Articles by Our Attorneys

Over the length of a marriage, couples accumulate both assets and liabilities. From positive earnings and purchases like investments and consumer goods, to debts like car loans and mortgages, you and your partner build both a personal and financial life together. In the event of a divorce, both assets and liabilities must be divided. This process is known as equitable distribution. In many cases, spouses, with the help of their attorneys, negotiate the division of these assets and liabilities, or the marital estate, which typically includes cash accounts, investment and retirement accounts, the value of real property, vehicles, and other personal items.

In equitable distribution, it is common for one spouse to pay the other spouse some amount of money to offset the parties’ shared investment in a piece of marital property. For example, one spouse may keep the couple’s house, but will pay the other spouse in cash or investments to account for the other spouse’s ownership stake in the house.  The plan for how the parties will divide the marital property is written into a Property Settlement Agreement (“PSA”). A PSA is an enforceable contract that specifies each spouse’s obligations in the divorce.

Equitable distribution is complex enough on its own. But what happens when this process is complicated further by a spouse filing for bankruptcy? In November 2020, the Pennsylvania Superior Court reviewed the question of what happens when a spouse files for bankruptcy before paying a debt a spouse agreed to pay in a PSA? Through this case, the Superior Court significantly simplified the rule regarding marital debt and bankruptcy filings.

In the past, when one spouse filed for bankruptcy, the debt owed to the other spouse under the terms of a PSA may have been discharged under certain circumstances. In Hanrahan v. Ketch[1], a divorcing husband and wife signed a PSA providing for the division of their marital estate. Importantly, the PSA stated that, to account for husband’s interest in wife’s retirement plan, equity in the marital home, and other personal property, wife agreed to pay husband approximately $41,000 in installments.  However, after making only about $15,000 in payments to husband, wife filed for bankruptcy and tried to discharge the remaining approximately $26,000 owed to her ex-husband.

Husband asked the court to enforce the PSA and reinstate ex-wife’s payments as they originally agreed.  After considering various related legal issues and certain sections of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, the court ultimately held that wife could not renege on the terms of the PSA and still owed her ex-husband $26,000 under the PSA.  The court’s decision in Hanrahan, in conjunction with the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, significantly expanded protections for non-debtor spouses from the threat that marital debts owed to them will be discharged if their ex-spouses file for bankruptcy.

Unraveling complicated, intertwined marital estates in a divorce can be confusing and frustrating. With precedent like Hanrahan, divorcing couples can rest a bit more assured that an ex-spouse filing for bankruptcy will not completely negate all the progress made during the equitable distribution process.

Brian is an attorney in MacElree Harvey’s Family Law Group and Banking and Finance Litigation Group.  If you have further questions or want to schedule a consult with Brian, you can contact him directly at 610-840-0221 or [email protected].

In a promising and progressive step, the Pennsylvania Superior Court recently provided some guidance on how to define parentage for various family structures. Moving beyond decades of a discriminatory and damaging lack of precedent available to same-sex couples and parents, the decision from In the Interest of A.M., a Minor finally provides the same presumption of paternity afforded to heterosexual couples to all family structures.

In Pennsylvania, if a child is conceived during the course of a heterosexual marriage, the husband is presumed to be the father. That presumption, the presumption of paternity, is one of the strongest known to the law. Historically, the presumption of paternity was reserved only for couples of opposite-sex marriages. However in In the Interest of A.M., a Minor, the Court re-establishes that since same-sex marriages are legal in Pennsylvania, they must be given the same rights and privileges as opposite-sex marriages. Those rights and privileges include standards such as presumptive paternity. Though the Court chose to keep the gendered phrase “presumption of paternity”, they even went so far as to acknowledge that the phrase “did not appropriately reflect the reality of modern families”.

It should be noted that the presumption of paternity is not automatically given to every custody case between couples. In order to receive the presumption of paternity, spouses must demonstrate that their marriage was intact when the child was born. If there is not sufficient evidence that the marriage was intact at the time of the child’s birth, the presumption will not apply. The court will generally look to whether the spouse was at the child’s birth, who—if anyone—is listed on the child’s birth certificate, the residential arrangement of the parents, and the relationship status of the parents (like separations or pending divorce) as evidence of the marriage being intact.

This evidence of an intact marriage is generally not a difficult standard to meet though. The courts have applied the presumption of paternity even in instances where the child could have been the product of the mother’s affair and where the parents were separated and in the process of obtaining a divorce.

