Law Office of Joanne Kleiner

Divorce

Mar 08

The principle of equitable distribution in a Pennsylvania divorce

The Principle of Equitable Distribution in a Pennsylvania Divorce

Common law property states are those that recognize equitable distribution, and Pennsylvania is one of them. With equitable distribution, factors like separate property are considered, and it may also make a difference which of the partners filed for divorce.

There’s a Difference Between What’s Equal and What’s Equitable

Equitable distribution doesn’t mean equal division. Unlike community property states, you’re not going to split everything straight down the middle. Rather, equitable distribution takes the circumstances of both parties into consideration in an attempt to give each person what they need.

There are only nine states in the U.S. that use community property rules, which is the alternative to equitable distribution. In these states, the property is divided as equally as possible without taking into account the amount that each party contributed throughout the marriage.

What Happens in the Process of Equitable Distribution?

With equitable distribution, the process of dividing up your marital property is handled much more delicately by the courts than with community property division. The principles of equitable distribution give weight to what each spouse needs and what kind of means they’re working with after the divorce.

One common situation that comes up with equitable distribution is when one party has ended a career so that they could remain at home and look after the kids. After their marriage has ended, there’s a good chance that they’ll have a harder time supporting themselves financially, so it’s possible that a court may find that this spouse should get a bigger portion of their marital property.

The Process May Be Collaborative or Done Through Your Attorneys

Couples who are getting divorced have the chance to work out how to divide their marital property prior to court intervention in an equitable distribution state like Pennsylvania. This is comparable to how things work in community property states. Keep in mind, though, that whatever the couple decides is still subject to approval from the court.

Sometimes, this process might be done through the spouses’ divorce lawyers. But if both parties are willing and able to work together, it may be done in a collaborative environment. In the event that the couple isn’t able to come to some form of agreement in time, a resolution may be made at the court’s discretion. However, this still must be done within the state marital property law parameters, and a divorce lawyer can provide you with more information about what that might entail.

What Are Some Considerations for Equitable Distribution?

Some of the factors that are considered in equitable distribution include how long the marriage lasted, the spouse who has primary custody of any children who are still minors, and what the financial needs of both spouses are. Courts will also factor in the liabilities that each party has, both presently and going forward. One common example of this is when one person needs to pay for schooling to get their degree in order to make enough money to live on.

Any pensions earned by either party are also taken into consideration with equitable distribution as well as how much was contributed by each of the spouses to the total of their accumulated marital property. Courts will look at things like the individuals’ health, age and special needs along with any child or spousal support obligations that either one of them has to keep up with from previous relationships.

The marital misconduct of either spouse can also come up in equitable distribution. This may encompass any behavior from extramarital affairs, domestic violence or debts that were racked up from gambling.

Of these myriad factors that come into play with equitable distribution, one element that gets excluded from the considerations is premarital property because any personal property that was acquired prior to the marriage doesn’t count towards a marital estate.

If you’re dealing with a divorce in the Jenkintown area, call the Law Office of Joanne Kleiner today at 215-886-1266, and we’ll answer any questions that you might have about marital property and equitable distribution.

Mar 04

Divorce and Social Security retirement benefits

Everything You Should Know About Divorce and Social Security Benefits

Each year, roughly 50 million people collect retirement benefits from Social Security. Since these funds are such a big part of most retirement plans, it’s worthwhile to consider them in your divorce. Understanding how divorce impacts Social Security makes it easier to create smart financial arrangements.

Can You Collect Spousal Benefits After a Divorce?

The most important thing to know is that divorce doesn’t change most of the basic Social Security rules. As long as you were married for at least 10 years and have not remarried, you can collect your Social Security spousal benefits just like you normally would. Because the funds that go into Social Security are part of your joint household effort, you are still entitled to receive the benefits after you divorce.

