High Swartz partner Mary Cushing Doherty is featured in a Wall Street Journal article on the difficult subject of what happens when couples in business together decide to end their marriage. The article was published January 24, 2016.
The article How to Keep a Business Alive After a Divorce compares the worst case scenario (business dissolved) with alternate resolutions:
…it’s impossible to take bad feelings entirely out of the picture. But there are strategies spouses can use to ensure their business has a fighting chance to survive a split, as well as minimize their own emotional turmoil.
When it is recommended that one spouse buy out the other’s share of the business. Ms. Doherty recommends that the spouse who gets bought out often signs a noncompete agreement and go into a new line of work.
‘Real entrepreneurs always have another idea’, says Mary Cushing Doherty, a family-law attorney at High Swartz LLP in Norristown, Pa . Often they’ll say, ‘This is my chance to go my own path.’
Mary Cushing Doherty concentrates her practice on all aspects of marital dissolution, including divorce, child custody, spousal support and alimony, pre-marital and marital agreements, complex property division, and service as a private arbitrator. She is a member of the Montgomery County, Philadelphia, Pennsylvania and American Bar Associations’ Family Law Sections, and served as chair of the PBA Family Law Section in 1999 – 2000.
Doherty is also active at the state and national level of the American Academy of Matrimonial Lawyers, serving as Pennsylvania’s governor. She is a frequent lecturer and author in the field of family law, and has served as course planner for programs sponsored by the PBI, PBA, and Montgomery Bar Association. She earned her J.D. from Villanova University School of Law and her B.A. from the University of Delaware.
January 28, 2016High Swartz congratulates Melissa Boyd on being appointed to the Montgomery County Commission on Women and Families. Melissa Boyd was appointed on Thursday, January 21, 2016 at the Commissioner’s Board Meeting.The mission of the Montgomery County Commission on Women and Families is, “to foster leadership; provide awareness of existing services; promote development of resources and advocate equal access to such resources in order to enhance the lives of women and families. ”To learn more about the Commission on Women and Families, click here. Melissa M. Boyd is a partner with High Swartz LLP. She concentrates her practice on family law including, but not limited to, divorce, pre-nuptial and post-divorce agreements, child custody and support, equitable distribution, alimony, adoptions, protection from abuse and juvenile law. She has dedicated much of her professional career to preserving the rights of children and their families.Ms. Boyd is a fellow of the American Academy of Matrimonial Lawyers and member of the family law sections of the American Bar Association, Pennsylvania Bar Association and the Montgomery Bar Association. She is presently Chair of the Family Law Section of the Montgomery Bar Association. Ms. Boyd has been certified as a Family Law Arbitrator by the American Academy of Matrimonial Lawyers.
January 28, 2016By: Thomas D. Rees, Esq.Dialing mistakes are no longer just material for late night comedy. Several recent employment cases show the consequences of “pocket dialing” on cell phones. The mistaken calls disclosed plans to fire executives, disrespect for management, conflicts of interest, and affairs with co-workers. The misdialing employees and supervisors emerged from the incidents with lost jobs and lost respect- and then lost lawsuits over use of information from the mistaken calls. Continue reading “Just Hang Up! The Perils of Pocket Dialing and Accidental Calls.”
