Understanding Child Custody in Pennsylvania

March 13, 2024 by Leave a Comment

UNDERSTANDING CHILD CUSTODY IN PENNSYLVANIA

No issue is more important when parents separate than the custody and future of their children. Answering this question is also one of the most difficult and unwelcome decisions that a judge must make. The process is complex, the results uncertain, and often expensive. Multiple people, who are strangers to you, your spouse, and your children, can be involved, people such as court-appointed custody masters, psychiatrists, psychologists, social workers, and ultimately judges. All of them are looking out for the “best interests of the child.” None of them really know what that means.

To guide them all, Pennsylvania law requires that they answer a staggering number of invasive and uncomfortable questions – 16 in all! The Courts must answer difficult questions like:

  • Which parent is more likely to help foster contact the relationship between the child and the other parent;
  • Which parent is more likely to have a loving and stable relationship with the child; and
  • Which party is more likely to take care of the child’s daily physical, emotional, and educational needs.

They must also answer simpler questions like:

  • Which parent takes care of the child’s basic needs;
  • The availability of extended family;
  • The accessibility of child-care; and
  • The distance between the parents’ homes.

The Courts will even assess your own mental, emotional, and physical health.  If your child is old enough and mature enough, the Courts will take your child’s preferences into account. However, your child’s preferences are not supposed to be the controlling factor.

Custody masters and judges typically use these factors like a score card, ticking off boxes in favor of one parent or another. Then, they add up the score and make their decision. They do not simply give each factor the same weight and declare a winner, however. Moreover, the Courts may not make custody decisions based on gender.  They do, as a practical matter, though still prefer mothers of young children over fathers, which is hard for fathers to overcome. Some factors are more important than others. Some facts lean more heavily in favor of one parent or the other. Even with the factors, fundamentally no judge or custody master looks at the same facts in the same way. That is what makes it so difficult for a parent and their attorney to predict how a judge will decide a custody request.

Even if different judges may assess the factors the same way, at the end of the process they still must decide how to actually divide the custodial time. That decision will determine who gets weekdays, who gets weekends, who gets holidays and vacations, which school will they attend, and even possibly who drops the children off and picks them up. While there are some basic schedules used, different judges will establish different schedules.

For parents, who must leave their children’s home on short notice and do not have a second home for themselves and their children, securing custody of their children can be very hard financially. Courts will limit the out-of-home parent’s time, including overnights with their children, if that parent does not have enough bedrooms and beds for their children. But, setting up a second home on short notice is expensive and time-consuming, especially when, as is so often the case, displaced parents generally do not have much money for their own housing after paying child or spousal support. The amount of your custody time will also affect the amount of child support payments. To make matters more challenging, keeping up a good relationship with your child is particularly important just after separating for securing a good, long-term future with your child. So, displaced parents should try to make a suitable home for themselves and their children as soon as possible.

All of these considerations make the fight to protect your time and relationship with your children the most difficult and important aspect family separation.

If you need help establishing your right to custodial time with your children or have questions about child custody law in Pennsylvania, please contact Roger Cameron at the Law Offices of Spadea & Associates, LLC at 610-521-0604 for free 20-minute consultation.

Filed Under: Divorce, Family Law

What is Considered a Marital Asset in Pennsylvania

February 19, 2024 by Leave a Comment

Knowing what is and what is not “marital property” is vital to a satisfactory outcome when filing for divorce in Pennsylvania.  Pennsylvania’s statutes define “marital property.”  While the statute excludes specifically certain types of property, most divorces concern two kinds of marital property:

  •  property that you acquired during your marriage as an individual or jointly with your spouse; and
  •  the increase in the value of property that you had when you got married and continued to own during your marriage.

An example of the first kind of property is a car that you bought in your own name after you got married.  Even if you titled the car only in your name or you used your own money from your individual bank account to pay for it, the car is marital property.  An example of the second kind of property is a car that you owned when you got married.  In that case, only the increase in the value of the car during your marriage above the value of car before you got married is considered marital property.

Marital property means more than just a physical object, like your house or your car.  It can also mean things like your right to money damages because of a car or work accident or a broken contract.  If the accident occurred when you were married but before the date of your final separation, the right to that money is marital property.  It does not matter whether you were paid a settlement on that claim after your divorce.  The settlement money is still marital property.

