Thursday, June 28, 2012

Top 10 mistakes in Postnuptial/Marital Settlement Agreements

1. So-called “boilerplate language” is there for a reason.  Review and edit it as necessary.

Boilerplate language is typically standard language or paragraphs that are found in most, if not all, agreements of a particular type.  For example, boilerplate language may address what should happen if certain circumstances arise or where the proper jurisdiction is for any future litigation.  The boilerplate language also could provide certain disclosures that are necessary under the law.  Even though this language may seem to be irrelevant at the time of entering into the agreement, it adds an extra layer of protection if future problems arise.  Sometimes the presence of the language can make the difference betweem whether the agreement is valid or void.

2. Number the pages of the document and have the parties initial each page.

By numbering and initialing each page of the document, it greatly decreases an individual’s ability to contest the accuracy of the document in the future.  If each page is initialed, it is much harder, for example, for someone to argue that a page was taken out or inserted after the document was signed.

3. Include real deadlines for respective tasks and consequences for failing to meet those deadlines.

Specific deadlines can eliminate headaches.  After going through all of the trouble of negotiating an agreement, there is nothing worse than a resolution being delayed because one person is taking his or her time signing a crucial document or paying money.  By setting a deadline and consequences for missing those deadlines, you can avoid these problems.

4. Place custody and/or support terms in a separate stipulation and order that will be filed with the court so that these agreements can be enforced.

It is much easier to enforce a custody or support stipulation that is separate from a global divorce resolution.  Even though it seems easier to have everything in one agreement, it is easier for the courts to interpret, review and enforce custody and support agreements that are separate documents.

5. Agreements outside of the Property Settlement Agreement will not be honored.

In short, if you want a specific term of your agreement to be enforceable, you must make sure that the term is in writing in your Property Settlement Agreement.  Simply because you believe that you and your spouse agreed to something during negotiations does not mean that it is enforceable, unless the term makes it into the final, signed version of the agreement.

6. Do not use unclear or ambiguous language.  Someone who knows nothing about you or your case should understand the clear intent of the document.

The easier the document is to read and understand without have to talk to you, your spouse or one of your attorneys, the better.  Anyone should be able to pick up the document and understand what is supposed to be accomplished with the agreement.  No one should have to ask for more background information or an explanation of the facts.

7. Remember to include indemnifications for debt or Internal Revenue Service liabilities.

At the time that you are executing a settlement agreement, you may not even be considering future or past debts or obligations, especially if you have never had or do not know about problems at the time of entering into the agreement.  By making sure that standard indemnifications are in the agreement, you can protect yourself from problems that may arise.  On the other hand, if you know that problems exists, then these provisions are even more important to include and tailor to your specific situation.

8. Refinance debt out of joint names.

When your divorce is finalized, you do not want to jointly own or be liable for anything together with your spouse, if at all possible.  Pay off debt or have one party re-finance it into his or her own name.

9. Tie-up all loose ends, such as the arrangements for filing the tax return, splitting the refund or paying outstanding bills.

The more loose ends that you resolve prior to finalizing the divorce, the better off you will be.  Not only is it practically easier to deal with all of these issues as part of your settlement negotiations, but it also is emotionally and financially easier to try to resolve everything prior to resolving the divorce.  Again, at the end of the divorce, you want to be able to move forward without being entangled with your spouse or having to continue to negotiate lingering issues with him or her.

10. Never negotiate and/or waive rights to something that is enforceable (equitable distribution) for something that is subject to change (child support).

Child support is always modifiable.  No matter how many agreements or promises you make with your spouse, either party can petition the court to modify child support based on a change in circumstances.  However, you cannot go back and change a decision that you made when negotiating the equitable distribution.  For example, suppose you and your spouse agreed that he could keep all of his retirement funds, if he paid you X dollars a month in child support.  Then two years after you entered into the agreement, your spouse loses his job and gets a new job making half as much money.  Your spouse could petition for and likely be granted a reduced child support obligation, yet he still would be able to retain all of his retirement benefits.  Avoid this pitfall.

Written by Elizabeth A. Bokermann, Esquire and Linda A. Kerns, Esquire, attorneys at the Law Offices of Linda A. Kerns, LLC.

Tuesday, June 26, 2012

Helpful Tip Tuesday

Today is Tuesday and every Tuesday we like to post a tip that will help you to handle your legal issues.