Can a stepparent be held responsible for child support payments? In Pennsylvania, the answer is now “yes,” thanks to a Pennsylvania Supreme Court decision entered in the final days of 2015. Specifically, in the case ofA.S. v. I.S., the Court ruled that a stepparent who takes affirmative legal steps to assume the same parental rights as a biological parent can be held responsible for child support payments. Continue reading “A Stepparent’s Duty to Pay Child Support”
January 20, 2016 As society has become more accepting of all types of couples and families it is becoming more common for couples to choose to live together in property they’ve purchased jointly before marriage, or even in lieu of marriage. That being said, the law has not quite caught up, and unmarried couples have to take extra precautions and understand certain complexities to make sure their intentions for themselves, their partner, and their assets are understood and documented. Continue reading “Estate Planning Tips for Unmarried Couples”
January 20, 2016Norristown, Pa. – (January 13, 2015) – The law firm of High Swartz LLP announced that Elizabeth Early has joined the firm as an associate.Ms. Early concentrates her practice on family law and specializes in many areas including divorce, custody, support, equitable distribution, pre and post-nuptial agreements and abuse matters.Ms. Early earned Bar Admission in both Pennsylvania and New Jersey. She is a member of the Pennsylvania Bar Association, the Montgomery County Bar Association and the Doris Jonas Freed America Inn of Court. She is a graduate of Temple University’s Beasley School of Law.“Elizabeth joins High Swartz with a reputation of representing clients efficiently and empathetically,” said Joel Rosen, Managing Partner of High Swartz. “She adds value and dimension to the firm’s growing family law team.”Prior to joining High Swartz, Ms. Early practiced family law with a boutique Philadelphia family law firm, and then with Sattin & Ronca, LLC. She also previously served as a law clerk for the honorable William C. Todd III, Presiding Judge Chancery Division in the New Jersey Superior Court. She has served as a court mediator in both New Jersey and Pennsylvania.
by Stephanie Henrick | January 14, 2016 Bennie’s sister, Daisy, died with a Will, leaving everything to Bennie and naming him as Executor. She owned a house in her name where she and Bennie lived together, all her bank accounts were jointly owned with Bennie, and Bennie is named as designated beneficiary on her IRA. Bennie wants to know if he can avoid probate…everything goes to him anyway and he has no plans to move anytime soon. There is a widespread misconception that avoiding probate means avoiding taxes. This is not the case, as there is a Pennsylvania inheritance tax.
What is “probate”?
Probate is the process of filing the Will with the Register of Wills and/or having a personal representative appointed to administer the Estate. When a person dies with assets titled solely in their name, you have to go through the probate process in order to transfer the assets to the beneficiaries. Think of probate as the process of “cleansing title” to pass property to the beneficiaries. Bennie needs to file Daisy’s Will and be appointed as Executor, listing the fair market value of her home as a probate asset. Otherwise, he can’t transfer the property to himself.
What if there isn’t a Will?
If the Decedent owned property solely in their name, you will still need to probate to transfer the assets. Many financial institutions won’t speak to you about an account unless you show them a Short Certificate (literally a “short” piece of paper evidencing who has been appointed as Executor/Administrator for the Estate). And you can’t get a Short Certificate unless you probate with the Register of Wills.
Can I save any money if I don’t probate?
Maybe. However, you are only avoiding the “probate fee” which is small. Each county is different but usually the fee is based on the value of the gross estate assets. If you are required to file an Inheritance Tax Return, you will still have to pay a fee to the Register of Wills in order to obtain a file number.
If I don’t have to probate, do I still pay the Pennsylvania inheritance tax?
Pennsylvania charges an inheritance tax charged based on the privilege of receiving property from a Decedent. The amount of the tax is based on the net value of the assets multiplied by a set percentage which is determined based on the relationship of the beneficiary to the Decedent (ex// spouse- 0%, children – 4.5%, siblings- 12%, friends- 15%). Therefore, even if the estate is small, the beneficiaries will usually have to pay the inheritance tax in Pennsylvania. Bennie will owe inheritance tax on the joint accounts, possibly the IRA, and the house.
What are the consequences if I don’t administer the estate?
