If an interest in a small business or closely held business arises during the marriage, divorce will typically involve the distribution of the business to one spouse; a buy-out of the other’s interest is often necessary, as divorcing spouses cannot be expected to work together.  However, where spouses will have little contact, the court may award the business to both spouses.  Sometimes a trustee may be appointed to oversee the operations of the business.

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Categories: Business, Divorce, Support Tags: , , ,

What date is used to value marital property during equitable distribution of the marital estate?

Because the value of some assets fluctuates from time to time, the valuation date of marital property is generally the time of distribution unless the property is no longer in existence. In some instances, a date of separation value may be appropriate, where an asset, such as a business, is in the sole control of one of the parties during the period of separation. A date of separation value does not necessarily require the imposition of prejudgment interest, although such a claim may be asserted.

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Categories: marital property, property division Tags: ,

Marital Property is a property interest acquired between the date of marriage and final separation of husband and wife. Property is marital regardless of whether it is held in joint or individual names if acquired during this time period, unless it was acquired in exchange for pre-marital, gift or inherited property (non-marital or separate property).  Increase in value of non-marital property accruing during the marriage through final separation is, itself, also marital property.

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Categories: Divorce, Equitable Distribution, High Net Worth Divorce, marital property Tags: , , , ,

Spousal support, alimony pendente lite (support during the pendency of the divorce) and alimony payments are treated as taxable income to the payee and deductible to the payor for tax purposes.  However, child support payments are neither taxable income to the payee, nor tax deductible to the payor.  Court orders that include spousal support or alimony, and child support, are treated as taxable income to the payee and tax deductible to the payor, if such orders are categorized as unallocated.  When the order specifically allocates a particular amount as spousal support or alimony, and specifically allocates a particular amount as child support, only the amount allocated as spousal support or alimony is considered taxable income for the payee and tax deductible to the payee.
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Categories: Child Support, Custody, Divorce Tags: , , , , ,

During high net worth divorces when well-compensated spouses divorce, one issue that may arise is how to deal with stock options held by a spouse as part of his or her benefit package.  In Pennsylvania, such stock options are considered a form of deferred compensation designed to induce the employee/spouse to remain loyal to the employer; accordingly, Pennsylvania courts view stock options as analogous to pension benefits, and thus marital property.  The trick is to value the options at the time of divorce, even though it is unlikely that the options will be exercised at that date.

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Categories: Business, Divorce, property division Tags: , , , ,

A party’s right to claim one’s child as a dependent on income tax returns depends upon the number of overnight custody periods the child spends with that parent.  The parent with the greater number of overnight custody periods of the child during a tax year will be entitled to claim the child as a dependent on their tax returns for that tax year.  If the child spends an equal number of overnights with each parent during the year, the parent with the higher income is entitled to claim the child as a dependent on his or her tax return.  The parties can also agree on which parent can claim the child as dependent, but must execute the proper tax form to effectuate such agreement.

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Categories: Alimony, Child Support, Custody, Family Law

Almost unequivocally, divorcing parties are required to disclose the nature and extent of their finances, including income, cash flow, and assets.  Where a divorcing spouse owns a significant interest in a closely-held business, that party must disclose the full economic contours of the business upon request from the other party.  The court will enforce such “discovery” requests so long as the information sought is relevant to the financial picture of the business-owning spouse.  The exception is where the parties settle matters by agreement.  Recent Pennsylvania Superior Court precedent provides that a divorcing party may waive his or her right to full economic disclosure.  However, the waiver must be explicit, and the agreement must be made absent fraud, misrepresentation or duress.  If these requirements are met, the court will not inquire as to the “fairness” of an agreement.

At Wilder Mahood McKinley & Oglesby, we are highly skilled in navigating the waters of a complex divorce, where high value assets, such as a business, may be involved.  Indeed, “we wrote the book” on it.  If you have concerns regarding the impact a separation or divorce may have on your business, contact us for a consultation.