Prior to In the Interest of A.M., a Minor, instead of applying the presumption of paternity to custody cases with “non-traditional” couples, the courts would attempt to recreate the same effect applying in loco parentis, parentage by estoppel, and contract law. All of these options forced parents to show more to prove they were the minor’s parent, instead of just showing that the child was born during the marriage.

In extending the presumption of paternity to same-sex couples, the Pennsylvania Superior Court made important strides in bettering a system that recognizes and supports the needs and realities of families today.

The journey from the often difficult decision to end a marriage to having your divorce decree in hard can be lengthy, taxing, and time consuming. After lengthy stretches of tough negotiations, depositions and hearings, receiving your decree can feel like a relief and an opportunity for some much needed rest. While it can be challenging to immediately consider what comes next, the world spins on, and there are some critical steps you should take as soon as your decree is finalized to fully settle your affairs. Together in this series of articles, we’ll walk through how you can ensure you and your family are properly prepared for life after divorce.

Your first priority following the receipt of your decree should be to change the beneficiary designations for any of your relevant accounts. Some changes may seem like common sense, like updating a life insurance policy, but you may not think of other items right away.  Some accounts you should think about updating if not changing can include:

• Life insurance policies, including group life insurance policies through your employer
• Retirement accounts, which can include IRAs, 401(k)s and pension plans
• Bank accounts
• Investment accounts
• Disability insurance benefits, which can have death benefits attached in some cases

Unfortunately, the most important moments for which your account information should be updated tend to come as surprises. Just as you would open a life insurance policy for preemptive security for your heirs, you should plan ahead in confirming your heirs are appropriately designated on the account. Taking five minutes to address this information now could save your loved ones a lot of confusion and contention later on.

No part of getting a divorce is easy. By taking measured and intentional actions once you receive your divorce decree, though, you can be proactive in making life simpler down the road. In my next article, we’ll discuss why updating your estate planning documents should be your next priority in post-divorce planning. Life after divorce will surely present triumphs and challenges just as any chapter of your life already has. This series will hopefully help you limit some difficulties for you and your family as you take them on together.

Lance is the Chair of the Family Law Group, Co-Chair of the Litigation Department, and serves on the Firm’s Executive Committee.  He has been counseling individuals and business owners on a variety of litigation areas for over twenty-five years.

January 2021 brings a new year and a new balance of power in the federal government.  In the coming months, we can expect a flurry of activity as the government continues to address COVID-19 and reexamines policies from the previous administration.  Here are some of the biggest developments so far this year:

1. In one of his first acts in office, President Biden issued an Executive Order to the Department of Labor (DOL) to issue revised guidance for employers to boost COVID-19 safety precautions for workers. Specifically, Biden instructed the Occupational Safety and Health Administration (OSHA) to examine current mask-wearing requirements, to partner with state and local governments, and to offer additional resources to help protect workers.  This may be the first of several measures of the new administration to have OSHA and the federal government take a greater role in combating COVID-19 in the workplace.
2. Congressional Democrats have released a bill to raise the federal minimum wage to $15.00 per hour by 2025. The bill proposes a gradual increase from the current minimum wage of $7.25 per hour, with an initial boost of $2.25 per hour when the bill becomes effective.  The bill further indexes future annual increases based upon median hourly wage growth as calculated by the DOL’s Bureau of Labor Statistics.  According to a Congressional Budget Office report issued in 2019, raising the minimum wage to $15.00 per hour would increase wages for between approximately 17 and 27 million workers.  However, the increase would also result in approximately 1.3 million workers losing their jobs.  Time will tell if the bill becomes law.  The federal minimum wage has not increased since 2007.
3. The Department of Labor issued new opinion letters clarifying travel pay requirements for partial telework days. The DOL addressed the situation where an employee divides a workday into a block of work in the office and a block of work at home, with a block in between reserved for the employee’s own purposes.  According to the letters, the reserved time is not compensable under the Fair Labor Standards Act (FLSA), even if the employee uses some of that time to travel between home and the office.  As an example, DOL describes a situation where an employee leaves the workplace in the afternoon to attend a parent-teacher conference, and then resumes work at home after the meeting, having spent an hour traveling to and from the school.  The time the worker spent between leaving the office and clocking back in at home is not compensable.  While this may seem like common sense, employers are facing more and more situations like this, and so clear guidance from the DOL is critical.

Jeff Burke is an attorney at MacElree Harvey, Ltd., working in the firm’s Employment and Litigation practice groups. Jeff counsels businesses and individuals on employment practices and policies, employee hiring and separation issues, non-competition and other restrictive covenants, wage and hour disputes, and other employment-related matters. Jeff also represents businesses and individuals in employment litigation such as employment contract disputes, workforce classification audits, and discrimination claims based upon age, sex, race, religion, disability, sexual harassment, and hostile work environment.