Just like married couples, you can collect up to 50% of the amount of Social Security your ex is eligible for. Your ex cannot keep you from withdrawing benefits based on their Social Security, and the benefits that you collect won’t affect any payments to your ex or anyone they choose to marry. However, you’ll still need to follow the typical eligibility requirements associated with Social Security withdrawals. The process can be confusing, so if you have questions about your Social Security benefits, your Pennsylvania divorce lawyer may be able to help.

Eligibility Details for Ex-spouses

If you meet the main requirement of having been married for at least 10 years and not remarrying, you’ll be able to withdraw from Social Security once a few other eligibility rules are met. First of all, your ex-spouse needs to be able to collect their Social Security funds. They don’t have to be withdrawing benefits yet, but they have to be old enough to withdraw their benefits. If your ex-spouse is eligible to withdraw benefits but has not started withdrawing them yet, you need to be divorced for at least two years.

The other key eligibility detail is that you have to be eligible for Social Security payments. This will mean you need to be at least 62 years old. Keep in mind that your payments will vary depending on how soon you start withdrawing. People who wait until the full retirement age to withdraw will get higher payments. Depending on when you choose to begin collecting benefits, you will get between 32.5% to 50% of the amount your ex gets.

Finally, it’s important to recognize that your own Social Security benefits may impact your ability to withdraw based on your ex’s Social Security. No one is eligible to withdraw two separate Social Security payments. Instead, Social Security will look at all benefits you’re eligible for and only pay you the highest amount. So if your solo benefits are higher than the spousal benefits you get through your ex, you will only get your solo Social Security benefits.

Will Social Security Affect Your Divorce?

Keep in mind that Social Security is different from most other retirement details. Unlike a 401(k), your divorce lawyer doesn’t need to negotiate Social Security withdrawals during your divorce mediation. You don’t need your ex’s permission to get Social Security, and the number of benefits you get won’t affect their withdrawals at all. The government won’t even notify them when you begin withdrawing your spousal benefits.

However, this doesn’t mean you should entirely forget about Social Security during your divorce. Pennsylvania law is all about finding a fair, equitable distribution of assets during divorce. If one spouse is entitled to more Social Security retirement benefits than the other, a 50/50 asset split isn’t always fair. This type of division could mean that one person ends up with a lot more money when they retire. In these cases, your lawyer might be able to help you reach an arrangement where you get additional assets to compensate for your lack of Social Security.

If you have any other questions about divorce and retirement benefits, Joanne Kleiner is here to help. We can assist you in negotiations or mediation and finding a solution that suits everyone’s needs. To learn more about our legal services, fill out our contact form or call us at 215-886-1266

Feb 11

Some tax matters associated with divorce

Common Changes to Filing Taxes Following a Divorce

Numerous issues related to your divorce can alter the amount of taxes you pay each year. There were 630,000 divorces in 2020, most of which resulted in both spouses needing to make changes to the way they file taxes. While alimony payments and child custody arrangements must be considered, some tax breaks might be available.

How Your Filing Status Changes

The marital status you have on December 31 determines what your tax filing status will be for that tax year. If the divorce hasn’t been finalized by the end of the year, a joint return can still be filed, saving you money when you file your return. You could also file with the “married but filing separately” status.

If you haven’t lived with your spouse for the final six months of the tax year, are filing separate returns, have paid over half of the home’s upkeep, and have had a dependent living in your home for over half of the year, you could file as head of the household, which allows for a larger standard deduction. In addition, after your divorce has been finalized, you could file as a single taxpayer or as head of household.

Alimony Payments

You might deduct your alimony payments if a divorce agreement was finalized before January 1, 2019. However, the spouse who receives these payments must include them as taxable income. As a result of the changes to the Internal Revenue Code contained in the Tax Cuts and Jobs Act of 2017, alimony can’t be deducted if the marriage was finalized on or after that date.

Child Tax Credits and Medical Expenses

The child tax credit can only be claimed by the custodial parent, the parent that the kids live with for most of the year. So when filing your 2022 taxes, the child tax credit amounts to $2,000 for every child who is 16 years old or younger.

