Regardless of the size of the marital estate or assets, it is always important to consult with a financial adviser to make sure that the decisions you make regarding Equitable Distribution don't have hidden tax consequences either immediately or in the years to come. Remember that a family law attorney is an expert in arguing and negotiating these issues, he or she is rarely also an expert in tax law or in financial planning as well. Taking the time to consult experts in these areas can save you significant losses in the future.
Division of Inherited Property
As with any other marital asset, the intent behind the use of inherited property is the key factor in determining fair division. For example, if a spouse puts inherited funds in a joint account, or uses the inherited funds for marital purposes, those funds can be considered marital. On the other hand, a spouse who puts assets in an account solely titled in his or her name, or in trust for the benefit of themselves or their children, should be protected from having to divide those assets as a part of equitable distribution of the marital estate. In the end, proceedings for the division of marital assets are intended to fairly divide the estate such that each respective party can maintain their current standard of living. If a spouse never had any part of a marital asset, then it is not considered part of their prior standard of living, and therefore not divisible.
The Marital Home
You may choose to stay in the marital home until the divorce is finalized so that your children can live in a stable household. Both spouses have a right to choose this option unless they are removed by order of Court. Although cohabitation can result in financial savings, it may also create a high-stress environment for all parties involved.
To remove your spouse from the residence, you would need to file for what is called "exclusive possession" of the home. Exclusive possession is merely the right to live in the home undisturbed by the other party. This does not, however, have any effect on your financial interest in the home when it's time to divide the marital assets.
Three Types of Support
In Pennsylvania, other than child support, there are three types of support a spouse may be required to provide to another spouse. The divisions are based on the status of the case: before a divorce is filed, during litigation of a divorce, and after the entry of a divorce decree.
The first type of support is Spousal Support, which begins from the date of separation. Spousal support is based on need and can be refused to a party who has been found guilty of fault, abandonment, cohabitation, abuse, etc.
After divorce has been filed, support can transition into Alimony Pendente Lite, or APL. This begins on the date of the divorce complaint and ends on the date on which the divorce decree is entered.
The final form of support is Alimony. PA Courts do not hand out alimony as generously as in other states, and even when granted, alimony is usually awarded only for a certain period of time. Generally, the only cases where Alimony is awarded are those cases with a significant difference in current earnings and the possibility of future earnings. The purpose of alimony is to support the other spouse until he or she can find a means of self-support. Remember when evaluating Alimony that these payments are tax -deductible for the party paying and taxable income for the party receiving.
In order to evaluate and divide the marital estate, Pennsylvania courts rely on Equitable Distribution, or ED. Factors taken into account include each parties' ages, work histories, education, earning capacities, disabilities, and separate estates. Ultimately, the Court's goal is to ensure that both parties are able to support themselves after the separation.
When determining which assets are marital and which are non- marital, the Court judges the contributions and intentions of the parties as shown by their actions during the marriage. Even if a home is solely in one party's name versus another's, the Court will be more interested in whether it was purchased before, during, or after marriage, and where the funds came from to purchase the home, maintain the home, or pay the mortgage.
The most important factor in Equitable Distribution is in its name, it is intended to be equitable or fair. Marriage is seen as a mutually beneficial relationship where each party's contributions whether financial, practical or emotional help to build the assets of the couple