Not every piece of property that you acquired after you were married is considered marital.  Any kind of property that you acquire after your “final separation” using your own funds is not marital.  So, if you bought that car after you separated from your spouse with money that you earned after you separated, then the car is yours.  Your spouse has no claim to it.  On the other hand, if you bought that car after you separated and you used joint funds, then the car is marital property.

Marital property is more than just what you own.  It also is what you owe to creditors, like banks and credit card companies.  Debts like those are considered marital debts, even if your spouse ran up charges on his or her personal credit card during your marriage and before final separation without your knowledge or consent.  While, you may not be liable to the bank for those kind of debts, those debts are considered marital obligations.  Responsibility for those debts will be divided between you and your spouse.  The key in all of these situations clearly is figuring out the date of final separation.

Since Pennsylvania does not recognize the idea of “legal separation,” the date of your final separation may be as late as the date when you or your spouse filed for divorce.  It may also be as early as the date when you stopped living under the same roof.  However, when you and your spouse continue to live under the same roof, the courts will have to decide the date of your final separation.  In those situations, there are several facts that Pennsylvania courts will consider when figuring out the date of your final separation.  Whether and when you and your spouse stopped presenting yourselves as a married couple is significant.  The date when you separated your finances, if you held joint bank accounts during your marriage, is also relevant.  The date when you stopped sharing a bedroom or having sexual relations matters too.  Even something as simple as whether you and your spouse grocery shop, cook, or eat together can be important.

Practically speaking, the date of your final separation will determine when you and your spouse stopped acquiring marital property and stopped getting into marital debt.  For spouses, who own or control most of the marital assets or who incurred the least amount of individual debt, advocating for the earliest date of final separation is important.  Conversely, for spouses, who do not own or control most of the marital assets or who incurred most of the marital debt, advocating for a later date of final separation is critical. 

If you are not sure about your marital property or obligations or you have any questions about marital property, please contact Roger P. Cameron, Esquire, at 610- 521-0604 at the Law Offices of Spadea & Associates LLC for a free 20-minute consultation.

Filed Under: Divorce, Family Law

Why Common-Law Marriage in Pennsylvania is Not so Common After All

February 19, 2024 by Leave a Comment

Common-law marriage remains a hot topic in Pennsylvania, particularly for long-time, same-sex couples.  In the frontier days of Pennsylvania, when ministers, pastors, and judges were hard to find and even more difficult to meet, common-law marriages were a regular feature of life. Such marriages did not require a marriage license and a formal ceremony before a pastor who had legal authority to marry. Pennsylvania courts have long struggled when deciding if you are married by common-law when you don’t have a marriage license and there was no officiant or ceremony. The court’s determination could mean the difference between inheriting property from your spouse’s estate or losing all of the property that you built up over your years together. Today, the issue of whether or not you are in a common-law marriage also affects newly established rights, like Social Security spousal benefits and even death benefits under Workers Compensation laws.

When deciding whether you and your partner have a common-law marriage, Pennsylvania’s courts are required to answer many questions. Did you say the magic words, ”I take you as my spouse” or simply say, “I will marry you”? Did someone witness you saying those words? Did you live as spouses, and if so, for how long? Do you own a house together? Do you introduce your partner as your spouse? Do you go by your spouse’s last name? Have you filed tax returns together as spouses? Have you applied for credit cards together? Even, did you get mail addressed to you as Mr. and/or Mrs.? The most important question, though, is always whether the judge simply believes you. Courts were so distrustful of claims of common-law marriage, especially when one spouse was dead, that they imposed the highest burden of proof in civil cases, known as “clear and convincing” evidence. Sometimes, the courts made the correct decisions. Sometimes, they did not. Generally speaking, virtually no court saw or heard or believed the same evidence in the same way with the same result. There simply was no certainty.

To bring predictability to the legal status of marriage in Pennsylvania, its legislature passed a law that simply invalidates any common-law marriage that occurred after January 1, 2005. In other words, if you were not part of a common-law marriage on or before January 1, 2005, you are not married to your spouse under Pennsylvania law.  Common law marriages begun before that date could not be invalidated without violating the partners’ due process rights. Knowing your rights in common-law marriages is still important today, especially for same sex spouses.

