Divorce and Family Law Office of Joanne Kleiner

Divorce Lawyer Joanne Kleiner

property division

Mar 15

Take Care if You Are Involved in a Divorce Just Before or After Retirement

Crossword with IRA 401K

According to statistics, the rate of divorce among older Americans has more than doubled in the last 20 years. Even though these proceedings seldom involve disputes over child custody, visitation and child support, there can be other factors that make elder divorce proceedings complicated and time-consuming, such as the increased size of the marital estates and the allocation of retirement assets.

It’s Mostly in the Details

A primary concern in elder divorce cases involves the marital home. There may be substantial equity in the property, money that may be a key component of your retirement planning. When you divorce, one option may be to sell the home and split the proceeds. There are, however, potentially adverse tax consequences to this approach. Take the time to discuss the matter with your tax adviser and your lawyer before you do anything.

Whether you have already retired and have substantial retirement plan assets and are at or near the end of your working life, you need to be extremely careful how you divide retirement or pension plan assets. If you have an IRA, you can usually split the value and transfer a portion of the funds over into a new IRA without any adverse tax consequences. However, if you have a 401(k), 403(b), or other qualified plan, you’ll want a Qualified Domestic Relations Order (QDRO) or you will likely have a tax consequence on the transfer.

It’s also important to review your life insurance coverage as part of a late-in-life divorce. If you own the policy, you will need to designate a new beneficiary.

Contact Us

At the office of Joanne E. Kleiner & Associates, 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.

Dec 15

Divorce and Selling Your Home in Pennsylvania

Selling the Marital Home in a Pennsylvania Divorced

Snow covered homeWhen it comes to dividing marital assets in a divorce, one of the most difficult items to allocate is the marital home. It’s customarily the single largest marital asset and cannot be meaningful divided between the parties. You may agree to have one party remain in the house and offset the value of the real estate by giving the other party a greater share of the remaining assets. The most common way to resolve the issue, though, is to sell the marital home. Here are some things to consider.

The Costs of Selling the Home

Ideally, you’ll be able to sell the house for more than the amount owed, so you should have some type of profit. However, there will also be costs associated with the sale of the home, including an agent/broker fee, closing costs, appraisal fees and the costs of a survey. You may be able to get the buyer to assume some of those costs, or you can have those costs taken from the proceeds of the sale.

Don’t Try to Sell the Home on Your Own

If you have some business savvy, this can often be a good idea—but not when you are in the middle of a divorce. You won’t be able to focus appropriate attention on all the details and you may end up selling for less that the property is worth. In addition, an agent will help you determine the best price at which to sell, so you don’t have to bicker about the asking price. Another advantage of an agent—they may be willing to “stage” the house, so you don’t have to determine who will prepare the house for sale.

Agree How Proceeds Will Be Divided before You Sell

This is something that should be worked out by your divorce attorney. Make certain before you sell that you know exactly how any net proceeds will be allocated. Be sure to include reimbursement of costs or additional payments.

Contact Attorney Joanne E. Kleiner

Let us help you protect your rights. Send us an email or call us at 215-886-1266 to schedule a confidential consultation. We will help you stay focused on the issues that matter.

Nov 16

What Is Separate Property?

In a Divorce, What is “Separate Property”?

Signing divorce documentsPennsylvania is what is known as a equitable distribution state with respect to the division of marital debts and assets. Essentially, that means that the court will attempt to allocate assets and liabilities based on what it determines to be fair—although it’s important to understand that “fair” does not necessarily mean “equal.” If at all possible, it’s always best for the parties to mutually agree on the distribution of property and debt. If, however, there has been fraud or misrepresentation, duress or undue influence, it may not be possible for the parties to resolve property issues without the intervention of the court.

If the court has to get involved, the judge will typically start by determining whether an asset is marital property, subject to equitable distribution, or whether it is “separate” property, to be returned to the party who brought it into the marriage. Separate property customarily includes:

  • All assets acquired (fully paid off) before the marriage
  • Any property obtained after separation (unless obtained with marital assets)
  • Any property identified as separate property in a valid prenuptial agreement
  • All inheritances or gifts received during the marriage

Though property obtained before the date of the marriage is considered separate property, any increase in the value of that property during the marriage is a marital asset. For example, real estate brought into the marriage (fully paid for before the marriage) is a separate asset to be returned to the party who owned it at the time of the marriage. Any appreciation in the value of the real property, though, is subject to equitable distribution. In addition, if you purchase a marital asset (car, home, household items) during the marriage, even with funds obtained before the marriage, it can be considered marital property, subject to equitable distribution.