You’re finally ready to put in that swimming pool, build that addition, or subdivide a property. However, when you consult your engineer or your municipality’s zoning officer, you are told that you need to first apply for a special exception, conditional use, or variance. You wisely plan to hire an attorney specializing in land use and zoning to handle the application, but you understandably have some questions about the overall process of obtaining zoning relief. Below are a few of the most frequently asked questions received on the subject from property owners.

Q:      What is the difference between a special exception, conditional use, and variance?

A: Special Exception:

The term “special exception” is something of a misnomer because it is not an exception to a zoning ordinance’s requirements. Instead, a use “by special exception” is a use which is permitted subject to the applicant establishing that the use will comply with certain objective criteria set out in the zoning ordinance for that particular use. A special exception application is decided by the municipality’s zoning hearing board after one or more hearings.

Conditional Use: A conditional use is essentially the same type of relief as a special exception, in that the use is permitted subject to certain criteria and conditions. The only distinguishing feature of a conditional use application is that it is decided by the municipality’s governing body, not the zoning hearing board.

Variance:

A variance is a deviation from the use or dimensional requirements of the zoning ordinance and, importantly, there is no right to a variance. For example, you would seek a use variance if you seek to operate a commercial use in a zoning district in which that use is not permitted by the zoning ordinance. A dimensional variance is required when the physical dimensions of a lot or structure do not satisfy the bulk/area requirements of the zoning ordinance.  Generally, you must show that: (1) there are unique physical circumstances or conditions on the property, which (2) create unnecessary hardship in that they unreasonable inhibit the usefulness of the property, (3) the hardship is not self-inflicted, (4) the grant of the variance will not adversely impact public health, safety, and welfare, and (5) the variance sought is the minimum variance that will afford you relief. The evidentiary burden for a dimensional variance is lighter than that of a use variance, although you are still generally required to satisfy the five-part test.

Q:        What is the process for obtaining these types of zoning relief?

A: Once it is apparent that you require zoning relief, the first step is to prepare an application to the appropriate municipal body which you submit with the application fee. It is also wise to have an attorney prepare a narrative statement in support of the application that describes the project and why the municipal body should grant the requested relief. Most municipalities require that you also submit a plan prepared by an engineer or surveyor showing the dimensions of the property and any proposed improvements. Depending on the application, it may also be advisable to have the attorney submit aerial photographs, letters of support, and other items which support or explain the project. The hearing itself must occur within 60 days from submission of the application unless you grant an extension of that time. After submitting the application, the municipality will advertise the hearing date in a local newspaper, and either you or the zoning officer (depending on the local zoning ordinance) will both post notice of the hearing on your property and notify neighboring property owners within a specified distance of your property.

Q:        Do I need an attorney?

A: While not legally required, hiring an attorney to handle your application for zoning relief is strongly recommended. Although a hearing before a municipal body may seem more informal than a proceeding in court, the stakes are actually quite high. The municipal body is looking for compliance with very specific legal requirements and will be advised by its own attorney, called a solicitor, who will attend the hearing. The municipal hearing is also your first and best chance to obtain the relief you seek. Should you appeal a denial of your application to the Court of Common Pleas, the judge is not required to take additional evidence, and must give substantial weight to the municipal body’s interpretation of the local zoning ordinance. Given the stakes of the municipal hearing, it is wise to hire an attorney who specializes in this field to prepare your application and then represent you at the hearing.

Q:        What are my chances of success?

A: It is difficult to approximate the chances of success for general categories of zoning relief, because the outcome usually depends on the degree of the relief sought and the specific property, use, and/or improvements at issue. In very general terms, a use variance is more difficult to obtain than a special exception or conditional use. A dimensional variance can be less onerous to obtain than a use variance, but here too the degree of variance sought is still very important. Because special exceptions and conditional uses are for uses which are already permitted subject to approval by the municipality and/or certain conditions, they are less difficult to obtain than a variance, but conditions imposed on the grant of relief may be the subject of intense negotiations.

Q:        Will my neighbors get to weigh in on my application?

A: Yes – and you never know who may oppose your application until the hearings are concluded. Your attorney should anticipate and be prepared to address the probable questions or concerns objecting parties might have.