Older same sex couples should be the most concerned because until 2014 Pennsylvania did not recognize the right to same sex marriage at all. Many of those marriages could still be valid in Pennsylvania. Each person in those marriages may have previously unknown rights to divorce, divide marital property, get or pay alimony, receive child support, share custody of children, and even inherit property that were not apparent before 2014.

Even if Pennsylvanians no longer can have valid common-law marriages after 2014, Pennsylvania courts must also still recognize out-of-state common-law marriages even today. However, Pennsylvania judges do not like deciding whether an out-of-state common law marriage is valid. It puts the Pennsylvania courts in the unwelcome situation of making decisions about a person’s rights under another state’s laws. Those legal rights judgments are particularly difficult for Pennsylvania judges to make because some states still do not recognize the right to same-sex marriage and many have different standards for common-law marriages. The few that still do recognize common-law marriages are considering legislation to invalidate them.

In the end, if you were in a common-law marriage in Pennsylvania on or before January 1, 2005, or are now in a common-law marriage that began in another state that recognizes common-law marriages, you may still be entitled to all of the rights of a spouse. Even if a court in your home state never decided whether you are in a common-law marriage, you may still be entitled to ask a Pennsylvania court to decide whether your out-of-state common-law marriage is valid under your home state’s laws and your marital rights protected.

If you think that you are a spouse in a valid, common-law marriage or have any questions about common-law marriage, please contact Roger P. Cameron, Esquire, at the Law offices of Spadea & Associates, LLC for free 20-minute consultation at 610-521-0604.

Filed Under: Family Law

Understanding How to Terminate and Modify Alimony in Pennsylvania

February 19, 2024 by Leave a Comment

An award of alimony is not necessarily a permanent obligation or a guarantee of future income.  Instead, under Pennsylvania’s statues, it can be ended or modified whenever:

  • A substantial and continuing change in circumstance occurs; or
  • The recipient marries or “cohabits” with a member of the opposite sex; or
  • The recipient or the payor dies.

The death of the spouse paying alimony or the spouse receiving alimony are obvious end points for alimony.  So is re-marriage.  Changed circumstances and “cohabitation,” however, are not so easy to prove or disprove.

To end or modify an award of alimony when circumstances change or cohabitation occurs, the courts look at each specific situation.  One of the most common circumstances for a termination or change in the amount of alimony is a change in the employment or earning capacity of the paying or the receiving spouse.  For example, if the receiving spouse alimony has an accident or is diagnosed with a medical condition that severely limits their ability to support themselves, courts will consider whether the amount of alimony should be increased to keep the receiving spouse supported at the same standard of living.  On the other hand, if the paying spouse gets a significantly better job and the original award of alimony and marital property was not enough to provide the receiving spouse with the standard of living they had during the marriage, the courts may increase the amount of alimony.  Similarly, if the paying spouse suffers a significant and permanent loss of employment or a disabling medical condition occurs, then the court may decrease the amount of alimony.  There are many other changes in circumstances that could cause the termination, reduction, or increase in the amount of alimony.  The main factor for a court is whether change in circumstances is substantial and continuing. 

Pennsylvania law does address one specific kind of change in circumstances: “cohabitation” with a member of the opposite sex, who is not a family relative.  A family relative is someone, who is within the degrees of “consanguinity” of the recipient ex-spouse.  Consanguinity simply means the same blood.  For Pennsylvania, relatives from parents, to children, siblings, first cousins, their children, grandchildren, nieces, nephews, aunts, and uncles are all considered within your consanguinity.  If the receiving spouse lives with one of these family members during or after the divorce, the obligation to pay alimony and the ability to receive alimony will continue. 

However, when they move in with someone, who is not a relative and they live together as spouses would, then the obligation to pay alimony and the ability to receive alimony ends.  Cohabitation is defined as “financial, social, and sexual interdependence.”  Proving or disproving a claim that an ex-spouse is cohabiting is the challenge. 

Courts look at the total circumstances to decide whether someone is cohabiting.  Some of the significant facts showing this interdependence are: whether the ex-spouse and the paramour share the same home and bedroom; whether they contribute together to the household expenses, such as rent or mortgage payments, utilities, groceries, car payments, or insurance; and, whether they have joint bank or credit card accounts.  Other facts include how they present themselves to the world – as partners or merely housemates.  There is no limit to the relevant facts of cohabitation, except the investigative power of the parties and their attorneys.

