Tuesday, October 30, 2012

Court Delays

Justice Ron Castille, Chief Justice of the Pennsylvania Supreme Court, announced that the closings of the courthouses and prothonotary offices as a result of Hurricane Sandy will most likely impact and delay a great deal of cases, due to postponements and rescheduled cases.  This will burden already overloaded dockets, especially in Philadelphia County.

Helpful Tip Tuesday

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

Need a printout of your Social Security earnings statement? You can now obtain one online at http://www.socialsecurity.gov/mystatement/.

Saturday, October 27, 2012

Inspiration on a Saturday

"The difference between fiction and reality?  Fiction has to make sense."

 - Tom Clancy

Friday, October 26, 2012

The stork is on his way!

Elizabeth Bokermann, Esquire (associate attorney here at the Law Offices of Linda A. Kerns, LLC) and her husband are joyfully expecting their first child, who should arrive on the scene before 2012 is over!  Congratulations Elizabeth and Matt!

Thursday, October 25, 2012

What is the role of a guardian ad litem in New Jersey?

New Jersey Rules of Court Family Part R. 5:8B helped to eliminate the confusion between court-appointed counsel for children and a guardian ad litem for children. Court-appointed counsel services are to the child(ren). Court-appointed counsel is appointed for the purpose of being a legal advocate and, therefore, must be an attorney. Court-appointed counsel also acts as an independent advocate and actively participates in any hearings. A guardian ad litem is completely independent of the legal process, and does not even have to be an attorney. They are appointed in the capacity of a legal expert to give a non-biased opinion. A guardian ad litem’s services are to the court on behalf of the child. This blog discusses the role of a guardian ad litem.

In cases where parenting time and custody are at issue, courts can appoint a Guardian Ad Litem ("GAL"). A GAL person is appointed solely for the purpose of representing the best interests of the child in the pending custody matter. Once the court appoints a GAL, the GAL acts as an independent investigator, evaluator and fact-finder for the court as to what would be in the best interests of the child(ren). After the GAL has performed his or her duties, he or she submits a report to the court with recommendations. A GAL does not represent or advocate for any party, including the child.

In addition to preparing a written report, pursuant to Rule 5:8B(a), the GAL may be called to testify and be cross-examined. In preparation for writing the report, the GAL may interview all parties involved, obtain any relevant documents, speak with the attorneys in the case, ask for assistance from independent experts with the court’s permission, and request from the court anything else deemed necessary to create a complete report.

Because the GAL’s role is to act on behalf of the court, there is no perceived bias in favor of one parent. A parent still has the option of presenting evidence to refute, clarify or supplement the testimony of the GAL. Additionally, a trial judge is never bound to accept a GAL’s recommendations and cannot leave it up to the GAL to make final decisions regarding custody and parenting time.

A court-appointed GAL is paid for by the parties involved; therefore, this is not a tool that is used often or freely. This rate is fixed in the initial appointing order by Rule 5:8B(d); however, the trial judge can fix a retainer fee in the order and allocate final payment between the parties. Further, the GAL is required to submit monthly statements to the parties involved.

The authority of the GAL is limited to the representation of the child involved in the action.

Written by Allyson Lutley, law clerk at Law Offices of Linda A. Kerns, LLC.  Edited by Elizabeth A. Bokermann, Esquire, associate attorney.

Tuesday, October 23, 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.

Typically when going through a divorce, couples shut down joint bank accounts. However, as this article ( http://bottomline.nbcnews.com/_news/2012/09/25/13918558-zombie-alert-checking-accounts-can-rise-from-the-grave?lite) notes, sometimes accounts can unintentionally be reactivated. Be careful to monitor your accounts and credit report during and after a divorce to make sure that all accounts are actually closed.

Saturday, October 20, 2012

Inspiration on a Saturday

"A goal without a plan is just a wish." 

- Antoine de Saint-Exupery

Thursday, October 18, 2012

Requirements of a restraining order in New Jersey

In the 2011 New Jersey case, S.M.K v. C.R., the plaintiff sought a restraining order against the defendant a year after their year-long relationship ended. S.M.K. v. C.R., 2011 WL 4596059. Immediately after their break-up, the defendant began texting, emailing and showing up at the plaintiff’s home. Plaintiff filed for a restraining order alleging harassment.

