INDUSTRY INSIGHT
FAMILY LAW
SPONSORED CONTENT
The idea of getting divorced can instill fear in many . Figuring out what your financial future will look like post-divorce can be downright frightening and way out of your comfort zone . This fear comes from the unknown , so it is best to be prepared and know your options .
In Pennsylvania , the law of dividing up marital assets and debts is known as “ equitable distribution .” Any assets acquired or debts accrued during the marriage are considered marital , with some exceptions . A court will look at 11 factors set out in the statute to determine who gets what , which include ( but is not limited to ): the length of the marriage ; the age , health and employability of each spouse ; the contribution of one spouse to the education and increased earning power of the other ; whether a spouse will serve as custodian to dependent , minor children ; and the standard of living of the parties established during the marriage . There is no formula , but as a practical matter , oftentimes the court will end up divvying up the marital estate in percentages based on how that judge interprets the law and weighs the factors from the statute .
It is important to consider pre-marital assets , and obtaining date of marriage balances on those assets , since they are excluded from equitable distribution but the appreciation on those assets is marital . We most commonly see this with retirement accounts and pensions . For example , if you have been married for 10 years but were working 10 years prior to that , the law does not require you to share your entire retirement , only the marital portion and appreciation on the pre-marital portion . Another component in equitable distribution is the date of your separation . This date can mean that a proverbial line in the sand is drawn and no assets acquired or debts accrued after this date are subject to division .
Depending on which side you are on , this can be very meaningful , if there is an expectation of a nice asset in the
DIVIDING UP THE MARITAL PIE IN DIVORCE
www . mcmorrowlaw . com
future or merely to “ stop the bleeding ” from a spouse who loves to spend .
Do not get too hung up on how assets and debts are titled . Even if it is in individual name it may very well be considered a marital asset ( with few exceptions ). The same goes for debts in that if you or your spouse accrued debts like student loans , mortgages , credit card debt and the like , it doesn ’ t matter whose name it is in . If someone has a lot of marital debt in his or her name alone , he or she may have to keep it but the court will likely award more assets to offset it so it is equitable . Many worry that their retirements cannot be split since they are in individual name , but indeed , they can and should be done in a specific way to avoid any taxes or early withdrawal penalties .
If you own a home with your spouse , a court can also factor in what the costs of transferring ownership of the home would be regardless of whether you sell or one spouse refinances the home . The same goes for taxable accounts and retirement accounts . The court can take into consideration any tax consequences of selling investments or the cash value of a retirement account .
When considering divorce , consider your options for what process you want to use . You may want to use the litigation process and have a judge decide , or stay out of court ( and the price tag that goes with it ) and choose another process like Collaborative Divorce or Mediation . Being prepared is empowering , which is key when you are going through a major life transition like divorce .
This Industry Insight was written by Brooke B . McMorrow .
Attorney Brooke McMorrow is the founding member and Managing Attorney of McMorrow Law , LLC , located in Wexford . McMorrow Law focuses on family law matters such as divorce , custody , child support , guardianship , estate planning , and probate / estate administration in Pittsburgh and the surrounding counties . Attorney McMorrow is collaboratively trained and a certified mediator . She is also a founding member of Collaborative Solutions North . She is licensed to practice in Pennsylvania and New York . For a free initial consultation call 724.940.0100 or visit the website at www . mcmorrowlaw . com .
North Allegheny | Spring 2017 | icmags . com 27