Contact Us

At the office of Joanne E. Kleiner & Associates, 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.

Oct 01, 2015

Dividing Retirement Plans in a Divorce

How Are Retirement Plans Divided in a Divorce?

It’s not unusual—you’ve been married for decades, raised your children to be adults, and then the marriage falls apart. You may both have worked and contributed to retirement plans, or there may have been a stay-at-home parent who now faces retirement. How will the court typically divide accumulated retirement assets?

The first and most important thing to understand is that the court will only concern itself with retirement assets that were accumulated or acquired during the time the parties were married. Any retirement accounts that were brought into the marriage will be considered separate property. At a minimum, contributions made before marriage will not be subject to division in a divorce, nor will contributions made after legal separation.

Determine the Type of Plan

How retirement assets will be divided will depend in part on whether the plan was a defined contribution plan or a defined benefit plan. With a defined contribution plan, such as an IRA, 401(k) or profit-sharing plan, the participant controls how much is put into the plan, but the amount of the payout depends on the performance of the investments into which the money was placed. With a defined benefit plan, the participant typically receives a fixed benefit based on a formula, which usually factors in earnings and years of service. Employers typically fund defined benefit plans, whereas defined contribution plans are often funded by the employee, with some level of matching funds contributed by the employer.

Identify When the Plan Was Initiated

If the plan was started before you were married, there will likely be a component that is separate property (the value before your marriage) and a component that is “co-mingled”—the increase in value, both from growth and new contributions, during your marriage. Any growth or contributions after the legal date of separation will also be considered separate property.

What is the Value of the Plan?

It’s customarily advisable to have an expert do a valuation of the plan, particularly when you don’t anticipate using it for some period of time. Typically, a defined benefit plan will be easier to value than a defined contribution plan.

How Will Assets Be Divided?

Once the value is determined, the court will attempt to ensure that both parties receive an equitable distribution of the retirement plan value. The courts prefer, if possible, to use an offset to accomplish a fair distribution, giving one party other assets to offset their interest in the retirement plan. For example, a non-working spouse may receive the house and some other property to offset allowing the working spouse to retain all retirement benefits.

If the court cannot find a way to offset the value in the retirement plan, it will typically enter an order that is binding on the company administering the retirement plan, indicating how the retirement assets will be divided. This order is known as a Qualified Domestic Relations Order, or QDRO.

Contact the Law Office of Joanne E. Kleiner & Associates

For an appointment, contact our office online or call us at 215-886-1266. Let us use our experience, skill, knowledge and resources to help you make informed and effective decisions.

Jun 10

Dividing a Family Business in a Divorce

Dividing Family Business Can Be Painful, Difficult

Small family businessAccording to a recent census report, there are almost four million businesses in the United States that are jointly owned by husband and wife. In those states with community property laws, it has been common for courts to hold that the business of either spouse is community property, and must be divided equally. As more and more women are building and running successful businesses, courts are ruling that they must share the proceeds of their success in a divorce.

Legal and financial experts say that, particularly when the parties to a marriage already have their own business, a “business prenuptial agreement” is the best way to avoid potential problems. Many, however, say that business interests should now routinely be addressed in a prenuptial agreement. With a valid prenuptial agreement, a party to divorce need not worry about the loss of value in a business upon divorce.

Without a valid prenup, though, the inclination is almost always to resolve the problem of dividing the business by having one spouse buy out the other spouse. The challenge with that option, though, is how to determine the buyout price. Legal experts recommend that parties have a professional valuation of the business–each party can have his or her own valuation done, or they can agree on a third party business valuation expert. In many instances, once the value of the business is determined (and agreed upon), the parties can complete a buyout without an exchange of cash by allocating other marital assets accordingly. If the other marital assets are insufficient to compensate a party for the buyout, payments may be set up on an installment basis, or (worst-case scenario), the business may have to be sold, with the proceeds divided accordingly.

Contact Our Office

Let us help you successfully resolve your family law problems. To schedule an appointment with an experienced Pennsylvania family law attorney, contact our office online or call us at 215-886-1266.