Once you begin to contemplate divorce, you should start saving all of your financial statements, including bank, retirement and credit statements. The statements provide a valuable snapshot in history, and can become difficult and expensive to obtain in the future.

Friday, June 22, 2012

In New Jersey, can a child be UN - emancipated?

The answer: Yes - in some circumstances.

In a June 20, 2012, in a decision not approved for publication (which means it cannot be cited for precedential value, but it can give us guidance as to the court's thinking, the Superior Court, Appellate Division, of New Jersey explained that a child can, in fact, be unemancipated.

In Azimi v. McVeigh-Azimi, a Father petitioned to have his daughter emancipated after she graduated from high school.  Mother did not object and the petition was granted.  Mother did not appeal.  Later, Mother filed a motion requesting that Father's support be paid through wage attachment and that Father contribute to the daughter's college education. From the dates on the petitions, it is possible that Mother ignored Father's petition to have the daughter emancipated and simply filed her own petition.

The trial court, without a hearing, "unemancipated" the child, increased Father's child support and directed that a full hearing be conducted on the request for contribution to college.  Father appealed.  The Appellate Court noted that a child can indeed be "unemancipated" to receive support in the form of college contribution.  The Appellate Court remanded the entire case back to the trial court to conduct a full hearing on all of the issues, including the child support.

So -- just because a New Jersey court declares your child emancipated - you may not be off the hook.  The child's custodial parent could later ask the court to undo that emancipation, depending on the circumstances.

Thursday, June 21, 2012

What exactly is “best interests?”

If you are involved in custody litigation, chances are likely that you have heard or used the phrase “best interests” of the child.  The problem is that rarely do people actually consider what “best interests” might include.  Usually, people assume that a “best interests” analysis is simply a determination of what is best for the child.  However, Pennsylvania law provides a specific framework for a court to use when weighing the evidence.  The sixteen factors that a court must consider when analyzing “best interests” are as follows:

1. Which party is more likely to encourage and permit frequent and continuing contact between the child and another party.

2. The present and past abuse committed by a party or member of the party’s household, whether there is a continued risk of harm to the child or an abused party and which party can better provide adequate physical safeguards and supervision of the child.

3. The parental duties performed by each party on behalf of the child.

4. The need for stability and continuity in the child’s education, family life and community life.

5. The availability of extended family.

6. The child’s sibling relationships.

7. The well-reasoned preference of the child, based on the child’s maturity and judgment.

8. The attempts of a parent to turn the child against the other parent, except in cases of domestic violence where reasonable safety measures are necessary to protect the child from harm.

9. Which party is more likely to maintain a loving, stable, consistent and nurturing relationship with the child adequate for the child’s emotional needs.

10. Which party is more likely to attend to the daily physical, emotional, developmental, education and special needs of the child.

11. The proximity of the residences of the parties.

12. Each party’s availability to care for the child or ability to make appropriate child-care arrangements.

13. The level of conflict between the parties and the willingness and ability of the parties to cooperate with one another.  A party’s effort to protect a child from abuse by another party is not evidence of unwillingness or inability to cooperate with that party.

14. The history of drug or alcohol abuse of a party or member of a party’s household.

15. The mental and physical condition of a party or members of a party’s household. 

16. Any other relevant factor.

When you are preparing for custody litigation, you and your attorney should carefully consider each of these factors.  By using these factors to outline your case for the court, you are bolstering the strength of your argument.  Obviously, many of these factors can split evenly between the parents, but they can, and must, guide the court.  No one of these factors is decisive, and the court can give each factor as much or as little weight as the court feels is appropriate.  You will help your case by thinking about each of these factors and how they apply to your situation.

Written by Elizabeth A. Bokermann, Esquire, associate attorney at the Law Offices of Linda A. Kerns, LLC.

Tuesday, June 19, 2012

Today is Tuesday and every Tuesday we like to post a tip that will help you to handle your legal issues.

Even though divorce is highly emotional, it helps to try to be practical. Remember: “No matter how you slice it, divorce is expensive and time-consuming. The most important variable is how well you and your spouse are able to put aside your anger and grief and cooperate on the big issues of money and children. The better you are at working together to make decisions for your changing family structure, the better for your bank account and for your chances of emerging from the divorce with a decent relationship with your ex.”