If you plan on submitting an application for zoning relief, you may contact Matthew McKeon at [email protected], or by telephone at 610-840-0225. This article provides a general overview of the law. It is not intended to be, and should not be construed as, legal advice for any p

Did you make a New Year’s Resolution for 2021? Maybe you resolved to lose weight, save money, travel, or spend more time with family. This year I would encourage you to also resolve to address your estate plan. It may not be as sexy as resolving to get back to your college weight or seeing Paris at night, but I assure you it is just as important. An estate plan is an investment in your own peace of mind knowing that your own interests and wishes, as well as those of your family, are protected.

The following questions may help you to start thinking about your own estate plan and the types of questions you should be asking.

Review Your Estate Plan

Family dynamics change all the time.  People get married, divorced, have children, and all of these life changing events can impact your estate plan.  As such, it is important that you review your plan and ask some basic questions:

1. Does your Will accurately reflect who you want to inherit your estate? Maybe you have had additional children since your Will was first executed? Or maybe you now have grandchildren? It is important that your Will accommodates these changes.
2. Do the trust terms set forth in your Will still apply? If you have children there is probably a testamentary trust in your Will.  This provision controls how assets passing to your children will be managed and distributed.  Maybe you have recently had your first grandchild? Maybe you have a child with marital or creditor issues? Or maybe your child has had issues with drugs or alcohol?  All of these issues could require revisions to the trust provision in your Will to protect your child’s inheritance.
3. Do the fiduciaries you selected in your estate plan still make sense? When you drafted your plan you named an executor, a guardian, a trustee, and you most likely named agents to act as your power of attorney for finances and medical decisions.  Do you still have a relationship with the individuals you selected to these roles? Are there other people who may be better suited to fulfill these roles?  Can the individuals you selected still fulfill these roles?  It may be important to rethink these selections and update your estate planning documents accordingly.

If You Don’t Have an Estate Plan – Get One

As I mentioned above, an estate plan is an investment.  But it is not just an investment for the wealthy.  And the process does not have to be overly complicated.   At a minimum, individuals should sign a Will, Durable Power of Attorney, and a Durable Health Care Power of Attorney and Living Will.  These documents will ensure that you have someone to handle your finances and make medical decisions if you were ever to become incapacitated, and also set forth a plan for the distribution of your assets and the care for your children upon your death.

Review Beneficiary Designations and Inventory Assets

It is important to understand that assets with beneficiary designations such as 401Ks, IRAs, life insurances, etc., get distributed pursuant to those designations – and not based on the terms of your Will.  These assets typically make up a large percentage of someone’s estate, so it is incredibly important that these designations be reviewed and updated.  You certainly do not want your 401K paid to your ex-spouse, or your life insurance paid directly to your child after you went to the trouble to set-up a trust in your Will.

Additionally, and in order to assist your Executor to administer your estate after your death, you should compile and regularly update an inventory of all your assets. This inventory should include a description of the assets, how they are owned, and identify the beneficiaries.

It is also a good idea to compile a list of digital assets along with your username and password.  Digital assets can include social media accounts, bank accounts, cryptocurrency accounts, online storage accounts, photo accounts, websites, and a host of other assets.  It is important that your family not only know what types of accounts you own, but also what your intentions are with those accounts when you die.  Do not be that gentleman from Britain who threw out his computer with the passwords to his Bitcoin account, thus jeopardizing his rights to those assets – which are now worth close to $300,000,000.00.

Review Your Plan with Your Family

Review your estate plan with your family.  Provide them with copies of your documents so they understand your plan.  I often encourage clients to schedule a meeting with me to review their estate plan with their children.  It gives the children an opportunity to ask questions and learn about the process, but it also helps them understand their parents’ intentions.

Familiarize Yourself with Death Taxes

It is important that you understand death taxes.  The Federal estate and gift tax exemption increased to $11.70 million per individual in 2021.  This exemption may not apply to you now, but there is talk that the Biden administration may reduce the estate tax exemption to $3.5 million per individual, and the gift tax exemption to $1.0 million per individual.  We do not know if this is certain, or when any changes will take effect, but you should certainly start talking to your financial and tax advisors to see if these changes will apply to you and plan accordingly.

This is not an exhaustive list of questions related to an estate plan, but I am hopeful that it will at least help provide a little information to spark dialogue. Don’t be afraid to talk to your tax professional, your financial advisor, or your attorney, and ask questions.  If you have a plan – understand its limitations. If you don’t have a plan – learn what you need and get it done.  This is one New Year’s Resolution that will have a lasting effect.

Stephen M. Porter is an attorney with MacElree Harvey, Ltd.  He helps clients navigate the estate planning process, and provides advice on tax related issues, trusts, and philanthropic planning.  He also helps small businesses with choice of entity questions, and succession planning.  Steve can be reached at (610) 840-0256 or [email protected].