By Robert M. Going, Jr., Attorney

Divorce is always stressful, and when debt is involved, the process of splitting up assets and money owed can be especially tense. It’s important to know that every state differs in the way they handle the process of dividing marital property, assets, and debt. As a result, filing for divorce in a different state has a variety of consequences.

While every case is different, some commonalities apply to all types of divorces. This article explains how asset and debt distribution works in a divorce in the Keystone State.

Pennsylvania is an “Equitable Distribution” State

In Pennsylvania, the process of dividing marital assets and debts follows the laws of “equitable distribution.” Some states follow a “community property” system in which each person is entitled to half of all property regardless of what they brought into the marriage. But in the Commonwealth of Pennsylvania, laws demand more equitable solutions, so courts must work to determine fair and appropriate asset division based on a number of factors.

Equitable distribution is based on factors that can include considerations of timing. For example, if one spouse had a house prior to the marriage, that person may get to keep the house as part of the settlement. Prenuptial and postnuptial agreements may also play a factor.

The state generally classifies assets and income acquired before the marriage as personal property. Assets and income acquired during the marriage are generally considered “shared.”  These assets can include homes, businesses, retirement accounts, vehicles, art, or investments. Notably, inheritances or personal gifts receive during the marriage may be exempt.

In addition to striving to take a fair view of marital assets, Pennsylvania considers debts acquired during the marriage to be shared as well.

However, couples can choose how to divide their property without the help of courts. In mediation, the couple sits down, often with lawyers, and negotiate the distribution of assets and debts. Only when couples refuse to negotiate or can’t arrive at a shared agreement do courts become involved. A skilled negotiator can help manage the process and may get their party a better settlement.

Once settlements go to a divorce court, judges have quite a bit of leeway in how they divide debt and assets. They will factor in many variables, including the length of the marriage, the age of the spouses, current income, earning potential, whether the spouses were previously married, the scope of non-marital assets, how each spouse contributed to the wealth accumulated during the marriage, assets or debts accumulated during the marriage, the standard of living established, tax consequences of any award, and custody arrangements and responsibilities. Each judge will weigh these factors differently, so spouses are often surprised or displeased by decisions.

Because Pennsylvania is an equitable distribution state, Going and Plank advise divorcing couples to make every attempt to negotiate the distribution assets and debts through mediators and attorneys. Once the case is placed in front of a judge, each spouse loses much of their negotiation power.

Spouses are Not Automatically Responsible for Debt

While debts are divided in PA, it is possible to be exempt from some types of debt. For example, if a spouse bought a vacation house before marriage, they kept the house in their name, and they are keeping the house after the divorce, it’s unlikely that the other person will be responsible for any debts associated with that home.

However, these situations can be complicated. For example, if the other person took out a loan to make improvements on that same vacation house during the marriage, that person may be responsible for some or all of the outstanding debt on that loan. This is known as commingled debt, and it’s fairly common. Many spouses have credit cards in their name before marriage, but during the marriage, they spend on shared purchases like vacations and furniture. In that case, the credit card becomes a marital debt.

Any debt under both spouses’ names will likely continue to be the responsibility of both spouses. In negotiations, couples sometimes agree to take on debt in exchange for additional assets. A skilled divorce attorney from Going and Plank can provide advice on smart tradeoffs and potentially problematic compromises.

Protection Against Unfair Debt

In some divorces, one spouse has been, intentionally or unintentionally irresponsible with finances. In these cases, both spouses suffer the effects. One spouse’s behavior can impact the other in the form of poor credit ratings, liquidations, or even bankruptcy. But some things can be done to minimize financial risk.

A good divorce lawyer provides protection by including an indemnity clause in divorce agreements. This gives the client the power to seek restitution if their spouse doesn’t hold up their end of the agreement by missing or stopping payments.

An experienced divorce lawyer can also help include refinancing or liquidation in a divorce settlement. If a client is keeping assets, refinancing is a way to get their spouse’s name off the loan. For shared assets, selling the home and splitting the proceed is often the best solution.

