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My firm PBKG LLC is proud to announce that five of our partners (David Pollock, Todd Begg, Candice Komar, Dan Glasser and Brian Vertz) have been named to the 2011 edition of The Best Lawyers in America.

Since its inception in 1983, Best Lawyers has become universally regarded as the definitive guide to legal excellence. Because Best Lawyers is based on an exhaustive peer-review survey in which more than 39,000 leading attorneys cast almost 3.1 million votes on the legal abilities of other lawyers in their practice areas, and because lawyers are not required or allowed to pay a fee to be listed, inclusion in Best Lawyers is considered a singular honor. Corporate Counsel magazine has called Best Lawyers “the most respected referral list of attorneys in practice.”

It is important to note that the lawyers listed in Best Lawyers have no say in deciding which practice areas they are included in. They are voted into practice areas entirely as a result of the votes they receive from their peers. 

This is the second consecutive year that I have been voted into The Best Lawyers in America.  The Best Lawyers in America® 2011 (Copyright 2010 by Woodward/White, Inc., of Aiken, S.C.).

In Balicki v. Balicki, 2010 PA Super. 134 (July 30, 2010), the Superior Court considered the husband’s argument that the alimony order provided more income to his ex-wife than she could spend (as shown by her budgetary expenses). The trial court in its opinion justified the alimony award by noting that the wife would pay income tax on her alimony award, thereby reducing the after-tax dollars available to her. The trial court presented a seemingly reverse-engineered analysis of available income sources to prove that the income nearly matched wife’s claimed budgetary needs, thereby vindicating the result.

An important element of the trial court’s opinion was its calculation of the ex-wife’s income tax liability arising from her alimony award. The trial court held, and the Superior Court agreed, that a tax “gross-up” may be warranted under 23 Pa.C.S. § 3701(b)(15), one of the 17 statutory criteria for judging alimony claims. The trial court’s tax gross-up was triple the provision recommended by the master, but the trial court also disapproved the master’s inflated budget. These two adjustments offset each other, and the trial court affirmed the result reached by the master on different grounds.

The husband argued that the trial court had no right to reconsider the tax gross-up since neither party raised the issue in their exceptions from the master’s report. The Superior Court agreed that the trial court was not limited to the issues specifically raised on exceptions. Ironically, the Superior Court dismissed all of the husband’s allegations of error pertaining to specific items on wife’s budget, holding that they were waived because they were not specifically identified in the § 1925 statement.

All of the ex-wife’s issues on appeal, most of which seemed to be calculated to counter-balance husband’s appeals, were dismissed by the Superior Court, which affirmed the rationale of the trial court.

The Supreme Judicial Court of Massachusetts ruled recently that agreements between spouses who plan to continue their marriage but wish to define their legal rights and obligations in the event of divorce are enforceable in that state. Some states (notably Ohio) do not permit spouses to execute agreements waiving their marital rights unless they are actually pursuing divorce, and the law of many states is unsettled. In its recent decision, the highest court of Massachusetts joined the ranks of states (including Pennsylvania) where such “post-nuptial” agreements are permissible.

Post-nuptial agreements may combine certain elements of prenuptial agreements with features of marital settlement agreements. Post-nuptial agreements may divide marital property between spouses, protect their separate property, and establish or restrict spousal support and alimony, like settlement agreements. Post-nuptial agreements can also protect family businesses, inheritance, and other separate property to be acquired in the future, just as prenuptial agreements do.

In Ansin v. Ansin-Cravin, 457 Mass. 283, 929 N.E.2d 955 (2010), the husband and wife entered into a post-nuptial agreement two years before their eventual divorce. The post-nuptial agreement in that case gave the parties a chance to attempt marital reconciliation while removing the financial risk of taking “one last chance”. The couple had been married for nineteen years at the time of their agreement. At that point, the husband separated from his wife and advised her that he would not return unless she would sign an agreement. She hired legal counsel, investigated the nature and value of their assets, and negotiated the terms of the agreement.

Having signed the agreement, the husband and wife reconciled for nearly two years. Ultimately the reconciliation did not last, but the parties were able to avoid the stress and expense of protracted divorce litigation by having an agreement in place (at least, they would have avoid those pitfalls if the wife had not challenged the validity of the agreement). The Massachusetts court applied the same standards to post-nuptial agreements as many states employ when judging the validity of prenuptial agreements and settlement agreements: (1) availability of independent legal counsel; (2) full and fair disclosure of financial resources; (3) absence of fraud or duress; and (4) reasonableness of the provisions for each spouse.