Bennie has 9 months from the date of Daisy’s death to file an Inheritance Tax Return and pay the tax. In Pennsylvania, if he pre-pays the inheritance taxes within 3 months of death, he can receive a 5% discount on the taxes. Bennie has an obligation to report all taxable property which may be subject to inheritance tax. In addition, if he has taken possession of the assets (i.e. house, retirement accounts, joint accounts), he is personally liable for the tax.If Bennie fails to do so within 9 months from the date of death:
interest and penalties will accrue at variable rates on the delinquent tax
an automatic lien will attach to Daisy’s house which will remain in effect until he complies with the law
the Department of Revenue can pursue collection against him indefinitely
the Court can enforce payment of tax and/or compliance and execute against the real estate agent or against any property belonging to him as a transferee
he can be subpoenaed to appear in Court to answer why he hasn’t complied with the law
he can be required by the Court to give bond for payment of the delinquent tax
he may be personally liable for additional penalties/fines and possibly subject to criminal charges
Failing to be appointed as personal representative of the Estate allows others (creditors, interested parties, others holding “prior versions” of the Will, etc.) to open the estate and they can be appointed to administer the estate. Thus, Bennie could lose control of the assets if they are liquidated to pay the tax and creditors. By not probating the estate and advertising the death, Bennie is leaving the door open for creditors. They can open the estate themselves and execute against the assets to satisfy their claims. Bennie’s delay extends the time period for creditors to come forward and assert their claims against the estate. His inheritance could be completely dissipated because valid creditor claims have priority over his interests with respect to the estate assets.Financial institutions have a duty to notify the Department of Revenue of a death and provide them with information on the beneficiary. Failure to respond to these notices within the timeframe allowed will subject Bennie to further ramifications.There is also the issue of homeowners’ insurance which needs to be changed to reflect that Daisy has passed away. Otherwise, Bennie may not be covered under these policies. Probating the estate will help Bennie stay in the home, obtain proper homeowners’ insurance coverage, pay utilities and real estate taxes, sell the property, obtain a mortgage/loan, handle any existing mortgage/loan, and address possible foreclosure actions/sheriff sales.Bennie also needs to file and pay Daisy’s personal income tax returns, estate income tax returns, and his own income tax returns, all of which are affected due to her passing. Failure to do so could subject Bennie personally, and the assets of the estate, to additional tax liens, penalties, interest and fines.Even if it appears that probate is unnecessary, it is in Bennie’s best interest to do so, to protect himself from potential claims, lawsuits and taxes. Avoiding probate does not mean avoiding taxes. Estate taxes will have to be paid. If not by the estate, then by Bennie personally, whether or not he has the funds to do so.The above information is only a partial list of possible consequences/repercussions if Bennie delays or fails to administer the estate. He should probate, advertise, file an Inheritance Tax Return and pay the taxes to protect himself and his sister’s assets. If his sister owned property in another state or states, ancillary probate would need to be considered as well.For more information on the Pennsylvania inheritance tax, please contact Stephanie Henrick at (610) 275-0700 or by email at firstname.lastname@example.org.The information above is general: we recommend that you consult an attorney regarding your specific circumstances. The content of this information is not meant to be considered as legal advice or a substitute for legal representation.
January 14, 2016High Swartzs attorneys Stephanie Henrick and Sireen Tucker instructed military personnel on Tax Law at Fort Dix McGuire base in New Jersey through the VITA (volunteer income tax assistance) program. The VITA program supports low income people, individuals with disabilities, non-English speaking, and elderly taxpayers. As VITA instructors, Stephanie and Sireen trained military personnel to become return preparers for other military personnel and their families as part of the Military VITA program. The topics they covered were Affordable Care Act, exemptions, and taxable income. Both Stephanie and Sireen completed the certification courses for military and advanced taxes and both received VITA certifications. Continue reading “High Swartz Attorneys Stephanie Henrick and Sireen Tucker Presented at Fort Dix McGuire”
January 8, 2016By: Mary Cushing DohertyThis post originally appeared in the Local Living Magazine on December 2015 issue.Most parents of school age children react dramatically differently to snow days than their little ones. The overwhelming announcement that school is closed sneaks up by surprise: significant snow was not expected; rain should not have flooded the school basement; accidental power outage; or any unexpected triggers to close school. Continue reading “Oh No, A Surprise Snow Day!!”
40 East Airy Street Norristown, PA 19401 Phone: (610) 275-0700 Fax: (610) 275-5290
116 East Court Street Doylestown, PA 18901 Phone: (215) 345-8888 Fax: (215) 345-5358
High Swartz Law firm is committed to providing efficient and responsive full-service legal representation to businesses, public and privately-held entities, educational institutions, nonprofit organizations, municipalities and individuals throughout Pennsylvania, New Jersey and the mid-Atlantic region. This website is for informational purposes only and should not be used as a substitute for personal legal advice.