As soon as the divorce process begins, take the spouse’s name off all credit cards and revoke their authorization to use those cards. The same goes for bank accounts. Cancel joint credit cards and close joint bank accounts.

If a person is responsible for paying debts in their spouse’s name, their spouse must make sure that person is making timely payments. Don’t assume they will follow through. The spouse should check on the payment status of accounts or get updates on their credit report so inactivity can be flagged immediately.

Why Hire a Divorce Lawyer?

While some couples are able to divorce amicably without issue, they are the exception. Most couples argue over assets and debts, and many are unaware of their rights and options in this stressful process.

Having an experienced family law attorney will help anticipate issues, understand if settlements are fair, and help avoid big issues down the road.

If you or someone you know is getting ready to divorce or needs help from a divorce lawyer, contact The Law Offices of Going and Plank today and find out what we can do for you.

Want to learn more about divorce in Pennsylvania? Check out these blogs:

The Divorce Checklist

7 Mistakes to Avoid When Filing for a Divorce

Do I Need a Lawyer to File for Divorce in Pennsylvania?

15 Ways to Reduce Stress, Confusion, and Delays

By Robert M. Going, Jr.,

Attorney

Divorce proceedings in Pennsylvania can be stressful, complicated, and overwhelming. It’s hard to keep track of the details when so many life-changing events are happening all around you. That’s why it’s important to try to take care of details early in the process.

If you’re a Lancaster County resident thinking about a divorce, if you’re separated, or even if you’ve already started divorce proceedings, you’ll need to prepare yourself and your family for a new way of life. To set the stage for less stress, less mistrust, and more cooperation, it’s smart to avoid tense situations by taking care of some tasks early in the process.
A family law attorney at Going and Plank developed this divorce checklist to help you prepare in ways that can save you time, aggravation, and even money down the road.

Lancaster Divorce Tip: Gather Documents Early

Start gathering documents as soon as you have decided to pursue a divorce, even if you have not contacted a divorce lawyer yet. If you start collecting these documents before your divorce is filed, you will be able to acquire many of these documents without much resistance or delay. If you wait until after you file, you may find your spouse can hold up or block some requests, resulting in slower deliveries and increased costs. Once you acquire these important legal and financial documents, make two copies; one for your Lancaster County divorce attorney, and one to store in a location inaccessible to your spouse, such as at a relative’s home or a safe-deposit box.

These documents may include the following items;

• Federal, state, and local tax returns for the past five years for you and your spouse
• Proof of current income, such as pay stubs or an employment contract
• Proof of spouse’s current income, such as pay stubs or an employment contract
• Bank statements, including certificates of deposit and money market accounts
• Pension and retirement account statements
• Benefits statements from employers that include details on health insurance, life insurance, retirement funds, use of company vehicles, dividends, profit sharing, stock-options, dental insurance, or other benefits
• Documentation on stock portfolios, stock options, and trusts
• Documentation on mortgages and property tax statements
• Credit card statements
• Loan documents, including loans for vehicles, education, and home equity loans
• Utility bill statements
• Documentation for recurring bills, such as tuition, daycare, tutoring, activities, club dues, lawn maintenance, etc.
• A worksheet outlining your monthly budget
• Life insurance policies
• Check with a divorce lawyer at Going and Plank to see if your situation requires any additional documentation.

Lancaster Divorce Tip: Inventory Personal Items Before the Divorce

In Pennsylvania, all property that you owned before your marriage is personal property and usually remains yours after a divorce. Personal property may include an inheritance, a gift given to you prior to marriage (such as your grandfather’s watch), legal settlements such as a personal injury settlement, furniture and home items you owned before the marriage, and a woman’s engagement ring.

Property acquired during a marriage is considered marital property. Marital property includes your wedding band, gifts from your spouse, the property you purchased during your marriage, and home items purchased during your marriage.

It’s smart to inventory all these items and take photos or videos of them as soon as you can. Once they disappear, it will be difficult to prove their existence or your ownership.