Pennsylvania has long recognized post-nuptial agreements, and for good reason. When entering into a post-nuptial agreement, full and fair disclosure is an essential element; and it may be important to engage legal counsel. While formbooks and software programs may contain “boilerplate” prenuptial agreements, post-nuptial agreements are very different and require the skill of an experienced family law attorney.

News stories were posted today on CNN.com and VanityFair.com claiming that a growing number of people are using Facebook to cheat on their spouses…. and getting caught! Divorce lawyers have discovered that many careless cheaters leave obvious evidence of their infidelity on social networking sites, where anyone can find it. In fact, a site called FacebookCheating.com has recently popped up to hype this phenomena. According to CNN, “a recent survey by the American Academy of Matrimonial Lawyers found that 81 percent of divorce attorneys have seen an increase in the number of cases using social networking evidence during the past five years. More than 66 percent of those attorneys said the No. 1 site most often used as evidence is Facebook with its 400 million registered users.”

So if this internet evidence of cheating is out there, how can it be useful in a court where most divorces proceed under the no-fault laws? In my experience, Facebook and other social networking sites can be gold mines of useful evidence that can help parents to win custody cases. Too many people post pictures and stories of their drunken or bawdy behavior on their profiles. Facebook evidence can prompt a judge to question a parent’s ability to observe appropriate values and boundaries with their children. Evidence of cheating is not necessarily relevant to the economic aspects of most no-fault divorces, but it can be a defense to spousal support or alimony under some circumstances. If you discover a spouse’s Facebook profile with damaging evidence of cheating, contact your family lawyer immediately to find out what to do next.

My friends at Crawford Ellenbogen LLC  know a lot about taxes. One of their principals, Victor Dozzi CPA, recently sent me a great tip about kids who are earning income from summer jobs, and I asked him if I could share it with you. He agreed, so here it is:

Are your children working at summer jobs this year?  If so, here are some tax reminders.

* If a child did not owe any income tax last year and doesn’t expect to owe any this year, the child can claim “exempt” when completing the federal withholding allowance form (Form W-4). This will eliminate having federal income tax withheld from his or her paychecks.

* For 2010, your child can earn as much as $5,700 without owing federal income tax. There will still be withholding from your child’s paycheck for a number of other taxes, including: social security, Medicare, PA, PA UC & perhaps local.

* As long as you provide more than half of your child’s support, you can still claim the child as an exemption on your 2010 tax return.

* Earnings from a summer job will qualify a child to contribute to an IRA – up to $5,000 or the child’s 2010 earnings, whichever is less. If your child would rather spend his earnings than save for retirement, you could gift all the cash, or agree to match what your child saves. As long as the amount put into the IRA doesn’t exceed the child’s wages (or the $5,000 limit), it doesn’t matter where the cash comes from.

The principals of Crawford Ellenbogen (Joan, Victor, and Barb) can provide great advice and personalized service – it’s just a phone call away.

Department of the Treasury Required Disclosure

In accordance with IRS’ Circular 230 we are required to advise you that any written advice we provide to you cannot be used for the purpose of avoiding penalties under the Internal Revenue Code.

A thorny issue that arises early in many divorce proceedings is the question of who may live in the marital residence during the separation period. Generally speaking, the courts will not evict either spouse from the marital residence during separation if they are living together peacefully and have not voluntarily moved away. This principle leads some devious spouses to seek questionable or even fraudulent protection from abuse (PFA) orders. Spouses who have quick tempers must avoid confrontations that can provide legitimate grounds for a PFA order, which are granted when a victim can prove “a reasonable fear of imminent bodily harm.” Some judges will grant PFA orders even where the only grounds are a verbal threat or demonstrative act (such as smashing or throwing an object in the presence of a spouse).

In theory, the courts are authorized by statute to award exclusive possession of a marital residence on an interim basis pending equitable distribution. 23 Pa.C.S. § 3502(c); Laczkowski v. Laczkowski, 496 A.2d 56 (Pa.Super.1985). In practice, exclusive possession is most often awarded to the spouse who remained in the home while the other spouse willingly vacated. If the residence is nonmarital property or titled in the name of one spouse, the titled spouse may have an advantage. The level of conflict between the parties, the ability of a spouse to afford alternate housing, and the effect upon custody arrangements are other likely considerations. An exclusive possession order does not preclude the court from awarding the residence to the excluded spouse in equitable distribution. See, e.g., Kokolis v. Kokolis, 82 Pa.D. &C.4^th 214 (Allegheny Co.2006), affirmed, 927 A.2d 663 (Pa.Super.2007). Yet, practically speaking, it can be very difficult for a spouse who is evicted from the marital residence to return. This is one of the first issues that a spouse should discuss with a lawyer at the beginning of any divorce proceeding.