A little over one year after the parties broke up, defendant went to plaintiff’s home and, when no one answered the door, defendant left a note on plaintiff’s car. After finding this note, plaintiff went to the local police station and signed a complaint under the Prevention of Domestic Violence Act (“Act”), N.J.S.A. 2C:25-19(a), against defendant for trespass as well as harassment. According to the Act, a victim of domestic violence includes any person who has been subjected to domestic violence by a person with whom the victim has had a dating relationship. A day after filing the complaint, plaintiff obtained a temporary restraining order (“TRO”). 

At trial, plaintiff could not produce the texts mentioned in the complaint filed and described as “nasty.” About four months after the break-up, plaintiff wrote to defendant asking defendant to stop “emailing, calling, [and] coming to my home.” Four months after that, defendant tried to contact plaintiff on Facebook to congratulate her about her engagement. Five months after that, defendant asked plaintiff’s fiancĂ© to become Facebook friends, as plaintiff had blocked defendant.

The trial court’s decision stated that although plaintiff had proved the predicate act of criminal trespass, the judge found that defendant had not committed any acts of harassment and a restraining order was not necessary to protect plaintiff from immediate danger. The judge said that defendant’s communications were not threatening, or threatening violent action, toward the plaintiff and granted defendant’s motion for a directed verdict, dismissed the case and dissolved the TRO.

The Appellate Court agreed with the trial court judge that a domestic violence restraining order was not necessary for plaintiff’s protection and, further, that plaintiff had not established legal entitlement to relief. Even though a predicate act to harassment was proved, plaintiff could not prevail unless she made a showing that an Final Restraining Order was necessary for her protection and, even though defendant’s attempts to contact her were unwanted and annoying, the actions did not establish a need to protect plaintiff according to the Act. These cases tend to be extremely fact specific and courts generally require credible proof before entering a restraining order against an individual. 

By the same token, in a case that boils down to a he said/she said, a court could err on the side of protecting the alleged victim. Therefore, filing or defending against a restraining order should never be taken lightly.

If you have questions about possible harassment or the need for a restraining order, or if a restraining order has been filed against you, you should contact an attorney to discuss your options.

Written by Allyson Lutley, law clerk to Law Offices of Linda A. Kerns, LLC.  Edited by Elizabeth A. Bokermann, associate attorney.

Tuesday, October 16, 2012

Linda A. Kerns appointed to State Board of Nursing

I am pleased and honored to announce that Governor Corbett nominated me to a seat on the Pennsylvania State Board of Nursing.  The Pennsylvania Senate unanimously confirmed my nomination.  My term will be for six years.  I am thrilled to be able to serve our Commonwealth.

Linda A. Kerns, Esquire

Helpful Tip Tuesday

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

Understand your paycheck (and your spouse's paycheck). Sometimes the abbreviations on paystubs can be difficult to decipher.  Do not wait until you are in support court to start figuring it out.  Look at each line of the paystub and understand each and every deduction -- so that you can explain it to your lawyer, or the court.  If there is an abbreviation that you do not understand, then call human resources of the company -- they can usually help you.  Googling can even help!

Saturday, October 13, 2012

Inspiration on a Saturday

"Success is how high you bounce when you hit bottom."

- General George Patton

Thursday, October 11, 2012

Small business owner? Understand "Cap rates."

What is a cap rate and why could it be relevant to your divorce?  If you or your spouse own a small business or commercial enterprise, then you should understand the concept of "cap rates," because they are an integral part of the valuation process.

A capitalization rate, or “cap rate” for short, is a numerical factor that is used as part of a mathematical formula to determine the value of a business when using the income approach, which is one method of valuing a business.  Sound complicated?  It is, but let’s break it down further.

First, an evaluator must determine the rate for the individual business by reviewing the financial books and records.  To determine the cap rate an evaluator looks at various aspects of a commercial enterprise, as well as market data.  Then the evaluator assesses the following:

(1) Risk-free rate.  This number is objective, and experts generally use the 20 year Treasury Note rate.  Tip: If your evaluator does not use this objective number, ask why.

(2) Equity risk, size and industry-specific premiums.  These factors compare the rate of return in the public stock markets, the risk associated with the size of the company being evaluated and the risk associated with the particular industry of the company being evaluated.  Tip: Do you think your business is risky but the evaluator believe otherwise?  Ask for an explanation of the evaluator’s decision on these issues.