In the end, it does not matter if the spouse co-habits before, during, or after the divorce proceedings.  Alimony will terminate whenever cohabitation occurs, even if it starts and ends during the divorce proceedings.

Your agreement to pay or receive alimony will override Pennsylvania’s statues.  In other words, you and your spouse can agree that neither death, re-marriage, change of circumstances, or cohabitation will end or change the payment of alimony.  You can also agree that particular changes, such as a significant raise, could reduce the amount of alimony on some percentage basis.  The key to any award or agreement for alimony is planning for your future.  If you are the paying spouse, then terminating or reducing alimony by agreement is in your best interests.  If you are the receiving spouse, making sure that alimony will continue to be paid regardless of events in the life of the paying spouse is vitally important.  Receiving spouses can could protect their future alimony payments by requiring the paying spouse to maintain life or disability insurance for their benefit.  A good attorney will help you to find a solution that fits your divorce or advocate for you if you cannot resolve the claim for alimony by agreement.

If you think that your circumstances justify a change in alimony or you have any questions about alimony, please contact Roger P. Cameron, Esquire, at the Law Offices of Spadea & Associates for a free 20-minute consultation at 610-521-0604.

Filed Under: Alimony, Divorce, Family Law

When Can I Deduct Alimony on my Federal Tax Return Ordered Prior to December 31, 2018

March 3, 2019 by Leave a Comment

When divorce occurs, one ex-spouse is often obligated to make continuing payments to the other spouse. However, for the payments to be deducted by the payer, they must meet the tax-law definition of alimony. For any particular payment to qualify as deductible alimony for federal income tax purposes and meet the tax law definition of alimony, all the following requirements must be met:

  1. The payment must be made pursuant to a written divorce decree or separation agreement such as a temporary support order. Note that payments made in advance of signing a written divorce or separation agreement or before the effective date of a court order or decree cannot be deductible alimony. Such payments are considered voluntary and are therefore nondeductible. The same is true for payment of amounts in excess of what is required under a written divorce decree or separation agreement.
  2. The payment must be to or on behalf of a spouse or ex-spouse. Therefore, payments to third parties, such as attorneys and mortgage companies, are okay if made on behalf of a spouse or ex-spouse and pursuant to a divorce decree or separation agreement.
  3. The divorce decree or separation agreement must state the payments are alimony.
  4. After divorce or legal separation (meaning the couple is considered divorced for federal income tax purposes), the ex-spouses cannot live in the same household or file a joint return for the year they separated or thereafter.
  5. The payment must be made in cash or cash equivalent such as check or money order.
  6. The payment cannot be fixed or deemed child support in the divorce decree.
    Fixed child support simply refers to amounts designated as such in the divorce or separation agreement, so it’s easy to identify. Payments are considered to be deemed child support if they are terminated or reduced by any of the following so-called contingencies relating to a child: a. Attaining the age 18, or the local age of majority.
    b. Death.
    c. Marriage.
    d. Completion of schooling.
    e. Leaving the ex-spouse’s household.
    f. Attaining a specified income level.
  7. The payer’s return is required to include the recipient’s social security number.
  8. The obligation to make payments (other than payment of delinquent amounts) must cease if the recipient party dies. If the divorce decree is unclear about whether or not payments must continue, state law controls. If under state law, the payer must continue to make payments after the recipient’s death, the payments cannot be alimony. Therefore, to avoid problems, the divorce decree should always explicitly stipulate whether a payment obligation continues to exist after the death of the recipient party. Failing this test is probably the most common cause for lost alimony deductions.
  9. There is also an IRS rule that states if alimony payments decrease by more than
    $15,000 per year between years 1 and 2, or years 2 and 3, then part of the payments will not qualify for a tax deduction to the payor (and hence will not be taxable to the payee.) In other words, if alimony payments total more than $15,000 per year then they must last more than one year and cannot be reduced too quickly. The reason for this is because the IRS sees this as a property settlement, not alimony. Because of this rule replacing all monthly payments with a lump sum “alimony” payment that is paid all in one year will often cause a trigger of this recapture rule, since alimony will go down to $0 in year

Keep in mind the Tax Cuts Jobs Act repealed the deduction for alimony paid and the corresponding inclusion of alimony in income by the recipient. The provision is effective for any divorce or separation agreement executed after December 31, 2018, or for any divorce or separation agreement executed on or before December 31, 2018, and modified after that date, if the modification expressly provides that the amendments made by this provision apply to such modification. Thus, alimony paid under a separation agreement entered into prior to the effective date is generally grandfathered.