If you have children older than 16, they may qualify for a dependent tax credit, which amounts to as much as $500 for every qualifying child. The noncustodial parent could claim this credit if the custodial parent doesn’t want to.

However, the custodial parent must sign a waiver stating they won’t claim the exemption. IRS Form 8332 is the one that the custodial parent must sign. It must also be submitted with the noncustodial parent’s tax return each year.

If you’re paying your child’s medical bills following a divorce, these costs can be included as medical expense deductions. This credit is available even when your ex-spouse has custody of your child. Medical expenses are considered deductible only if they exceed 7.5% of your adjusted gross income. Any other bills paid for the child can push costs over this threshold.

How Home Sales are Impacted

If you and your spouse have decided to sell your home, the date the sale takes place dictates what happens with your taxes. In most cases, the Internal Revenue Code allows individuals to avoid paying taxes on the initial $250,000 of profits following the sale of a home if the home has been owned and lived in for at least two out of the previous five years.

A married couple filing jointly can obtain an exclusion of as much as $500,000. In addition, a spouse can exclude $250,000 in gains on individual returns if the sale takes place after the divorce. However, if the two out of five-year test hasn’t been met, the exclusion is lowered and depends on how much time you spend at home.

If you have lived in the home for just one of the two previous years, $125,000 of gain can be excluded. If you’re about to seek a divorce and want to know how your tax situation will change, contact our New Jersey divorce lawyer.

Can You Deduct Your Legal Fees When Filing Taxes?

It’s usually impossible to deduct legal expenses after filing for a divorce. These expenses include everything from litigation to tax advice. Any payments could be subject to a gift tax if no legal responsibility has arisen due to the divorce settlement.

When you are considering filing for a divorce and want to make sure that you understand every facet of what this process entails, call our divorce lawyers today at (215) 886-1266 to schedule an appointment.

Dec 13

7 Reasons Why Women Are More Likely to Initiate Divorce

The divorce rate for first marriages in the United States remains at a high level, and more than two-thirds of those divorces are initiated by women. There are several reasons why women are more likely than men to initiate a divorce and why working with a divorce lawyer can help to secure a comfortable future.

1. Lower Marriage Satisfaction

Although some women want to enter marriage more than men, once they are married, they might be less likely to be satisfied. Low marriage satisfaction involves many factors, including a lack of respect, insufficient trust, a decrease in shared interests, different political ideologies, poor emotional connection, and not enough affection. Incompatibility also plays a role in marital dissatisfaction. Women tend to want compatibility on more of life’s important issues than men.

2. Less Financial Harm Than Expected

In previous generations, few women worked after marriage. This is no longer the case. Today, divorce causes less financial harm to women than they might expect. While women on average still earn less than men, even in the same career or job, they are less likely to be in dire financial straits after a divorce than they were decades ago. Increasing educational levels and a greater number of women in the workforce mean that a divorced woman can provide for herself in many cases.

3. Reduced Reliance on Men

Women no longer have to rely on men for access to resources. When looking at human evolution, females tended to stay closer to home, tend to the children, gather nearby food and water, and handle the domesticated animals while males traveled a greater distance to hunt and secure other resources. Today, women have more access to resources. Laws passed in the last century allow women to have a bank account and credit card without a man’s permission. Women can also sign a lease, buy a home, and take out a loan without a male co-signer.

4. More Self-awareness

Past generations of women were taught to cater to the needs of men. This started from a young age when girls had to serve their brothers or father at home. Today, more women are taught to be self-reliant and self-aware. This greater sense of independence means women aren’t as afraid to be divorced.

5. Social Changes

Society doesn’t look down on divorced women like it used to. Birth control and access to education have allowed women to take charge of their futures. These social changes reduce the guilt that women feel for wanting out of their marriages.

6. Mismatch in Marriage Benefits

Heterosexual marriage remains a gendered institution. After a man and woman get married, the man reaps more benefits than the woman. Social expectations typically result in married women doing more hours per week of household chores and childcare than married men, even if both partners have full-time jobs. This often leads to a buildup of stress, frustration, and resentment that eats away at the core of the marriage.