(3) Risks specific to your company.  Determining this factor utilizes the most subjectivity.  Each company has its own unique circumstances which play a part in determining its value, including: how old is the company, how is the management structured, where do the customers come from, how has the company performed historically and what is unique that may expose the company to risk?  For example, is the company dependent on contracts with the Defense Department, which are negotiated at the whim of Congress?  Or, does the company depend on a specific brand or product that could lose popularity with the consumer?  Different experts will have different opinions on these factors; therefore, your valuation must include credible conclusions based on comprehensive data.  Tip: Do you know something about your business that will change its financial picture in the near future?  If yes, share it with the evaluator.

(4) Growth rate - How is the company expected to grow?  This factor utilizes industry expectations and includes some subjectivity on the part of the evaluator; thus, it must be based on credible data.  Tip: What do you expect of your business in the next few years?  Make sure that it matches what is in the evaluation.

Unfortunately, as is clear from the listed factors, determining the cap rate relies on both objective and subjective data, which is why two different evaluators can come up with vastly different numbers when determining the value of a business.  Therefore, it is important for you, as a business owner or the spouse of a business owner, to understand the origins of the data, because then you can assist your legal team and make sure the value of the business at issue is fairly calculated.  

In addition to determining the cap rate, the evaluator also must determine the net yearly  income of the business.  Once the evaluator has determined both the cap rate and the net income of the business, the evaluator plugs both numbers into a formula to calculate the value of the business.  To illustrate how the formula work, here’s an example: 

Say you have a cap rate of twenty-five percent (25%) based on the four factors outlined above.  To figure out the cap rate multiplier, you must determine how many times the cap rate goes into 100.  Using our example cap rate of 25%, you know that twenty-five goes into 100 four times.  (Twenty-five times four equals 100.)  That means that the multiplier for a 25% cap rate is four.  

Once you have the multiplier for the cap rate, then you can determine the value of the business one of two ways.  Either you can multiply the business’ yearly net income by the multiplier OR you can divide the business’ yearly net income by the percentage cap rate.  Again, using our example, if your business earns a net income of $100,000 per year, then you can either divide that number by percentage cap rate (25%) OR multiply it by the multiplier (4).  Regardless of which method you use, you get $400,000 as the value of the business.  

To demonstrate the same formula again, using different numbers, let’s say that you had determined that your cap rate was only 5%.  To determine the multiplier you figure out that 5 goes into 100 twenty times.  Thus, your multiplier is 20.  Using either calculation method from above, you will determine that the value of a business with a yearly net income of $100,000 would be $1,000,000.  

In short, understanding the way a cap rate is calculated can assist you in understanding the way your business is valued and can remove some of the confusion and mystery that is often part of the process.  I have oversimplified many of these definitions and explanations, but the brief overview provides a rudimentary understanding of business evaluations.  An actual valuation by an expert will be much more comprehensive.

Therefore, if your divorce involves a business, get a jump start on the valuation process by gathering as much information as possible: tax returns, profit and loss statements, bank account statements, etc.  That way, you may be able to complete the preliminary work for your attorney.  Additionally, gathering information will assist you in determining an approximate value of the business so that you can then decide whether you should invest funds in a formal business appraisal by an expert.

Tuesday, October 09, 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.

Preserve. Preserve. Preserve. Sometimes, the actual divorce and division of assets and debts can occur months or even years after the separation. Recreating and obtaining bank statements, credit card statements, investment account information, and old tax returns can be challenging. Help yourself by gathering the information now so that you do not have to pay to have a bank produce it later.

Monday, October 08, 2012

At least show up for your divorce trial!

In this recently decided case in New Jersey, the appellate division, in an unpublished decision, refused to grant Husband's request to vacate a divorce, equitable distribution and support order.  He failed to appear at the final proceeding, instead faxing a letter (without any back-up documentation from a doctor) that he had malaria and could not travel from Africa.  You can read the full opinion here.  The trial court had entered a default judgment against him based on the information that the Wife submitted, after noting that he had received full notice and had failed to participate or submit any evidence.