Lancaster Divorce Tip: Remove Irreplaceable Items from Your Home

If you suspect that your spouse may claim some items during a divorce, you may want to remove them from your property. Things like photos, mementos, favorite books, albums, family heirlooms, or other items with special personal meaning can mysteriously disappear during a heated divorce. However, if these items were purchased or acquired during your marriage, they are marital property and must be declared as part of the divorce process.

That being said, if you have items that you really want to keep, it’s smart to quietly box them up and remove them to a safe location – your parent’s attic, a bank’s safe-deposit box, or some other location that is off limits to your ex. Contact Going and Plank to find out more about protecting your possessions in a divorce.

Lancaster Divorce Tip: Pull Your Credit Report

Avoid being surprised by unpaid bills or resulting collections by pulling your credit report. A divorce lawyer from Going and Plank can help you make sure you know about all credit cards, mortgages, and loans made with your name on them.

Lancaster Divorce Tip: Redirect Your Mail

Your spouse has the right to open mail that is addressed to both of you, but as your divorce continues, you will get mail from attorneys, creditors, and your bank that you may want to keep private. Open a PO box, and redirect mail delivery to avoid finding out that your ex accidentally or intentionally opened a confidential letter.

Lancaster Divorce Tip: Open a New Bank Account at a New Bank

It’s smart to open up a new account and try put enough money in it to cover at least a few months of expenses. Choose a new bank, to avoid confusion between accounts. Your new account ensures that you’re able to keep some money on hand, even if your spouse decides to close down credit cards or empties joint accounts.

Lancaster Divorce Tip: Change Your Privacy Settings on Social Media 

Many social media accounts allow almost anyone to access your posts, photos, and your contacts unless you go into privacy settings to restrict access. If you have social media accounts like Facebook, Twitter or Instagram, you can choose privacy levels by logging into your account settings. During your divorce period, limit your spouse’s access to these accounts as much as possible. You can remove your spouse from your list of social media connections (for example, unfriend on Facebook) and they will not be notified of this change.

Lancaster Divorce Tip: Add Passwords

Does your computer have a password? Does your phone require a PIN? What about your tablet or cloud-based devices like Alexa and Echo? Does your vehicle have voice-activated phone, text or email functions? Now is the time to install passwords and require PINs. Make sure your spouse can’t access your emails, texts, or personal information on any type of device.

Lancaster Divorce Tip: Change Your Approach to Social Media 

As you begin divorce proceedings, you should limit or refrain from posting on social media like Facebook, Twitter, or Instagram. Social media can be used in divorce proceedings as evidence that you are not behaving in optimal ways. Even seemingly innocent posts can be twisted to suit your spouse’s purposes. Don’t post photos of yourself out with your friends, drinking, smoking, spending money, traveling, or on vacation. And never post disparaging comments about your spouse, your ex, or their friends or associates. The best rule during a divorce proceeding is to “go dark” and stop posting until the divorce is finalized.

Lancaster Divorce Tip: Change Your Existing Passwords

Yes, it is a pain to change dozens, even hundreds, of passwords and PINs, but it’s possible, (even likely) that your spouse knows many of the passwords to email accounts, bank accounts, social media, online retail accounts like Amazon or E-Bay, along with a lot of other personal information. Play it safe and take the time to change passwords.

Lancaster Divorce Tip: Think Through a Parenting Schedule

You may have already thought about how shared custody might work. However, it’s also smart to sit down with a calendar and mark out birthdays, the start and end of school, holidays, and special family dates to make sure you’ve thought through how you will handle these dates.
It’s also helpful to consider your approach to doctor appointments, how you’ll handle babysitting needs (will you be your spouse’s first choice to watch the kids, or will you take this option out of the equation?) What happens when a spouse has to travel for work or a family emergency? Who will take kids to practice?

It’s important to think through these issues and develop a plan for addressing them, early on, before the stress of divorce starts making unbiased decisions more difficult. Going and Plank is experienced in Pennsylvania custody law, and our lawyers can help you create fair custody agreements in Lancaster County. Contact us today for more information.

