A major component of the resolution of a divorce is the payment of alimony. The determination is complicated, and is dependent on 17 factors specifically set forth in the Pennsylvania Divorce Code. These factors include: 1) the relative earnings and earning capacities of the parties (that is, the actual earning capability of each party at the time of the award); 2) the ages and physical, mental and emotional conditions of the parties; 3) the sources of income of each party, including but not limited to medical, retirement, insurance or other benefits (or winnings); 4) the expectation of an inheritance; 5) the length of time the parties were married; 6) the contribution by one party to the education, training or increased earning power of the other party; 7) the extent to which one party’s earning capacity will be affected by having custody of children; 8) the parties’ standard of living during the marriage; 9) the parties’ relative educations; 10) the relative assets and liabilities of the parties; 11) the property either party had at the time of marriage; 12) the contribution of the spouse as a homemaker; 13) the relative

needs of the parties; 14) any marital misconduct; 15) tax ramifications; 16) whether the party being awarded alimony lacks sufficient assets to provide for their needs; and 17) whether the party seeking alimony is capable of self-support through employment.

The overall purpose of alimony is to effect economic justice, but it is a secondary remedy and applies only if economic justice cannot be achieved by way of a fair distribution between spouses of the property they own. Where appropriate, alimony may be awarded for either a definite or an indefinite period of time. The amount is based on the reasonable needs of the recipient, in accord with the standard of living during the marriage, and the ability of the payor to make payments. The payor does not have an absolute duty to ensure the recipient spouse experiences no decrease in standard of living.

Dispute Resolution covers a spec­trum of processes by which family law disputes may be resolved. The processes can be sequential, alternate or mixed. Each step can also have varying degree of formality, depending upon the circumstances of the matter.

Negotiation (consensual agreement directly negotiated by parties or by agent (attorney)

Mediation (consen­sual agreement facilitated by neutral mediator; parties still have attorneys)

Arbitration (private adjudicatory process; arbitra­tion award is binding with essentially no appellate review)

Court Litigation (traditional law suit decided by judge; decision binding but open to full appeal).

Each process has advantages and disadvantages which apply differently in every case. And, yes, the old maxim that no two cases are the same, is true. What works well in

one situation, fits poorly in the next.

Many people question whether arbitration, which has limited right of appeal, gives up too much by restricting appeal very narrow issues. This question has to be answered in context of the case. If a family law case turns on matters uncertain in the law, the right of full appeal can be very important. Much more common, however, are cases that turn on factual matters. In these cases, full appeal preserves little because of the standard of appellate review generally limits review of factual determinations in the trial court. In those cases, being able to pick your arbitrator/judge and select the schedule and degree of formality of decision, may be of much greater importance.

Another frequently asked question is whether mediation is binding? The answer is no and yes. A mediation agreement, itself, is not binding, unless and until it is followed with a formal written contract agreement signed by the parties. Then, the mediated result is binding, just as any other negotiated agreement will be.

What about oral agreements? Are they binding? Yes, oral agreements are binding, if you can prove whether the parties actually reached agreement and what the agreement terms were.

Where does Collaborative Law fit? Collaborative Law may involve negotiation or mediation, with stipulation that if agree­ment fails, the parties’ lawyers are replaced for later judicial decision in court or by arbitration. Many people find this stric­ture artificial and flawed, resulting in needless cost to the parties who then must retain new counsel to learn the case for it to proceed. The implicit, and in our view, wrongheaded assumption in collaborative law is that the lawyers, as lawyers, are the problem to be replaced where negotiations or mediation fail in a collaborative law process. This ignores logic and experience. First, a lawyer is the agent of the client; the client drives the train. If the train fails to stop at the station, it is because of the client/engineer, not the lawyer/conductor. Second, while there certainly can be instances where an agent can become a bump in the road to settlement, in our experience over the years, the best predictor to parties being able to reach settlement is their mutual good faith commitment to do so. Where that is present, reasonable compromise and settlement follow. Where one of the parties is intransigent, settlement become difficult, but the difficulty is with the party, not the lawyer, and there is certainly no reason why theother reasonable party should have to bear the additional cost to engage a new attorney to now become involved in the matter and have to learn what present counsel already knows. This is just an unnecessary duplication of time and cost.

Spousal support, alimony pendente lite (support during the pendency of the divorce action) and alimony payments (support after the entry of the divorce decree) 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. An unallocated order of support is an order of court that does not differentiate the components of the support award (spousal support or alimony and child support). 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 payor. The amount allocated for child support is not considered taxable income to the payee and not tax deductible to the payor. The Pennsylvania Support Guidelines assume that an order for support will be unallocated. If the support order is allocated, the Court may make appropriate adjustments, taking into consideration the tax effects of the award. Parties should therefore be aware of these tax consequences when negotiating support or alimony and child support awards as part of a settlement or consent order of court.