An article in the ABA Journal this month focuses attention on the growing problem of international child support and custody disputes. With the advent of global travel and internet relationships, more and more parents are facing the challenge of enforcing child support and custody orders across national boundaries. Some parents describe experiences that sound like scenes from a James Bond movie, as their children have been abducted around the globe. International treaties have been helpful but are very limited in their ability to bring an end to such practices.  The Hague Convention on Civil Aspects of International Child Abduction provides a mechanism to enforce custody orders and allocate jurisdiction in custody disputes, but only 82 nations have ratified the treaty. China, Japan and India are examples of major countries who have not ratified the custody treaty.

An international child support treaty (The Hague Convention on the International Recovery of Child Support) was drafted in 2007. It has been signed by only one country, the United States, and even our Senate has not ratified the treaty. Child support enforcement remains a difficult problem for parents who exes have retreated to foreign lands. The ABA article cites the U.S. Supreme Court’s recent decision in Abbott as a hopeful sign that our courts will enforce these international treaties, but we cannot always expect reciprocal action abroad. This is one reason why child support agreements can be useful. A contract between parents may not be strictly enforced everywhere in the world, but it can be the “foot in the doorjamb” that makes a difference.

In Pennsylvania, marital property is divided in a process known as equitable distribution. The method prescribed by the Divorce Code is a “dual classification” equitable distribution scheme because marital property is distinguished from nonmarital or separate property (terms which are used interchangeably). In other jurisdictions governed by an “all-property” equitable distribution scheme, the divorce courts do not distinguish between marital and nonmarital property.

Pennsylvania does not recognize community property, which is a method by which married persons may hold title to property in certain jurisdictions, creating mutual fiduciary duties between spouses and usually resulting in an equal division upon divorce. See, Drake v. Drake, 555 Pa. 481, 489-490, 725 A.2d 717, 720-721 (1999); Wilcox v. Penn Mutual Life Ins. Co., 357 Pa. 581, 55 A.2d 521 (1947). Instead, married persons in Pennsylvania may hold joint title to property as tenants by the entireties (“per tout et non per my”), which cannot be severed by partition or attached by creditors of an individual spouse. See, Fazekas v. Fazekas, 727 A.2d 1262 (Pa.Super.1999). Entireties property ceases to exist upon marital dissolution, 23 Pa.C.S. § 3507(a), and unlike community property, is not presumed to be divided equally.

Pennsylvania is in the minority of jurisdictions where the increase in value of separate property is subject to equitable distribution, regardless of whether the appreciation is active or passive. In most states, the appreciation of separate property due to inflation or market forces is not divided in equitable distribution. This approach was advocated in the early days of the Pennsylvania Divorce Code. See (Hon.) Emanuel A. Bertin, Equitable Distribution: Preparing the Case for Settlement or Trial 92-94 (PBI 1982). The Superior Court soon took a different view. Aletto v. Aletto, 537 A.2d 1383 (Pa.Super.1988); Anthony v. Anthony, 514 A.2d 91 (Pa.Super.1986).

The preceding is an excerpt from a new book published by the Pennsyvlania Bar Institute (2010), entitled “Slicing Up the Pie: Equitable Distribution in Pennsylvania” (David Ladov, Editor).

Divorcing spouses often ask me about credit card debts and loans. While a divorce court may assign responsibility for paying credit card debts and loans that were incurred during the marriage, the court generally lacks jurisdiction over the creditors. In other words, the divorce court cannot force the credit card issuer to collect from one particular spouse if both spouses were cardholders.

If both spouses’ names are on the credit card accounts or loans, then creditors may choose to collect from one spouse or the other or both, at their discretion. Surely, the divorce court can hold a spouse in contempt if he or she failed to meet his or her court-ordered responsibility to pay the debts, but that is cold comfort when the other spouse’s credit rating has been ruined and debt collectors are calling on the phone.

My thoughts? (1) Use marital funds to pay off marital debts. The divorce courts may give full credit, partial credit or no credit at all if one spouse uses his or her post-separation earnings to pay marital debt, but the courts will grant full credit if marital assets are used to pay marital debt. (Just be cautious about impairing cash flow for current expenses.) (2) The spouse who has greater income may have a greater ability to pay debts. (3) If the debts are excessive and income is minimal, consider bankruptcy.

This article contains some good information about credit cards and divorce.