The moral of the story -- participate in your case.  I have had many clients come to me weeks, months or years after a divorce, asking to change the outcome, even though they did not participate the first time around.  Protect your rights at the trial level -- do not procrastinate.

Saturday, October 06, 2012

Inspiration on a Saturday

"Those who bring sunshine to the lives of others cannot keep it from themselves."

- James Barrie

Thursday, October 04, 2012

Five Points to Consider to Avoid Disastrous Divorce Money Errors

1. Do not ignore tax issues in property division.  Before deciding on the final division of assets, consider what, if any, tax consequences there will be for each particular asset.  For example, if one party receives a bank account worth $50,000.00 in a divorce, while the other party receives stock accounts, the party who receives a stock account could incur significant tax consequences when that stock is liquidated, depending on the basis of the stock (Basis is the original value of the stock when obtained and is used to calculate gain in value. The gain in value is taxed).  Similarly, if one party receives a vacation home that he or she plans to sell, there will most likely be capital gain consequences, meaning that any profit will be taxed.  Accordingly, consider the financial condition of each party and their plans to liquidate assets to factor in the tax consequences.  

2. Be careful to finalize the transfer of the deed, refinance the mortgage and resolve all of the attendant obligations associated with real property before the final divorce.  Many spouses think that one spouse can just “give” the home to the other spouse.  However, unless the original joint mortgage is re-financed out of joint names, both spouses will still be financially responsible.  Even if one spouse gives up the ownership interest in the house, he or she would still be liable for the mortgage and in the event of late payments, non-payments or foreclosure, both spouses would be financially devastated.  The same goes for the bills associated with the house, such as water, cable, electricity and property taxes.  Make sure all of the bills are transferred into the name of the spouse who is retaining the property.  Being served with a foreclosure notice or unpaid utility bill years after a divorce will be an unwelcome, nasty headache.  

3. Use accurate values when dividing assets.  Parties may agree to a 50/50 split, but if an asset, such as a house, pension account, investment account or other asset is incorrectly valued, the practical effect of what the parties thought was a 50/50 division could be much more lopsided.  Make sure to use correct values and that the parties are aware and agree upon the values that are used.

4. Consider how the tax dependency exemptions for children will be divided.  Some parties spend quite a bit of time and energy arguing over dependency exemptions when it may not benefit the party due to the alternate minimum tax or because their adjusted gross income is too high to receive the benefit.  Additionally, one party may need the exemptions in order to take advantage of other tax credits.  Accordingly, these issues should be researched thoroughly and the parties should seek the advice of an accountant and determine a fair and equitable division.  

5. When deciding how to divide pensions and retirement plans, remember to consider the value and the cost of the spousal survival benefit and factor it into any final resolution.  Additionally, there will be a cost to dividing retirement assets.  One or both parties will need to have appropriate paperwork drafted and submitted to the Plan Administrator and the court. This paperwork is often referred to as a Qualified Domestic Relations Order (QDRO).  This process can take months and accrue attorney’s fees; therefore, decide in advance how these costs will be divided.

Tuesday, October 02, 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.

Now that fall is upon us, review the school year calendar, children's vacations schedules and your holiday custody schedule.  Iron out anything that is unclear now -- such as holiday pick up and dropoffs, so that your year will be stress free.  IF this is the first year that you will be having holidays with the children as a separated couple, think about previous years' traditions and think about how you can continue them -- or make new ones.

Monday, October 01, 2012

Published versus Unpublished Decisions

The Superior Court of Pennsylvania (the appellate court), recently announced that it plans to post unpublished memorandums on its website.  Currently, the Superior Court of Pennsylvania only posts actual published decisions, not unpublished, memorandum decisions.  So, what is the difference?

A published decision has both precedential and persuasive value.  This means that you can use published decisions that are similar to your case to convince lower court judges of the merits of your own matter.  Unpublished, memorandum decisions may not be used in this way.  However, unpublished, memorandum decisions still have value -- for guidance purposes.

New Jersey has long  posted both published and unpublished decision on The New Jersey Court website.  Go to the site and click on the Opinions tab.  Rutgers School of Law maintains a free search page for New Jersey Courts which is convenient if you are looking for cases on a particular topic.

Pennsylvania's Unified Judicial system also started a Media Information Case where the public can access documents from high profile cases of significant public interest.  You can access that page here.