It is very important to consult a tax attorney like Gregory J. Spadea before signing the marital settlement agreement. You can reach him at the Law Offices of Spadea & Associates, LLC in Ridley Park at 610-521-0604.

Filed Under: Alimony, Family Law, Federal Tax, Tax Return

When Can I Deduct Alimony Ordered Prior to December 31, 2018

November 18, 2018 by Leave a Comment

When divorce occurs, one ex-spouse is often obligated to make continuing payments to the other spouse. However for the payments to be deducted by the payer, they must meet the tax-law definition of alimony. For any particular payment to qualify as deductible alimony for federal income tax purposes and meet the tax law definition of alimony, all the following requirements must be met:
1. The payment must be made pursuant to a written divorce decree or separation agreement such as a temporary support order. Note that payments made in advance of signing a written divorce or separation agreement or before the effective date of a court order or decree cannot be deductible alimony. Such payments are considered voluntary and are therefore nondeductible. The same is true for payment of amounts in excess of what is required under a written divorce decree or separation agreement.

2. The payment must be to or on behalf of a spouse or ex-spouse. Therefore, Payments to third parties, such as attorneys and mortgage companies, are okay if made on behalf of a spouse or ex-spouse and pursuant to a divorce decree or separation agreement.

3. The divorce decree or separation agreement must state the payments are alimony.

4. After divorce or legal separation (meaning the couple is considered divorced for federal income tax purposes), the ex-spouses cannot live in the same household or file a joint return for the year they separated or thereafter.

5. The payment must be made in cash or cash equivalent such as check or money order.

6. The payment cannot be fixed or deemed child support in the divorce decree.

Fixed child support simply refers to amounts designated as such in the divorce or separation agreement,

so it’s easy to identify. Payments are considered to be deemed child support if they are terminated or reduced by any of the following so-called contingencies relating to a child:

a. Attaining the age 18, or the local age of majority.
b. Death.
c. Marriage.
d. Completion of schooling.
e. Leaving the ex-spouse’s household.
f. Attaining a specified income level.

7. The payer’s return is required to include the recipient’s social security number.

8. The obligation to make payments (other than payment of delinquent amounts) must cease if the recipient party dies. If the divorce decree is unclear about whether or not payments must continue, state law controls. If under state law, the payer must continue to make payments after the recipient’s death, the payments cannot be alimony. Therefore, to avoid problems, the divorce decree should always explicitly stipulate whether a payment obligation continues to exist after the death of the recipient party. Failing this test is probably the most common cause for lost alimony deductions.

9. There is also an IRS rule that states if alimony payments decrease by more than
$15,000 per year between years 1 and 2, or years 2 and 3, then part of the payments will not qualify for a tax deduction to the payor (and hence will not be taxable to the payee.) In other words, if alimony payments total more than $15,000 per year then they must last more than one year and cannot be reduced too quickly. The reason for this is because the IRS sees this as a property settlement, not alimony. Because of this rule replacing all monthly payments with a lump sum “alimony” payment that is paid all in one year will often cause a trigger of this recapture rule, since alimony will go down to $0 in year 2.

Keep in mind the Tax Cuts Jobs Act repealed the deduction for alimony paid and the corresponding inclusion of alimony in income by the recipient. The provision is effective for any divorce or separation agreement executed after December 31, 2018, or for any divorce or separation agreement executed on or before December 31, 2018, and modified after that date, if the modification expressly provides that the amendments made by this provision apply to such modification. Thus, alimony paid under a separation agreement entered into prior to the effective date is generally grandfathered.

It is very important to consult a tax attorney like Gregory J. Spadea before signing the marital settlement agreement. You can reach him at the Law Offices of Spadea & Associates, LLC in Ridley Park at 610-521-0604.