- Emily Doskow

Friday, June 15, 2012

Manages Your Finances

Many individuals have difficulties managing their finances, and this problem may only get worse when marrying or combining finances with a significant other.  This article provides insights into ways that couples often sabotage their finances.

Thursday, June 14, 2012

Veterans’ benefits are exempt from equitable distribution, except when they are not.

The Superior Court of Pennsylvania (our appellate court) recently decided a case regarding a dispute related to Husband’s veteran disability benefits.  Goodemote v. Goodemote, 2012 PA Super 94 (May 1, 2012).  Husband and Wife were married from 1991 until they separated in 2007.  Husband is a veteran, who served in the Vietnam War and suffered injuries.  He received veteran disability payments from 1969 until present.  Until 1978, he deposited his veteran disability payments into an investment account.  He never withdrew funds from the account or otherwise used it for his own support or his wife’s support during the time the parties were married.  However, the value of the investment account more than doubled due to the reinvestment of the interest and dividends.  From the time the parties married until their separation, the increase in the value of the investment account was approximately $84,000.00.  

During the divorce proceedings, Husband took the position that the veterans benefits in the investment account were not subject to equitable distribution due to the portion of the Pennsylvania equitable distribution statute that protects these types of benefits and states: “Marital property does not include: . . . veterans’ benefits exempt from attachment, levy or seizure pursuant to the Act of September 2, 1958 (Public Law 85-857, 72 Stat. 1229), as amended, except for those benefits received by a veteran where the veteran has waived a portion of his military retirement pay in order to receive veterans’ compensation.”  23 Pa.C.S.A. Section 3501(a).  

During the divorce proceedings, the equitable distribution Master declined to include the investment account or the gains thereon as part of the assets subject to distribution, relying on the Pennsylvania statute as well as a federal statute which states: 
Payments of benefits due or to become due under any law administered by the Secretary shall not be assignable except to the extent specifically authorized by law, and such payments made to, or on account of, a beneficiary shall be exempt from taxation, shall be exempt from the claim of creditors, and shall not be liable to attachment, levy, or seizure by or under any legal or equitable process whatever, either before or after receipt by the beneficiary.
38 U.S.C. §5301(a)(1).  

In this matter, the equitable distribution Master characterized the entire investment account (the original deposits and the investment gains) as veteran’s benefits and decided that Pennsylvania and federal law prevented Wife from claiming any part of the account as part of the marital estate.

Wife filed Exceptions to the Master’s report and the trial court reversed the Master and held that the gains on the investment account was subject to equitable distribution. Husband then appealed.  

The Appellate Court reviewed the relevant case law, particularly the U.S. Supreme Court case of Porter v. Aetna Casualty & Surety Co., 370 U.S. 159 (1962) which established a three part test as to whether veterans’ disability payments retain their exempt status:
(1) funds must be “readily available as needed for support and maintenance;” 
(2) funds must “actually retain the qualities of money;” and 
(3) funds must “have not been converted to permanent investments.”  Porter, 370 U.S. at 162

In this case, Husband failed to meet the third prong of the test, because he had placed his veterans’ payments in an investment account, thus converted them to permanent investments.  Accordingly, the court concluded that the increase in the value of the investment account was marital property, subject to equitable distribution between Husband and Wife.  Therefore, Wife will receive an equitable portion of the gains on Husband’s investment account, even though the original monies deposited in the account were protected veterans’ benefits.

Confusing?  Technical?  Surprising?  Divorce law can be all three and, at times, even counter-intuitive.  Have your case reviewed by an experienced, local attorney so that you receive and can rely on the best, most comprehensive advice.

Tuesday, June 12, 2012

Helpful Tip Tuesday

Today is Tuesday and every Tuesday we like to post a tip that will help you to handle your legal issues.

After your divorce is finalized it is important to review the beneficiary designations on all of your accounts, including insurance accounts. If your ex-spouse is named as beneficiary, even after a divorce, a company may have no choice but to give the asset to the ex-spouse.

Thursday, June 07, 2012

My opinion!

Check out my letter to the editor in today's Philadelphia Inquirer, commenting on a piece published earlier on alimony in Pennsylvania and New Jersey.

Thursday, June 7, 2012 - The Philadelphia Inquirer

In New Jersey, if you agree to a high child support number, can you ever get it lowered?