7. Out-of-court Options

Today’s divorce process offers more out-of-court settlement options compared to what women could access a generation ago. It is often no longer necessary for a divorce lawyer to litigate a case in court. By choosing other options, such as mediation or collaborative law, women can keep their personal business out of the public’s eye. These alternatives can cost less, require less time, and help to improve communication for future co-parenting and other needs.

When you’re considering a divorce, a no-court option may be a helpful solution. Staying out of court takes some of the stress out of the process and may help you set up a collaborative communication system for the future. Consulting with divorce lawyer Joanne Kleiner provides you with information about your rights and how Pennsylvania divorce cases work so that you can make an informed decision about how to move forward. To make an appointment, call the Law Office of Joanne Kleiner in Jenkintown, Pennsylvania at (215) 886-1266. You may also request a consultation by completing our contact form, and an associate from our office will reach out to you.

Dec 07

The Role Of A Financial Neutral

What Does a Financial Neutral Do in a Divorce?

Debt and disagreements over money and assets are major sources of contention in many divorces in the United States. An estimated 54% of Americans believe that debt is a solid reason to divorce, and 35% of Americans say that finances are the leading cause of stress in their marriages. If your marriage has come to an end, working with a financial neutral in addition to a divorce lawyer could help you set up a more secure and less stressful future.

What Is a Financial Neutral?

A financial neutral is an independent, third-party expert or professional who focuses on the financial aspects of a divorce. They do not represent either of the spouses and thus does not advocate for one party or the other. If there is future litigation, neither party can contract with the financial neutral for future representation. The financial neutral may be retained by the divorce lawyer or by the couple if they both agree to the collaborative process.

What Are the Qualifications of a Financial Neutral?

The qualifications for a financial neutral encompass a wide range of degrees, certifications, and experience. Some of the certifications held by financial neutrals include certified public accountant, business appraiser, certified fraud examiner, certified divorce financial analyst, or certified financial planner. Most financial neutrals participate in many hours of annual continuing education in order to maintain their license to practice accounting and to maintain their certifications. A financial neutral usually holds a bachelor’s or master’s degree in business, finance, accounting, or a related field of expertise.

Which Services Can a Financial Neutral Provide?

During a collaborative divorce, these professionals focus on the financial aspects of the divorce. Their role often begins with information gathering. They may gather information from both parties. The financial neutral usually asks for documentation of income, debt, retirement savings, taxes, bank accounts, investments, and other assets and liabilities. They do not duplicate the efforts of the divorce attorney. The financial neutral provides copies of information to both parties as requested by the attorneys. After reviewing what both parties provide, the financial neutral may identify missing documents and overlooked debts or assets and request them before the divorce process can proceed.

How Does a Financial Neutral Participate in a Collaborative Divorce Process?

A financial neutral meets with spouses on an individual basis as well as during joint sessions. The spouses’ respective family law attorneys are usually present during joint meetings in order to represent the best interests of their clients. If one spouse plans to request spousal or child support, the financial neutral participates by creating budgets for one or both parties. They may also perform cash flow analyses for each spouse in consideration of what their post-divorce financial futures will look like.

Who Would Benefit From Working With a Financial Neutral?

Any divorcing couple in disagreement over the distribution of assets would benefit from working with a financial neutral. Divorcing spouses who do not have any major areas of contention may also benefit from working with the financial neutral in order to have a more clear picture of their finances after the divorce. A spouse who earns significantly less than the other may wish to work with a financial neutral in order to make a support request that is likely to be agreed to out of court.

If you’re facing a complicated financial future, a consultation with our divorce lawyer gives you insight into structuring a fair settlement and helps you understand more about your financial future. To learn more information about the impact of a divorce on your finances and the role of a financial neutral in the divorce process, arrange a consultation with the Law Office of Joanne Kleiner in Jenkintown, Pennsylvania. Contact our office by phone at (215) 886-1266, or fill out and submit our online form to make an appointment.