Filed Under: Alimony, Divorce, Family Law

Qualifying for the Family-Owned Business Exemption from Pennsylvania Inheritance Tax

November 10, 2014 by

Beginning July 1, 2013, the transfer at death of certain family owned business interests are exempt from the Pennsylvania inheritance tax. Pennsylvania Inheritance Tax is currently 4.5% for linear descendants, 12% for siblings and 15% for everyone else. To qualify for the family-owned business exemption, a family-owned business interest must:

  1. Have been in existence for five years prior to the decedent’s death;
  2. Have less than 50 full time equivalent employees and a net book value of assets totaling less than $5,000,000 at the date of the decedent’s death;
  3. Be engaged in a trade or business, the principal purpose of which is not the management of investments or income producing assets;
  4. Be transferred to one or more qualified transferees – the decedent’s husband or wife, grandfather, grandmother, father, mother, or children, siblings or their children. Children include natural children, adopted children; and stepchildren;
  5. Owned by a qualified transferee for a minimum of seven years after the decedent’s death;
  6. Reported on a timely filed Pennsylvania inheritance tax return and filed within 9 months of the decedents date of death, or within 15 months of the decedent’s date of death if the estate or person required to file the return was granted the six month statutory extension.

The transferee must file an annual certification and notify the Pennsylvania Department of Revenue within thirty days of any transaction or occurrence causing the qualified family-owned business to fail to qualify for the exemption. Failure to comply with the certification or notification requirements results in a total loss of the exemption.

If you feel you qualify for the family-owned business exemption please contact Gregory J. Spadea online or at 610-521-0604 of Spadea & Associates, LLC in Ridley Park, Pennsylvania.

Filed Under: Business Law, Family Law, Qualifying for the Family-Owned Business Exemption from Pennsylvania Inheritance Tax Tagged With: , , , , , , , , , , , ,

What Happens to Your Debts When You Die?

September 9, 2014 by

When you die, your executor has responsibility to pay all your remaining debts if your estate has enough probate assets to pay them. Probate assets are assets that were in your name alone and pass by your will. Before your executor pays any creditors he or she must first pay the estate administration expenses such as funeral costs, grave marker, probate fees, medical bills, attorney fees and rent for the previous six months prior to your death. After the administrative expenses are paid, the secured creditors are paid and any probate assets remaining will go to pay unsecured creditors.

If the estate is not solvent, and a creditor is paid more than he is entitled to receive, the executor can be held personally responsible to the extent of the overpayment. The executor also may be personally liable if he or she distributes estate property without having given proper notice to those having a claim against the estate.

As a general rule, debt collectors may not try to collect from your heirs. However, there are several exceptions. The first exception is if an heir was a co-signer of a particular debt in which case they would be responsible for that debt or if someone held property jointly with you, they would be responsible for any debts on the joint property. The third exception is if an heir inherits a car or a boat that had an outstanding loan, they would have to pay the loan off or the car or boat would be repossessed by the lender.

Creditors cannot be paid from any assets that pass directly to a beneficiary. Assets that pass directly to a beneficiary are called non-probate assets and include jointly owned bank accounts and any account or life insurance policy with a named beneficiary. Therefore a jointly held bank account would pass directly to the joint owner, and the funds in that account could not be used to pay creditors. Similarly, life insurance policies pass directly to the beneficiaries, so creditors do not have access to those funds. In addition creditors cannot access funds held in an irrevocable trust.

A debt collector may not contact your heirs or relatives to try to collect payment unless they were co-signers of the debt or the debt was a jointly owned debt. Debt collectors are allowed to contact the executor of your estate, or your spouse, or your parents if you were a minor, to discuss the debts but may not discuss the debts with anyone else.

Contact Gregory J. Spadea

If you have any questions or need help probating an estate please contact Gregory J. Spadea at 610-521-0604 of Spadea & Associates, LLC in Ridley Park, Pennsylvania.

Filed Under: Estate Planning, Family Law Tagged With: , , , , , , , , , , , ,

When Can I Deduct Alimony on my Federal Tax Return?

November 5, 2012 by

Tax return paper
When divorce occurs, one ex-spouse is often obligated to make continuing payments to the other spouse. However for the payments to be deducted by the payer, they must meet the tax-law definition of alimony.

For any particular payment to qualify as deductible alimony for federal income tax purposes and meet the tax law definition of alimony, all the following requirements must be met:

1. The payment must be made pursuant to a written divorce decree or separation instrument such as a temporary support order.
Note that payments made in advance of signing a written divorce or separation instrument or before the effective date of a court order or decree cannot be deductible alimony. Such payments are considered voluntary and are therefore nondeductible. The same is true for payment of amounts in excess of what is required under a written divorce decree or separation instrument.

