By: Carolyn Mirabile
Parents often use 529 Plans to save money for college. It is a great tool that provides a tax deduction in Pennsylvania and provides tax-free withdrawals so long as the funds are used for college-related expenses as defined in the Code. Under the new provisions which became effective January 1, 2020, 529 Plans may also be used to pay up to $10,000 towards student loans. This makes the 529 Plan an even better option for families saving for college. When parties are in a divorce, there are often disputes on how 529 Plans should be divided since a parent may withdraw money from the plan at any time, for any purpose. Due to this factor, the Court treats 529 Plans as a marital asset. The family law practitioner should make sure the Plan’s statements are exchanged between the parties on annual bases with one party providing an accounting of any monies used towards college expenses. If the funds are not depleted, the remaining money in the 529 account should be divided between the parties in the same percentage as the other divorce assets.
The fifth episode in our “Let’s Talk Family Law” series features our Attorney, Carolyn R. Mirabile and her special guest, Mark H. Bradford, CPA, CFE, as they discuss complex support issues in family law cases. Mark is an expert in forensic accounting at Asterion Consulting in Philadelphia. He specializes in assisting clients in family law matters and has been qualified as an expert throughout the Commonwealth. In this episode, Carolyn and Mark discuss several topics about how income is calculated in support proceedings. Carolyn reviews what the Pennsylvania Statute and Rules define as income, and Mark explains which documents are used by forensic accountants to determine net income available for support. Carolyn and Mark discuss an analysis of cash flow, including income from rental and commercial properties, compensation packages, lifestyle, retained earnings, trusts, and retirement plans.
Over the recent holiday break, my family and I went on vacation, which involved travel by plane. On the one hand, plane travel allows us to see things and do things our grandparents never dreamed of; but on the other hand, traveling at a reasonable price involves being confined in a metal tube and seated in an uncomfortable and claustrophobic position for hours on end.
For better or for worse, airlines put a small video screen in the back of the seat as “in-flight entertainment.” These screens and the accompanying audio never seem to work 100% correctly, but there is only so much reading you can do on a long flight.
On my recent trip, I decided to watch a few episodes of an HBO series called “Divorce.” I have since learned HBO canceled the series after three seasons. I’m certainly not a television critic, but I found the episodes fascinating because, at least the few I watched, focused on the effects of divorce on the people going through a divorce, not on the lawyers and their decisions and tactics; basically, my world from the other side of the street.
HBO describes “Divorce” as a comedy-drama focusing on one family’s rollercoaster ride through a divorce, which includes two of the wife’s also divorcing friends. The wife, Frances, is played by Sarah Jessica Parker; the husband, Robert, is played by Thomas Haden Church. In the episode I found most poignant, Robert is about to marry his pregnant girlfriend, who is about 25 years his junior. To avoid the whole situation, Frances decides to go to Miami with her hunky Dominican boyfriend. The plan hits a roadblock when Robert and Frances’s teenaged daughter disappears just before the wedding. Dad getting married is more than the daughter can handle. Frances tracks down their daughter, talks her into going to dad’s wedding and everything ends well.
Other themes running through the show are Frances’s under-employment, Robert’s new relationship taking a turn he never expected, both Frances and Robert continue to have feelings for each other, her one friend’s college-aged son who refuses to come home over break because he is sick of being caught in the middle of his parents’ disagreements, and the other friend being forced to live with her over-protective mother because her white-collar criminal husband is in jail and all of the family’s money is gone.
My point in all of this is not deciding if this show is good or not, but these themes and emotions of the characters are things I hear every day from clients. Realized if someone has gone so far as to create a television show about all of this, those concepts, emotions and themes are common for people facing divorce. You’re not alone.
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Family Law Attorneys Lawrence J. “Skip” Persick and John Zurzola delved into specifics about how to navigate family law cases in Pennsylvania as a man/father. In this episode, they discuss protection from abuse orders, divorce, child custody and child support. Skip and John also examine the financial side of things by reviewing earning capacity, tax credits and equitable distribution. They cover each of these topics in detail while explaining why it’s essential to always keep in mind the child’s or children’s best interest.
More often then not, clients are contacting us about loans they never secured, credit cards they never used, and even tax returns they never reviewed or filed for companies they never knew they owned. Sometimes, clients won’t learn about a loan or credit card their spouse secured in the client’s name until a debt collector contacted them or they received a letter in the mail for nonpayment. This can be damaging to a spouse’s credit and sometimes frustrating to correct.
The first action item a spouse should do when filing for divorce is to secure a credit report. There are credit agencies that will provide one free report a year. Ordering reports every six months from each of the reporting agencies allows a spouse to obtain valuable information and assistance in correcting financial issues. Additionally, clients should be proactive in getting documents for loans or mortgages to see if those documents list their names as the guarantor. Finally, a client should be proactive in filing tax returns and timely paying taxes. The complete tax return with all attachments should be thoroughly reviewed to gather all information about any outstanding tax liens or late filings. Always bring any financial concerns to the attention of your family law attorney who can provide resources and assist the client in correcting their financial record.
While two people are married, one spouse may take a back seat to the financial decisions another spouse is making. Usually, it doesn’t become important while the parties are together, and perhaps both parties are benefitting from the choices. But many years later, during a divorce, one spouse may find out they are a victim of identity theft. In an unprecedented step, New York State passed a law to add identity theft to the list of offenses that can serve as a basis for a protection order. In September, a new Texas law took effect amending its definition of identity theft to include cases in which an abuser compelled a victim to take on debt through force, threats or fraud. A recent survey of women who called the National Domestic Violence Hotline confirmed more than 70% of domestic violence victims said their partners had hidden financial information from them. Although Pennsylvania does not have a statute which specifically provides relief for identify theft, there are remedies in family court. If you have issues of identity theft, you should contact your family law attorney to discuss your options.
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Family Law Attorney John Zurzola gives all the info you need to know about how to get divorced in PA and NJ. In this episode, John goes step by step and answers common questions such as how to get divorced, how is property divided and how are child support and alimony calculated. John covers fault and no-fault divorce, common law marriage, equitable distribution, and Pre Nuptial Agreements and Post Nuptial Agreements. John also discusses the difference between a 90-day divorce and a separation divorce.
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I saw something on the news recently about a man in North Carolina who was awarded a $750,000.00 judgment against his ex-wife’s boyfriend for a tort called “alienation of affections.” The idea is that the boyfriend caused the jilted husband’s problems and, if not for the boyfriend, the husband and wife would still be married. Obviously the husband is not getting his wife back but, the $750,000.00 is supposed to help him fill that void.
For those of you who think you have a similar claim against a certain someone, if you live in Pennsylvania or 43 other states, you are out of luck. Pennsylvania has something generally referred to as an “Anti-heart balm” statute baring these types of claims. Specifically, 23 Pa.C.S.A. §1901, abolishes claims for alienation of affections and 23 Pa.C.S.A. §1902, bars similar claims for breach a contract to marry. Only North Carolina, Hawaii, Mississippi, New Mexico, South Dakota and Utah recognize the cause of action for alienation of affections. Also, remember that judgment for $750,000.00 is a lot different from $750,000.00 in hand. The husband in the North Carolina case still has to collect on that judgment.
Finally, in looking up the Pennsylvania statutes, there was a little surprise. There is an exception to 23 Pa.C.S.A. §1901’s abolition of claims for alienation of affection in the event that the defendant in the case is the parent, brother or sister of the plaintiff’s spouse. So, if your brother-in-law talks your spouse into walking out of your marriage, you still have the right to sue him.