Lancaster Divorce Tip: Take Advantage of Medical Benefits While You Can

If you are under your spouse’s health care policy, it makes sense to take care of all medical needs before you file for or finalize the divorce. Get your teeth cleaned if you have dental insurance. Get your prescriptions filled if you have a prescription plan. Get your checkups and shots, or complete the procedure you’ve been postponing.

Lancaster Divorce Tip: Explore Your Health Care Options

If your spouse took care of health insurance, you’ll need to explore your own health care options now. Your place of employment may offer a plan, or you may want to rethink your employment, so you have access to health care through an employer. Or you may want to look for an individual insurance option in the health care marketplace.

Lancaster Divorce Tip: Change Beneficiaries

Make a list of items that will require you to change the beneficiary. This can include a will, insurance policies with a life insurance component, retirement funds, investment funds, and pensions. Going and Plank can help you update wills, trusts, and estate plans as part of your divorce. Contact us today to learn more.

Lancaster Divorce Tip: Create a Support Network

While divorce sometimes feels lonely, don’t forget that you’re not alone. Everyone needs a support network to help them work through the emotional challenges of a divorce. While many of your close friends and family can provide emotional comfort, also seek out friends and family members who have gone through a divorce in the past. This might be a good time to join a support group or find a professional therapist.

A free or low-cost divorce support group is just a Google search away. Many insurance plans cover some or all of the expense of professional therapy, so check your policy. And choose a divorce attorney who has your best interest in mind. The Lancaster County attorneys at Going and Plank can help you navigate successfully through one of the most difficult times in your life. Contact us today to discuss your divorce or custody situation.

****

Divorce can be stressful and overwhelming, but at Going and Plank, we’re committed to helping you through the process with compassion. After all, we’ve practiced Family Law in Lancaster County for over 60 years. The Family Law team at Going and Plank takes the time to find out what is most important to you, fight for your rights, and help you reach a fair settlement that will set you up for success in your new, post-divorce life.
Contact us today to schedule a consultation.

By Robert M. Going, Family Law Attorney

Deciding to file for divorce is not an easy decision, and the process is rarely straightforward. Even small oversights or seemingly minor decisions can backfire. Maybe that’s why, at the end of a divorce, so many people have discovered that they’ve made mistakes during the process that resulted in more stress, lower awards, or more expense.

If you are one of the many people considering divorce in Lancaster County and surrounding areas, there are several common mistakes you can avoid to help you work towards the best possible outcome.

Mistake #1: Using the Divorce Process as a way to Extract Revenge

Many divorces involve some type of hurtful behavior on the part of one or both spouses. That’s why it’s completely normal to feel hurt and angry at the end of your marriage. However, being able to look at your divorce as a business deal (instead of a way to settle the score) can help speed through the process, save money, put less stress on your family, and still result in a favorable divorce settlement. A family law attorney from Going and Plank can advise you on strategies that can help you avoid an unnecessarily long or exceptionally confrontational process. We also help with child custody matters and agreements, and can even help you file for a Protection from Abuse (PFA) order.

Mistake #2: Skipping the Separation Agreement

You might think that your divorce will be quick and easy and want to skip the trouble of filing for a separation agreement. Some couples rely on verbal agreements. However, a separation agreement is a legally-binding option that will ensure that finances, custody agreements, and spousal support is fully documented and enforceable. Separation agreements can help you map out who pays for the mortgage, car payments, insurance, and if you are the lower-earning spouse, can also set up alimony payments. Establishing guidelines for temporary child support before the divorce is settled can ensure your child’s basic needs are met, including food, clothing, housing, daycare, and medical expenses. A family law attorney from Going and Plank can mediate a separation agreement and can also lead you through the processing of filing with the courts for temporary support and custody orders.

