Law Office of Joanne Kleiner

division of marital property

Dec 18, 2017

Should You Keep the House in Divorce?

Divorce represents a major change for you as well as your family members that are all living under one roof. When you and your partner decide to separate or officially file divorce proceedings, critical questions will arise about what you should do with the family home. Determining what to do with the family home includes a careful consideration of numerous different factors.

You may wish to receive the home as the division of property. However, as an illiquid asset, it can be difficult to receive the cash from this home. Furthermore, the memories inside the home may be difficult for you to cope with, although it may be in the best interest of the children to keep the family home stable.

The residence, which can be a home, condominium or apartment, is usually the biggest marital asset and the decision about whether or not to remain in the home is based on emotions and financial reasons. It may be difficult for you to keep this in perspective and make a beneficial and sound decision that requires you to consider every issue that you face associated with this asset. You need to start with an income and expense statement that is accurate as well as a cash flow projection.

There are three primary issues associated with your decision to stay in the house. You can choose to put the residence on the market and sell it, hold on the to the house or keep it and agree to sell it at a later date, distributing the proceeds equally.

At time neither spouse has the financial means to keep the house due to limited income and assets. Putting the house on the market for sale can create cash flow and provide an easy way to divide marital assets. If the spouses have other assets, splitting the marital assets may be easier because the value of the house equity could be offset by the spouse’s other assets.

This allocation enables one spouse to remain in the house. The question is whether or not you can afford the upkeep and payments. It is recommended you keep your housing expenses between 30% and 36% of your total income. You should have appropriate income and other sources so you can pay all of your housing costs. If you could afford to keep the house then ask yourself whether or not it makes sense financially to keep it. Often, it is more sensible to rent a home because of tax deductible expenses.

It makes economic sense to buy when compared with rent because the future appreciation of the asset and tax-deductible expenses. However, liquid securities appreciate much more quickly than real estate. Housing declines in recent years have been abundant so it may be a concern about whether or not it makes sense for you to keep the home as a desirable asset.

There may be other reasons you wish to keep the house. Divorcing couples may wish to keep some stability in the children’s lives and therefore keep the home to minimize problems for the children. Both parties may agree to do this for a defined period of time after which they will sell the home and distribute the equity based on a previous agreement.

You must consider the value of the home equity in the divorce degree. Valuing equity in a home is not easy and you can adjust the equity value today based on its current fair market value. At the expiration of such a term, the equity value will be split between two parties.

Furthermore, the equity could be set as a percentage of the future fair market value to later be allocated between the spouses. It may be concerning for you to keep the house and worry about working with your spouse later on to come to agreeable terms so therefore you may wish to instead plan to sell the house now so you do not have to deal with this issue in the future. Scheduling a consultation with a knowledgeable Jenkintown, PA divorce and family law lawyer can help you in these difficult circumstances so you have a path charted forward.

CONTACT US

At the Law Office of Joanne E. Kleiner, we have more than 25 years of family law experience. We’ll help you stay focused on what matters. To schedule an appointment with an experienced Pennsylvania divorce attorney, contact our office online or call us at 215-886-1266.

Nov 21, 2017

PA Divorce Tips: Should I Charge Rent to a Former Spouse?

Divorce Tips Lawyer | Jenkintown Divorce Lawyer

Trying to move out quickly and determine the best path forward for your family after deciding to get divorced is never easy. But what happens if a spouse whom you intend to divorce wants to stay in the family home at least for a certain period of time? The other party may be curious about whether or not they can charge rent to such a person and there are unique considerations that should all be evaluated by a divorce attorney in Pennsylvania if you have questions about this.

In certain situations, you may be eligible to charge rent to a person who intends to stay in the family home. The spouse that had to leave the home as the divorce proceeds may find themselves paying for the house even though they don’t live there anymore. This is why Pennsylvania courts have generally given credit for the fair rental value of marital property to the spouse that had to move against the spouse in possession during equitable distribution if the property is held jointly. The spouse in marital home must pay rent for the time he or she lives there exclusively.

Rental credits could be awarded is limited to the amount that the dispossessed person had a financial or personal interest in that same property. In one recent case, a wife that used premarital fund had to refinance her marital property to undermine the husband’s interest. A factor that determines credit applied to someone is the period of time that a spouse was out of the home and the time that the other spouse lived exclusively on the property.

Another critical factor of this determination is whether or not the party could rightfully be in the home. In some cases, one spouse has been banned from the home due to a court order and that person cannot receive credit for rent. This is based on circumstances and one that should be presented to your Pennsylvania divorce attorney early on in your case to learn more about how to protect yourself.

With many complex issues involved in the dissolution of the marriage, the particularly contentious one of division of property and who maintains the marital home can lead to further legal battles if you’re not careful. Thankfully hiring an experienced Pennsylvania divorce attorney can help you with the support you will need going forward as you deal with one of the most troubling and difficult times of your life.

A Jenkintown divorce attorney is an important asset to keep at your side for the duration of such a legal case because he or she can help you navigate obstacles and learn more about how to protect yourself and avoid common missteps. You need someone you can trust with such a confidential and emotional issue when determining to get a Pennsylvania divorce in Jenkintown or elsewhere in PA. Do not hesitate to hire a lawyer who is knowledgeable about the technical aspects of the law and one who makes you feel confident in the handling of your claim.

