away from the home due to his career. Another component of the agreement is religion. Though Holmes is protective about the exposure Suri will have to Scientology, Cruise is still free to teach his daughter about his religion.

Divorces with martial settlement agreements are becoming more common. Couples want to save their monies for life after the divorce and not bleed themselves dry in a full blown court drama. Also, the emotional toll of having to relive the pain and suffering of divorce is a top reason couples are figuring how to work out their own affairs and get them into a legal agreement.

Holmes had hired three law firms in three states. You only need one law firm backing you with No Contest Divorce Law, LLC. If you are looking to have a martial settlement agreement, No Contest Divorce Law, LLC can create a legal document which will protect your agreed upon rights. To get started call 215-398-6760 or click on the words SETTLEMENT AGREEMENT. Go to our Divorce Master for a free case analysis and file your simple, uncontested, no-fault divorce case today.

SOCIAL SECURITY – A BENEFIT OF TEN YEARS OF MARRIAGE

If you have been married for ten years or more you may qualify for Social Security benefits through your spouse. There are four requirements which you need to fulfill in order to apply for benefits.

The first one is having been married ten or more years to your spouse. Below are the other three:

  1. You are unmarried;
  2. You are at least 62 years old; and
  3. You are not entitled to a higher Social Security benefit on your own record.

Do keep in mind if you remarry you will most likely lose this Social Security benefit, unless you remarry the same spouse. If you do remarry and the marriage ends in divorce, annulment or a deceased spouse you may qualify for benefits from the initial spouse you married.

You do not have to rely on your spouse to fill out an application for benefits. If he or she qualifies you can go ahead and initiate the paperwork for your benefits regardless of the action your spouse may or may not have taken.

In the event that your spouse becomes deceased you may qualify for benefits as a surviving spouse. In this case the requirements are slightly different, though you must have still been married for at least ten or more years. Listed below are the other two general requirements:

  1. You are at least age 60, if you are disabled then you can apply at age 50; and
  2. You are not entitled to a higher Social Security benefit on your own record.

Benefits paid to a surviving or divorced spouse will not affect benefits paid to family members under the same record. To receive an estimate of your possible benefits you can contact a representative at your local Social Security office.

As you are considering your assets and debts in your marriage, you may also want to have a settlement agreement which will legally protect your financial future. No Contest Divorce Law, LLC also concentrates on settlement agreements, call 215-398-6760 for more information or click on SETTLEMENT AGREEMENT to learn more.

6 FINANCIAL ITEMS OFTEN OVERLOOKED IN DIVORCE

You have decided to get divorced. Where do you begin? A top priority is putting your finances in order. This will give you a solid start once the divorce is final and minimize potential surprises. Let’s be honest, you’ve probably already had enough surprises for a while.

At the top of your list should be getting a credit report. Order them right away. You can get a free credit report from each of the reporting agencies each year. Once you get them go over them with a fine toothed-comb and see if there are any discrepancies or items you may have forgotten to include in your settlement agreement– for example, credit card debt.

You are entitled to a free credit report every twelve months, that’s once a year. The top three companies you want to make sure you get a report from are Equifax, TransUnion and Experian. Some of the information you can expect to find in your credit report include: how you pay your bills, where you live, if you have been sued, if you have filed for bankruptcy and/or if you have been arrested. Keep in mind this information is used by employers, landlords, insurers and applications for credit. Also, beware of imposter websites – we suggest you look up the Federal Trade Commission for details.

Close joint credit cards, if you are not prohibited by a court. The last thing you want to learn is that your spouse went on a spending spree and you are now responsible for this debt.

Tax refunds, if filed jointly, a refund check will be sent in both your name and your spouse’s name or direct-deposited into an account. Use a settlement agreement to make sure the refund is divided between both of you.

With frequent flier miles you have a couple of options. You can either have tickets issued to one of the parties or one of the spouses can monetarily compensate the other for the points.

If Insurance is prepaid, such as house, life, disability and health insurance, then determine the amount that is currently prepaid. Prepayments can be considered part of your marital assets when valuing and dividing up property and finances.

Timeshares can also be dealt with in a few different ways. You and your spouse can continue to own it jointly, one spouse retain it (often at a lesser value than it’s purchase price, since timeshares are usually worth less than what is owed on them- consider an appraisal to find out for sure), or you can agree to sell the timeshare and split any equity or debt.

Professional dues and magazine subscriptions normally offer a significant discount when prepaid two to three years in advance. If monies from your shared accounts were used to pay for this make sure you account for this when reviewing your finances.

No Contest Divorce Law, LLC can legally help you protect your financial assets by preparing a settlement agreement which will be legally binding. If you and your spouse can agree upon how you are going to divide your property and finances, a settlement agreement can save you money. Contact No Contest Divorce Law, LLC at 215-398-6760 or click on the words SETTLEMENT AGREEMENT to learn more.