 

Categories: Business

Pennsylvania Divorce Code: waiting period reduced to one year.

The Pennsylvania General Assembly has passed a bill reducing the separation period for no-fault divorces from two years to one year.  Under Section 3301(d) of the Divorce Code, when grounds of irretrievable breakdown of the marriage are established, the court may enter a divorce decree after one year.  The law remains that if the parties agree, the court may also enter a divorce decree at any time after ninety days have passed since the filing of the divorce.  Governor Tom Wolf is expected to sign the bill into law, which would become effective in sixty days.

The change will only apply to divorces filed after the effective date of the law.  Divorces that have already been filed remain subject to the two year waiting period.  The only manner in which a litigant in a pending action could take advantage of the change would be if the action were withdrawn; however, the opposing party could object to a withdrawal, especially where he or she wanted to take advantage of the current two year waiting period.

The waiting period was last changed in 1988.  The Pennsylvania Bar Association lobbied for the change, arguing that such would help reduce costs for litigants, allow families to move on, and alleviate stress for children caught in unnecessarily delayed divorces.  Those opposed to the measure argued that there are times when a delay can be a good thing, and that the courts may intervene where litigants are purposely prolonging cases.  However, the new law is more in line with the waiting period in surrounding states.  The waiting period in New Jersey and New York is six months, while Ohio has no defined waiting period.

Wilder Mahood McKinley & Oglesby attorneys regularly update and revise the leading treatise on family law in Pennsylvania; we are thus poised to advise our clients on changes in the law such as the reduction in the waiting period.  We are qualified to advise our clients regarding the timing of a divorce, and the many other issues that our clients must consider.  Especially in cases of high net worth divorces, these issues can have large impacts on the financial aspects of a divorce.  If you have a question as to the impact of the law, our firm can provide the answers.

Divorce does not have to lead to financial ruin. In many cases, you can rely on our lawyers’ knowledge and reputation to secure the resolution of your divorce-related issues by agreement with your spouse.

We are litigators, but we can also facilitate agreement between you and your spouse. Our lawyers have the experience to advise you which course will resolve your divorce in the best manner possible, always in accord with the outcomes most important to you.

To consult with an experienced divorce attorney about your options in a divorce, contact us online or by calling 412-261-4040. We represent business and professional clients with family legal concerns across western Pennsylvania.

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Categories: Agreements, Business, Divorce, Family Law, Tax Issues

High Net Worth Individuals – Brad Pitt and Angelina Jolie – Enter Divorce

As would be expected, much of the nation engaged in a feeding frenzy of gossip when it was recently announced that Brad Pitt and Angelina Jolie would be going, to the extent such is possible where children are involved, their separate ways.  In light of their high net worth, it has been reported that the couple have a well-crafted prenuptial agreement in place, and thus the financial aspect of the divorce will be of little note (other than the astronomical wealth the couple enjoy).

However, what will be sure to play out in the public is the custody battle over the parties’ children.  The first salvo has already been fired, as an attorney for Ms. Jolie released a statement that she is seeking primary custody of the children “for the health of the family.”  When coupled with a report that the Los Angeles County Department of Children and Family Services was investigating an alleged confrontation between Mr. Pitt and the parties’ oldest son on an airplane, not much reading between the lines is required to spot an accusation by Ms. Jolie that Mr. Pitt is abusive to the children.  Sadly, Mr. Pitt’s parenting style, or at least speculation regarding it, will soon be public knowledge.  Mr. Pitt should expect such; the children don’t deserve such.
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Categories: Agreements, Alimony, Child Support, Divorce, High Net Worth Divorce

Again in 2016, Wilder Mahood McKinley & Oglesby supports the Allegheny County Bar Foundation and Public Service Committee with its donation to the Backpack Project.
The Project provides underprivileged students in Allegheny County neighborhoods with backpacks filled with school supplies.

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