2. The payment must be to or on behalf of a spouse or ex-spouse. Therefore, payments to third parties, such as attorneys and mortgage companies, are okay if made on behalf of a spouse or ex-spouse and pursuant to a divorce decree or separation instrument.

3. The divorce decree or separation instrument must state the payments are alimony.

4. After divorce or legal separation (meaning the couple is considered divorced for federal income tax purposes), the ex-spouses cannot live in the same household or file a joint return for the year they separated or thereafter.

5. The payment must be made in cash or cash equivalent such as check or money order.

6. The payment cannot be fixed or deemed child support in the divorce decree.
Fixed child support simply refers to amounts designated as such in the divorce or separation instrument, so it’s easy to identify. Payments are considered to be deemed child support if they are terminated or reduced by any of the following so-called contingencies relating to a child:

a. Attaining the age 18, or the local age of majority.
b. Death.
c. Marriage.
d. Completion of schooling.
e. Leaving the ex-spouse’s household.
f. Attaining a specified income level.

7. The payer’s return is required to include the recipient’s social security number.

8. The obligation to make payments (other than payment of delinquent amounts) must cease if the recipient party dies. If the divorce decree is unclear about whether or not payments must continue, state law controls. If under state law, the payer must continue to make payments after the recipient’s death, the payments cannot be alimony. Therefore, to avoid problems, the divorce decree should always explicitly stipulate whether a payment obligation continues to exist after the death of the recipient party. Failing this test is probably the most common cause for lost alimony deductions.

What happens when payments to an ex-spouse fail to meet the tax-law definition of alimony? They are generally treated as either child support payments or as payments to divide the marital property (equitable distribution). Both types of payments are nondeductible personal expenses for the payer and tax-free income for the recipient.

Since payments to ex-spouses are often substantial, the issue of whether the payer can deduct them is often substantial too. Therefore, it is very important to consult a tax attorney like Gregory J. Spadea before signing the divorce decree. You can reach him at Spadea & Associates, LLC in Ridley Park at 610-521-0604.

Filed Under: Family Law Tagged With: , , , , ,

What I Need To Know To File For Divorce In Pennsylvania

November 5, 2012 by

Divorce definition in dictionary
Deciding to file for a divorce can be a long and emotional process that affects you and those around you. Below is some preliminary information to consider.

1. If you have decided to file for divorce in Pennsylvania, you must first determine if you meet the jurisdiction requirement for Pennsylvania.

If you or your spouse have been living in Pennsylvania for more than six months, you may file for divorce in Pennsylvania. The county you file in can be the county your spouse lives in. If your spouse no longer lives in Pennsylvania, you may file in the county you live in.

Determine the grounds for divorce

a. No-fault. The court may decree a divorce where there is mutual consent and it is alleged that the marriage is irretrievably broken or when the marriage is irretrievably broken and an affidavit has been filed alleging that the parties have lived separate and apart for a period of at least two years.

b. Fault. Committed willful and malicious desertion period of at least one year; adultery; by cruel and barbarous treatment, endangered the life or health of the injured and innocent spouse; bigamy; incarceration for at least 2 years; offered such indignities to the innocent and injured spouse as to render that spouse’s condition intolerable and life burdensome

2. Locate all documents and family records

a. Birth certificates of children
b. Financial records
c. Pay stubs
d. Mortgage note
e. Documents for investment properties
f. Titles to automobiles
g. Bank statements
h. Insurance policies
i. Most recent credit card statements

3. When going through a divorce, you want to remember that your words and actions will be looked at under a microscope. Therefore, although it is emotional, you want to be mindful of your behavior at all times in a public setting, at home in front of family members and when using any form of social media. All of this will be taken into consideration in court.

4. Custody. There are two main forms of custody. Legal and physical.

a. Legal custody gives the custodian the right to make decisions about the child including medical and educational.

b. Physical custody is the physical possession of the minor child. This is generally the individual who the child lives with.

5. In any divorce proceeding, one must remember that property will be divided. Write down a list of items that you want to keep and those that you are willing to compromise.

There is simply too much at stake in a divorce proceeding to go through the process without an attorney to help guide you through the legal system. Feel free to contact David W. Edelman at Spadea & Associates, LLC in Ridley Park, PA at 610-521-0604.

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