Other Considerations for Property Division in Pennsylvania Divorces
Other Considerations for Property Division include: (1) Professional Licenses or Degrees; (2) pension benefits; (3) Personal injury proceeds; (4) marital debts; (5) goodwill; (6) future interest; (7) Tax Consequences; and (8) Alimony or spousal support.
Professional Licenses or Degrees:
• The license or degree itself is not marital property; however, the court may use its equity power to award compensation in the form of reimbursement. This is limited to actual financial contributions, (e.g., if one spouse made financial contribution toward the other spouse earning a professional degree, they are not going to get a piece of the value of that professional degree, but if in some way they can demonstrate those expenses, then they may get reimbursement for those expenses).
Pension Benefits:
• If one of the spouse’s pension accumulated during the marriage, then it is marital property and it is subject to division (this includes profit sharing plan, 401k, etc.,) It does not matter whether the non employee spouse made a contribution to its acquisition.
Personal injury proceeds: • These personal injury proceeds are considered marital property if the cause of action occurs between the date of the marriage and the final separation.
Marital Debts:
• Debts are classified as marital or separate.
• If the parties were married when the debt was incurred, then it will generally be classified as marital debt.
• When deciding the status of marital debts, the court will consider the following:
o (1) What was the purpose of the debt;
o (2) Who incurred the debt;
o (3) Who benefitted from the debt, and
o (4) Who is best able to repay the debt?
Good Will:
• The reputation and clientele of a professional practice or business is considered marital property to the extent it can be given a dollar value.
Future Interest:
• A possible future interest in property is not distributable.
In comparison to alimony, property division is generally oriented toward the past, whereas, alimony is oriented toward the future.
Tax Consequences:
• Equitable distribution payments or property transfers are not taxable at the time of transfer, however, the property is taxable when it is sold.
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