If you’re going through a divorce, one of the concerns at the top of your mind is likely the division of assets. The division of property is one of the most hotly contested aspects of many divorces, and, as such, you deserve experienced legal counsel and advocacy to fight for your rights and interests. Let a dedicated divorce attorney from Silverman, Tokarsky & Forman, L.L.C. help you seek a fair and favorable resolution to your property division matter.
For nearly 25 years, our firm has fought to protect our clients’ interests in divorce. Let us put our experience and commitment to results to work for you. Contact us today for an initial case review and get the help you need to ensure your financial future.
Types of Property in Divorce
In divorce proceedings, spouses and the court must characterize the property owned by the spouses. The primary classifications of property in divorce include:
- Marital property: Marital property includes all assets acquired by a couple during their marriage, including bank accounts, businesses, real estate, vehicles, collectables, and stocks/investments. Marital property may also include the growth in value during the marriage of assets that spouses may have acquired before marriage, such as retirement accounts and ownership interests.
- Separate property: Separate property includes all assets that a spouse owned before marriage. Certain types of assets acquired during marriage may also qualify as separate property, such as inheritances and separate gifts (gifts that donors specifically intended to benefit only one spouse). The increase in value of separate property may be considered marital property.
- Commingled property: Courts may determine that a spouse has converted their separate property into marital property subject to division by commingling it with marital assets. For example, a spouse may convert an inheritance into marital property by using it to fund the down payment for a marital home that deeded in joint names or by depositing the funds into a joint bank account.
Understanding Property Division Laws
Pennsylvania is an Equitable Distribution State. Courts in equitable division states must divide the marital estate fairly (which does not necessarily mean equally) based on a list of factors, such as:
- The marriage’s duration
- Each spouse’s contributions to the marriage (both financial and personal, including performing homemaking or child-rearing duties)
- The relative economic circumstances of each spouse
- The extent to which a spouse forewent educational or employment opportunities to support the other spouse’s pursuing of educational or business/employment opportunities
Complex and High-Value Property Issues
Property division in divorce may involve various complexities and challenges in cases where there are substantial assets and business interests. Common issues that may arise during equitable distribution in divorce include:
- Business interests: Dividing business ownership interests can become challenging due to contractual restrictions on transferring such interests or the infeasibility of having divorced spouses co-own a business. As a result, couples and courts may pursue alternative solutions, such as selling the business, buying out a co-owner spouse’s interests, or compensating a spouse for the value of their share of an ownership interest. Often, the value of the business must be determined by an expert.
- Real estate: Spouses may have disputes over the division of marital real estate, including the family home, vacation homes, and income properties. Spouses may contest the marital/separate nature of properties or dispute property valuations.
- Retirement accounts and pensions: Retirement accounts or the growth in accounts during the marriage also qualify as marital property subject to division. The distribution of a retirement account may require issuing Qualified Domestic Relations Orders, which instruct account managers to distribute a portion of benefits to the spouse or former spouse of the account holder.
- Debts/liabilities: Divorce involves the division of marital assets and liabilities. Thus, couples with significant marital debt may face challenges dividing the marital estate, as the court must fairly divide liabilities. Parties and courts may also use marital debts to balance the total division of assets and liabilities between spouses.
Protecting Your Property Rights
Spouses may have various avenues for protecting their property rights in the event of a divorce, such as:
- Prenuptial/postnuptial agreements: Couples frequently seek to avoid disputes over property division in divorce by negotiating a prenuptial or postnuptial agreement, in which the parties can designate specific property as separate or marital property, negotiate a specific property division arrangement, or mutually waive their rights to property division and support if they get divorced.
- Divorce/property settlements: Divorcing couples may negotiate a settlement of their property division dispute rather than referring the issue to the court for resolution. A couple may informally negotiate a settlement themselves or through counsel. We will guide you through this process to ensure that you receive a fair and reasonable settlement.
- Uncovering hidden income/assets: Unfortunately, some spouses may seek an unfair advantage during property division in divorce by concealing assets and income through various means. As a result, complex investigations to uncover hidden assets or calculate their actual values, including working with forensic accountants and expert appraisers, may be necessary.
Special Considerations in Property Division
Couples going through the process of property division in divorce may have various considerations as they pursue a fair resolution, such as:
- Spousal support, child support and alimony: The payment of spousal support, child support and post-divorce alimony is a primary consideration when partners separate and divorce. However, when couples negotiate property division in a pre/postnuptial agreement or divorce/property settlement agreement, they may consider spousal support, child support, alimony and property division together to reach a settlement that both spouses consider fair.
- Tax implications: Dividing marital property in divorce can have significant tax implications for couples. For example, when a couple decides or the court orders the couple to sell a marital asset and split the proceeds, the sale can trigger capital gains taxes that will cause the couple to lose some of the value of their asset to taxes.
- Effect of fault/misconduct: In Pennsylvania, courts may not consider a spouse’s fault or misconduct (such as adultery) when deciding how to divide the marital estate. The law requires courts to split marital property fairly by weighing a list of factors. However, courts may account for a spouse’s misconduct in seeking to conceal marital assets or transferring funds to thwart the spouses receiving their fair share of the marital estate.
Our experienced divorce attorneys can help you protect your rights to the assets and wealth you’ve built during your marriage. Contact Silverman, Tokarsky & Forman, L.L.C. for an initial consultation with a seasoned divorce lawyer, and let’s discuss your options for protecting your rights during property division in divorce.
