Articles Posted in Equitable Distribution

When can rent be charged to a Spouse living in the Marital Home Alone?

Spouses that have been displaced from their marital home during divorce proceedings may find themselves put in the position of paying for a home they have no ability to enjoy.  This commonplace situation has led to a general rule in Pennsylvania Courts that a dispossessed party can claim a credit for the fair rental value of marital property which is jointly held against the spouse in possession at the time of equitable distribution.  See Middleton v. Middleton.  Effectively, they can charge the spouse enjoying the marital home rent for the time that spouse spends in exclusive possession of the property.  However, this general rule is firmly within the discretion of the court to award, and is subject to further restrictions in order to adjust to the specific circumstances of the parties.

Factors affecting Rental Credit Awards:

To the extent  a rental credit may be awarded, it is limited by the amount in which the dispossessed spouse had a personal or financial interest in the property.  In Lee v. Lee, this caveat allowed a Wife who used premarital funds to buy and eventually re-finance the marital home to undermine her Husband’s interest in the home, and therefore whether the amount of rental credit due, if any.

Another central factor in determining the amount of credit is the period of time the spouse was dispossessed and the other spouse was in possession (actual or constructive), of the property.

Additionally, the credit is subject to an allocation for any expenditures made by the possessing spouse in order to maintain the property on behalf of both spouses. This includes repairs or any contributions towards mortgage and tax obligations for the home.

Another crucial factor requires that the party have an actual right to be physically present in the home. Regardless of legal title, if one party has been excluded from the home pursuant to a PFA Order, the court ruled in Lee that they are not entitled to a rental credit for the time the Order has excluded them, regardless of whether or not they were already dispossessed prior to the issuance of the Order.

Again, this is a circumstance-specific analysis, and one party’s superior financial obligations will not necessarily support a rental credit award.  In Schneeman v. Schneeman, the court denied a credit notwithstanding that the dispossessed spouse paid the mortgage, insurance, and taxes.  This is because the possessive spouse received a deviated amount of spousal support during this period, which the court considered an indirect contribution to the expenses.  In Lee, the court viewed the fact that the Wife initially urged the Husband to vacate the premises sooner rather than later weighed in favor of granting the husband a rental credit.

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What about other people living in the house with my spouse?

As a rule, no rental credit will be awarded when a minor child is living in the marital home. The general rental credit rule, however, has interesting effects in practice when the court considers the relevance of other solvent adults- typically the parties’ adult children- living in the marital property.     Judge will look at the specific facts when considering whether a non-resident party is entitled to a credit for allowing the parties’ adult children to live in marital rental property.   The surrounding circumstances of the litigation must support a credit considering the relative economic positions of the parties, and courts may not be inclined to allow the credit absent a showing of need or extenuating circumstances. Continue reading

Is there something I can do to move my divorce along? 

This is a question asked frequently when a divorce is dragging on.  Divorces can be drawn out  because the parties are unable to reach agreement,  because of  prolonged litigation,  because one party refuses to “come to the table,”  or for numerous other reasons.   When this happens it can feel very unfair for either or both parties.  We have heard it described as “being held hostage in a dead marriage.”   If the animosity between the parents continues unabated for a long period of time  the prolonged process  also can have a detrimental impact on children.

The Pennsylvania Divorce Code  provides relief in such circumstances, allowing spouses to get divorced without final resolution of all property issues.  The procedure is called a “bifurcated divorce.”   The bifurcation process  allows parties to  get divorced, move on and re-marry if they wish, while the economic issues  of the marriage are pending.    Protections for the dependent spouse and minor children must be in place until the case is fully resolved.

Bifurcation is considered an unusual proceeding, and can be granted only upon Order of Court.  A judge makes the final determination to grant a bifurcation, and does not have to agree even if both parties want the divorce before they distribute all of their assets and liabilities.   Continue reading

Do we have to work together?                                  

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This is a good question asked by many.   The marital home usually is a significant part of your total marital estate. For most couples, Husband and Wife hold the mortgage and the deed to the marital jointly.     The issue of removing one party from the mortgage (and later the deed) for most clients arises when one spouse has moved out of the house, and the other spouse is living in the marital residence.   The resident spouse likely is responsible for paying the mortgage.   The no longer resident spouse now wishes to be removed from the mortgage and the responsibility for the payments because he/she no longer lives in the home. However, as long as both spouses maintain a financial interest in the equity in the home, responsibility for the mortgage cannot be relieved.    Thus, it is important to monitor payment of the mortgage to ensure that the responsible party is keeping up with payments.   If the mortgage falls behind, the non-resident spouse can reserve the option of taking over payments, and seeking reimbursement for those payments at the time of equitable distribution of the full marital estate.

Lenders require proof of property settlement before a re-finance

Marital property or the marital estate includes all property acquired by either party during the marriage until time of separation. increases in value of certain non-marital property also may be part of the marital estate, but the rules regarding this are beyond the scope of this this entry. It is important to know what constitutes your marital estate because that is the whole of what gets divided subject to the Pennsylvania laws of equitable distribution.

There are different types of assets that fall into the general category of marital estate. Broadly these assets are: Financial this includes financial assets such as bank accounts, investments, such as stock and bond holdings; Personal Property such as, furniture, art, cars, and yes, pets; Real Property such as the family home any vacation home, time share or investment property; Retirement Benefits such as, a pension, IRA, 401Ks, profit sharing plan or any other deferred compensation plans;  and Business Interests

In Pennsylvania, as in most states, assets are divided equitably, which means in a fair manner. This could mean fifty/fifty (50/50), but not always. Depending upon the circumstances, one spouse may get a slightly different percentage, such as 55/45% or 60/40% . A range of circumstances determine the percentage proportion of equitable division.

Alcohol and/or other substance abuse is a known factor in many domestic relations cases. If one party drinks to excess, or uses drugs it can have an significant impact on the marital relationship and on the children. Tensions build, it can lead to secrecy, alienation, breakdown in communication; there may be episodes of violence, the substance abuse may lead to economic problems if it impacts ability to work or sustain a job, and it causes numerous other problems. Oftentimes, the effects of substance abuse on a relationship take years to manifest because one or both parties may be in denial.

A happy, successful, outwardly stable family can become unstable through the pain of alcoholism. Regardless of what triggers the alcoholism, if this is a factor in your family dynamic, it is important to acknowledge it.

The Pennsylvania Courts take substance abuse very seriously. Because the best interests of the children are primary, Courts carefully will consider evidence of substance abuse in any custody determination. If there is any concern that the health or welfare of a child is endangered by being in the custody a parent who is an alcoholic or substance abuser, primary physical custody could be granted to the other parent , and the substance using parent might be denied physical custody or granted limited supervised partial custody.

Living Together Living Separately

Under section 3301 (d) of the Pennsylvania Divorce law a couple may have grounds for divorce if they “have lived separate and apart for a period of two years and the marriage is irretrievably broken…” What does this mean?

For many people who have been living together, but apart, for various reasons, the good news is that you do NOT have to be living in separate residences. In these times of economic difficulty it may not be feasible for couples to support two households while contemplating divorce, so one spouse may move to another part of the marital home. I have clients who have been living under the same roof, but basically as “room-370625_torn_paper_2.jpgmates” for years. In another case a couple lived separately for over four years, but the husband came back and forth to the marital residence at will. The wife believed fully they were not separated and this was a temporary situation; the husband asserted that the separation began when he first moved out. Since substantial assets were at stake based upon date of separation, and the parties could not agree, the matter went to litigation on this issue.