Reblog: In Pennsylvania, What Happens if We Divorce Without Dividing Our Property?

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Most couples can agree to get a divorce, but few can agree on how to divide their property.  As a result, equitable distribution in Pennsylvania can be very costly and require the assistance of an attorney and experts, such as real estate appraisers and forensic accountants.  Many couples, therefore, either choose to not or cannot afford to utilize equitable distribution.

What happens to the marital property then?  Who owns the property?  Who can possess the property?

The answer is enunciated in 23 Pa.C.S. § 3507(a), but understanding the statute requires an understanding of the legal terms it employs.  The two terms are “tenancy of entireties” and “tenancy in common.”  When a husband and wife purchase/receive property, they own it as “tenants by the entireties.”  Essentially, they own it jointly and there is an automatic transfer of the property from one spouse to other upon the death of one spouse.  Prior to the conclusion of equitable distribution, the court can step in and divide this property between the spouses “equitably,” based on the factors in 23 Pa.C.S. § 3502.  Once the divorce is concluded, however, the property converts to “tenancy in common,” and the ex-spouses own it as “tenants in common.”  Tenants in common are more of partners.  They own the property equally in separate shares.  One tenant in common could sell his or her share or will it any one they want.  The property will not automatically pass from one tenant in common to the other.

The conversion of the property can cause issues if either party wants to pursue their share of the property in court.  At any time, either party could file for the sale of the property, so that the proceeds can be divided equally between the parties.  This could be to the detriment of one party if in equitable distribution the could had the power to grant them 60% of the equity in the property, but now, because of the divorce and conversion, the court is capped at 50% of the equity.

This also creates the risk for unfair surprise and a lot of financial uncertainty.  For example, if both spouses own a house, divorce without pursuing equitable distribution, and one spouse voluntarily moves out of the home, at any time that ex-spouse could file an action with the court to force the sale of the other ex-spouses home.  The house will either be sold or the ex-spouse residing in the house will need to buy-out the other ex-spouse.  These are only some of the negative consequences of not pursuing equitable distribution.

The best alternative to a nasty fight over property is to reach an agreement on how to divide the property between of you.  If this occurs, it is strongly recommended that even you hire an attorney to prepare a property settlement agreement rather than simply divorcing without addressing your property issues.  Failure to do so could be disastrous or cause issues with lenders.  The property settlement agreement can properly avoid the surprise and financial uncertainty described above.

If you have any questions regarding the division of marital property, please contact me directly at mhovey@gmail.com  Thank you.

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Reblog: In Pennsylvania, Can I Force My Spouse to Move Out of Our Home?

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A common scenario after a husband and wife separate is neither party wants to move out of the marital residence/home.  For a variety reasons (e.g., financial, children, proximity to work, hope for reconciliation, spite, etc.), the parties remain in the same home, as roommates and attempt to maintain as much normalcy and civility as possible.  Often, unfortunately, the parties cannot make it work and one, or both, of the parties eventually wants the other other spouse out of the home.  The question is presented then: how can I force my spouse to move out of the house?

23 Pa.C.S. § 3502(c), “Family Home,” provides that “the court may award, during the pendency of the action or otherwise, to one or both of the parties the right to reside in the marital residence.”  In legal terms, we refer to this as filing “exclusive possession of the home.”  It is strongly recommended that you hire an attorney to prepare and prosecute the Petition for Exclusive Possession on your behalf.

In determining to whom to award exclusive possession of the home, the court will consider a variety of considerations, such as whether the party seeking relief can afford to maintain the home on his/her own, the impact of the award on any children, whether the other party can afford independent housing, any marital misconduct of the parties, and other considerations.  As a result, be especially prepared to demonstrate the financial abilities of both parties.  The court can also limit the award of possession of the home.  In other words, you could be granted the home during the pendency of the divorce, but in equitable distribution, the home is awarded to your spouse as part of the division of the marital estate.

If you or a loved one has any questions about removing a spouse from the marital residence, please contact me directly at mhovey@gmail.com.  Thank you.

Reblog: In Pennsylvania, Who Owns the Engagement Ring?

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I have encountered the question of who owns an engagement ring, the giver or the receiver, more often over drinks at a party and met with laughter than during a client consultation when it is met with trepidation, but it happens. The question is especially important if the engagement ring is also a family heirloom. Imagine if the engagement ring used is a 100 year old 2.0 carat Tiffany’s engagement ring originally given by your grandfather to your grandmother, both of whom are now deceased. The implications of the engagement, especially if it suddenly ends, quickly become very real, serious, and relevant.

In 1999, in Lindh v. Surman, 742 A.2d 643 (Pa. 1999), the Supreme Court of Pennsylvania definitively answered the question central to this article and ruled that engagement rings are the exception to the general rules. It held that an engagement ring is a conditional gift to the receiver. The condition is the marriage of the parties. In other words, the engagement ring is a gift to the receiver, but ownership only transfers if the marriage actually happens. Upon the marriage of the parties, it becomes a gift between spouses and, as a result, according to 23 Pa.C.S. § 3501(a)(3), is marital property now owned by both spouses. If the relationship ends before the parties are married, then the engagement ring should be promptly returned to the giver, without any need for compensation.

The Court in Lindh also clarified that the reason for why the parties did not get married is irrelevant. In other words, the Court does not care who fault it is that the engagement was called off. The Court stated, “By way of illustration, should courts be asked to determine which of the following grounds for breaking an engagement is fault or justified? (1) The parties have nothing in common; (2) one party cannot stand prospective in-laws; (3) a minor child of one of the parties is hostile to and will not accept the other party; (4) an adult child of one of the parties will not accept the other party; (5) the parties’ pets do not get along; (6) a party was too hasty in proposing or accepting the proposal; (7) the engagement was a rebound situation which is now regretted; (8) one party has untidy habits that irritate the other; or (9) the parties have religious differences. The list could be endless.” See id. at 646 (citing Heiman v. Parrish, 262 Kan. 926, 942 P.2d 631, 637 (1997)). As a result, the test for ownership is straightforward: any transition of ownership is contingent on whether the couple gets married and, if they wed, the engagement ring is jointly owned by both spouses.

If you or a loved one has questions regarding the legality of an engagement ring, please do not hesitate to contact me at mhovey@gmail.com.