The most common reasons to consider this situation are that the other spouse has not had an opportunity to find housing yet and because you might want to make things seemingly more stable for the children rather than establishing separate households yet. While these are worthwhile issues to evaluate, make sure you see all aspects of keeping the spouse in the same house.

Another time when a rent situation may emerge is if the spouses own the house together and one moves out, but the other remains. Who pays the mortgage and picks up the bills can generate uncomfortable conversations if you don’t have a plan in mind.

CONTACT US

At the Law Office of Joanne E. Kleiner, we have more than 25 years of family law experience. We’ll help you stay focused on what matters. To schedule an appointment with an experienced Pennsylvania divorce attorney, contact our office online or call us at 215-886-1266.

Nov 12, 2017

Basics of Pennsylvania Divorce Property Division

 

Divorce Property Division Lawyer

Dividing the property an important consideration when a marriage ends. But before you or the courts decide how to divide the assets, you will need to determine the type and value any of the assets you acquired when you were married. Since property division will heavily influence your financial life after divorce, it’s worth talking things over with a lawyer and bringing a full list of your assets and liabilities that may be up for division.

Make sure that you understand your rights and responsibilities when doing so by hiring an experienced Pennsylvania divorce attorney to help walk you through the process and give you a better understanding of what is involved.

The first step you need to take involves the identification of property. You will need to create a list. Include everything because you can always remove items later. Your assets are tangible items including boats, homes, furniture, businesses, and collectibles. Furthermore, you might also wish to include intangible which include stock options, patents, bank accounts, retirement plans, copyrights, trusts and insurance policies.
You will need to then identify each the type of each asset. An asset will be classified as non-marital or marital.

The characterization of an asset plays a crucial role in diving and determining the value of the property in divorce. Marital assets in Pennsylvania include all assets acquired by either spouse during the marriage. Non-marital property includes assets either spouse had before the marriage, assets that are inherited or gifts, and those assets acquired after couple separated. The courts are authorized to distribute and divide marital property between the spouses in the divorce. Both spouses keep their separate property in the majority of cases.

The characterization of property is also impacted by when the couple separated. This is usually the date when the couple began to live separately. This means they do not present themselves as a couple. The spouses do not need to maintain separate households but it will be more challenging when settling the divorce case.

After you have identified the separation date, the next phase is to identify the dates that the assets were purchased. Property acquired before the marriage are considered separate property. If the spouse brought an item into the marriage, that item belongs to the spouse separately.

The next phase of this process is to identify what the assets are worth. This can be challenging as there are numerous different factors involved and you may wish to retain the services of a professional. Typically, courts will use the current assessment of the item at the time of the separation. The marital property could have another component that needs to be computed as it relates to comingled assets. You can deduct contributions from a separate party from current value and consider interest that could have accrued.
Divorcing couples will follow these steps to agree and decide how to split their property on their own but they might not be able to come to an agreement. This means it goes before a judge for consideration.
Courts in Pennsylvania consider numerous factors when deciding the division of the property, including each spouses’ needs, their vocational skills and job prospects, how long they were married, whether either spouse has been previously married, the spouse’s ability to obtain assets and earn income in the future, the standard of living enjoyed over the course of the marriage, and the amount and value of each spouse’s assets.
Courts do not consider marital misconduct in Pennsylvania but consulting with your experienced Pennsylvania divorce attorney can give you a better perspective on what is involved and how to best protect your interest

Mar 16, 2012

Division of Marital Property in Pennsylvania

Pennsylvania divorce law provides for the equitable division of marital property. Equitable division is based upon what is fair rather than on a straight equal division of property.

Generally, marital property is defined as the assets acquired during the marriage, although there are some exceptions, and marital assets may include:

  • Real property
  • Pensions
  • Retirement accounts
  • Business concerns
  • Stocks and bonds
  • Certificate of deposits
  • Bank accounts
  • Insurance policies
  • Other valuables such as vehicles, jewelry, etc.

Gifts and inheritances are typically excluded from the marital assets.

An experienced Pennsylvania family law attorney can help you ascertain what assets should be included and excluded from the marital estate. And when necessary, we can bring in experts such as forensic accountants and business valuators to help determine the value of assets.

The court considers several factors when determining the division of marital assets including:

  • Duration of the marriage
  • Spouses’ age, health, skills and employability
  • Contributions to the marriage (including from homemakers)
  • Spouses’ income sources
  • Tax liabilities for each spouse
  • Which spouse is the main caregiver of minor children
  • The earning capacity of each spouse
  • Alimony awards

In the case in which the parties cannot agree on marital property, the court will decide. Generally, the court cannot transfer a property title from one spouse to the other. However, it can award money to one party to compensate for the other party keeping property. When property was purchased with both marital and non – marital funds, the court determines what percentage of the property should be included in the marital estate and factors this into the monetary award.

Talk to a Pennsylvania property division attorney today

Determining the disposition of marital assets can be complex, and an experienced attorney can help you in sorting out your marital assets. Contact us online or call (215) 886-1266 to discuss your asset division matter today.