Mistake #3: Forgetting About Investments and Retirement Funds in Divorce Settlements

While most people give a lot of consideration to the what will happen to their home, their children, and their property in a divorce, many forget to consider the division of non-liquid assets such as pensions, 401ks, 403bs, IRAs, life insurance, brokerage funds, and stock option plans. All retirement, investment, and insurance assets are communal property and should be addressed in a divorce settlement.

Once the division of assets is decided, these types of transfers can be complex and require a thorough understanding of divorce and tax laws in Pennsylvania. Some funds can be transferred tax and penalty-free with a certified divorce decree, with assets require a Qualified Domestic Relations Order in order to allow tax and penalty-free transfers. Contact Going and Plank to help you identify and assess all of your spouse’s assets, and to manage the distribution of assets in ways that make sense with your goals.

Mistake #4: Guessing Your Spouse’s Financial Assets

In Pennsylvania, there is a commitment to the protection of the family unit, but, unlike some other states, Pennsylvania divorce laws do not mandate a 50-50 split of assets. Instead, the courts consider a number of factors when dividing assets, including the length of the marriage, amount of assets, age, lifetime earning abilities of each spouse, and other factors. The first step to determining how assets will be divided is to identify all marital assets including bank accounts, investments, trusts, insurance value, retirement funds, business valuation, and more. The Pennsylvania Rules for Discovery in Domestic Relations Matters allow for the process of identifying, qualifying, and determining the value of all marital assets. However, some people try to hide or divert funds to avoid sharing them in a divorce. While some people believe that hiding net worth only comes into play with high-income families, in reality, people of all income levels can try to hide revenue, ownership, shares in companies, retirement funds, or other assets in a variety of ways. Many times the other spouse may not be aware that these funds or interests even exist. A family law attorney from Going and Plank can search for these types of assets and ensure that you obtain a fair and complete assessment.

Mistake #5: Delaying Custody Agreements

When there are children involved, it’s important to think through shared custody arrangements early, even before your spouse has moved out. Using a lawyer as a mediator not only diffuses emotional reactions, it also gives you access to an experienced advisor who can tell you what is “normal,” what is unusual, and how other families manage shared custody and child support. Of course, every situation is different, and “normal” may not be right for your family. Contact us at Going and Plank to explore out your options, to help you compare custody arrangements, and to formalize your agreements in ways that are legally binding.

Mistake #6: Not Taking Social Media Seriously During Your Divorce

While social media has become an important part of many people’s lives, it can also hurt you during a divorce proceeding. Sharing your exploits, adventures, or otherwise trying to communicate that you are not hurting emotionally or financially from your divorce may feel empowering at the time, but those posts can work against you in court. During separation and divorce, it’s wise to reduce the amount of personal information you share about yourself on platforms like Facebook and Twitter. This is not a good time to use social media to tell others about what you do with your time, where you’re going, who you spend time with, or even where you vacation. A family law attorney from Going and Plank can advise you on the best approach for your situation.

Mistake #7: Putting off Meeting with an Experienced Divorce Attorney

Whether you call them family law attorneys or divorce lawyers, this is the time to work with an attorney who specializes in divorce law to protect your interest and the interest of your dependents. At Going and Plank, we can help you during the separation and divorces process and can continue to represent you as you reevaluate custody agreements, child support, and alimony down the road. When you talk to our team at Going and Plank, we’ll help you understand the process, make sure you do everything needed to protect yourself, your assets, and the life you’ve built for yourself and your family. Once you file for divorce, a divorce lawyer will make sure you understand your options before you make important decisions. We’ll help you manage filing deadlines, help identify, and uncover, your spouse’s assets, advise on custody agreements, help you understand child support and alimony options, and help you deal with Protection From Abuse (PFA) filings.

While your finances may seem uncertain when filing for divorce, we’ll work with you to understand costs and fees and make sure that our services are formatted in ways that won’t cause undue financial stress. For many of our clients, our divorce negotiation services end up saving them money in the form of more favorable settlements. Contact us today to explore your options, and to talk more about your personal situation.

The Law Offices of Going and Plank are proud to participate in the Hyatt Legal Plan.