In New Jersey, like in Pennsylvania, we have child support guidelines.  In order to calculate a child support obligation, we determine the respective incomes or earning capacities of each of the parents and plug the numbers into the guidelines.  However, the calculation lacks simplicity in that many deviations exist from the standard guideline amount and litigants can have disparate views on each other’s income or earning capacity.  However, calculating a base child support number will be the best starting point in order to negotiate a final settlement.

Sometimes the basic child support number simply is not enough for the parent receiving child support.  Actually, most parents receiving child support believe that the basic child support number is not enough.  In some cases, the obligor parent (the parent paying support) will agree, for whatever reason whether from guilt, altruism or necessity, to pay child support in an amount greater than the guideline number.  The parties’ agreement becomes a court order.  

As many people understand, child support is always modifiable.  When there is a change in circumstances, child support will be reviewed and the numbers are recalculated.  At that point, the question becomes: whether the obligor parent will still be held to an above-guideline amount when the child support is recalculated if the obligor parent has previously agreed to pay an above-guideline amount?   What happens if he or she no longer wishes to be generous?  If the obligor parent agrees to pay an above-guideline child support at one time, is he or she bound to that forever?

The Superior Court of New Jersey in Ocean County recently faced that very question in the case of Musico v. Musico, Docket no. FM-15-532-07N.  The parties had originally consented to an above-guideline level of child support.  Some time later, the defendant/father petitioned to reduce his child support on the basis that he now had increased time with the children.  In their original divorce agreement, the parties had agreed that father would pay the guideline child support sum of $161.00 per week, plus the cost of the plaintiff/mother’s health insurance.  In the same agreement, mother agreed to waive any type of alimony.  However, the settlement agreement failed to expressly state that mother had waived alimony in exchange for an increased child support number in order to cover her health insurance.

When father later petitioned to reduce his support amount, he argued that the prior agreement to pay above-guideline child support was not linked to mother’s decision to forever waive alimony.  However, mother countered that his request was unfair and inequitable, considering that she had waived alimony on the basis that she expected father to pay the above-guideline child support so that she could pay her own health insurance.

The court reviewed the law governing contracts and child support.  The court also reviewed the circumstances of the parties’ original divorce agreement.  In so doing, the court concluded that mother would have been entitled to alimony and her waiver of same must be considered in the context of calculating the new child support number.  

The court held that when parties enter into a child support agreement that is above-the-guidelines and then later petition to change it based on a change in circumstances, then the new calculation must first begin with a base child support guideline calculation.  However, the analysis will continue because the court will review the prior agreement and current status quo to determine if there are additional equitable facts for the court to consider in setting a new child support figure, which may remain an above-guideline number.  

Tuesday, June 05, 2012

Helpful Tip Tuesday

Today is Tuesday and every Tuesday we like to post a tip that will help you to handle your legal issues.

Eventually your divorce will be part of the past for both you and your children. Remember: “I’ve been through divorce and will always be a ‘divorced kid’ . . . For me, my parent’s divorce was hard at first, but I overcame my sadness and fears about it. I know that my parents are happier apart. And I’m happy with the way things are, too . . . Divorce can sometimes be for the better. You may end up with happier parents, and you will definitely learn a lot about yourself! And that’s the whole point of growing up. So if you think about it, there are reasons to be happy about this experience, if you can learn and grow from it.”

- Zoe Stern

Monday, June 04, 2012

Celebrity custody battles

The actress, Halle Berry, and her child's father continue to fight over custody of the little girl. Custody battles generally have no true winners and losers - just a solution that attempts to make the best of a difficult situation: Mom and Dad no longer live in the same house.  When celebrities fight in court, bits and pieces are leaked to the media so the frenzy of the tabloids adds to the pressure and anxiety.  Apparently, Halle Berry wants to move away from California with her daughter while the father wants her to stay put.  TMZ has the story. 

We have written about custody matters frequently on our blog. Click below for some of our posts, keeping in mind that the laws change and evolve periodically  so be sure to consult with an experienced attorney about your situation.

Child custody

Custody statute changes


Relocation and Jurisdiction

You can also simply go to our Index of Keywords on the left side of the blog to browse topics.

Refinancing a mortgage - the FAQs

The Federal Reserve Board publishes an objective, step by step guide on information you will need to consider when refinancing a mortgage. If you are considering refinancing the mortgage on your home, review their website so you can be prepared to make informed decisions: