Reducing No-Fault Divorce Separation to One Year: The Significant Impact on Divorcing Couples with Business Interests

January 26, 2017

By Mary Cushing Doherty

Before Pennsylvania’s Act 102 became law in late 2016, parties to a divorce in most Pennsylvania counties were unable to meet with a divorce Master until they had established grounds.  Without both parties filing Consents to the divorce, the delay put the business owner’s livelihood at risk.  To establish grounds in a unilateral no-fault divorce, a Complaint must be filed and an Affidavit must be filed and served stating the parties have been living separate and apart for a period of at least two years.  If an opposing spouse does not deny the allegation set forth in the affidavit, grounds are met, however, if that spouse denies the stated date of separation, the parties will litigate for several months over the date of separation before they address distribution of assets upon divorce.  Once grounds are established, the parties face delay in updating discovery as the value of the business at two dates: date of separation and current date must be presented to the Court.

Businesses suffer due to delay caused by litigation.  The two year waiting period previously required for no-fault divorce often unduly burdened the business owner.  Furthermore, disputes related to date of separation, discovery, valuation at two dates, as well as delays caused by busy Masters and judges led to a trial in three, four or five years after separation.  A spouse who is consumed by divorce litigation will likely give less attention to the success of her or his business.  A manipulative spouse who is the business owner, will have more time to run the business into the ground, or hide assets and income connected to the business so the dependent spouse cannot easily value the business assets available for equitable distribution.

Pennsylvania law requires valuing business interests as the date of separation and the date of litigation for equitable distribution to determine the most fair valuation date for the purposes of the divorce.  Masters and judges legitimately wrestle with the most fair date of valuation due to factors unique to the parties’ action as well as market conditions which have affected the business value over time.

Now the unilateral no-fault grounds are established after one year of separation.  With a shorter waiting period, it minimizes the multitude of variables, making it easier for the courts to value a business.  The shorter waiting term decreases the chance that the value of the business will fluctuate significantly.  When the disposition of the business is resolved, the consequences of divorce can be resolved more quickly to stabilize business health and growth..  Most importantly, the owner will get back to work leading the greater productivity.  A successful business post divorce is good for the family: the business owner will be better able to pay ongoing support for the parties dependent children, and in some cases, alimony for the dependent spouse.  The financial future of the children is as important, if not more so, than the future of the business.

If you have any questions, contact Mary Cushing Doherty at 610-275-07000 or via email at mdoherty@highswartz.com.

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.

Melissa Boyd Moderates Panel at PBA Family Law Section Winter Meeting

CLE program discussed ‘Secret of Support Remedies’ at meeting of leading family law attorneys in Philadelphia areaNORRISTOWN, Pa. (January 24, 2017) – Melissa Boyd, a family law attorney at High Swartz LLP, recently moderated a panel discussion at the Pennsylvania Bar Association’s Family Law Section Winter Meeting in Philadelphia.Boyd led a discussion on the “Secret of Support Remedies” at the meeting, which was held Jan. 13 to 15 in Philadelphia. The session offered 1.5 substantive CLE credits, and focused on what goes on behind the walls of Domestic Relations offices in Pennsylvania. Topics included federal and state regulations, the ways in which arrearages are handled, and whether bank accounts can be seized or licenses suspended as part of support enforcement.A key member of the High Swartz family law practice team, Boyd concentrates her practice on family law and is an advocate in various areas including, but not limited to, divorce, pre-nuptial and post-divorce agreements, child custody and support, equitable distribution, alimony, adoption, protection from abuse, and juvenile law. She has dedicated much of her professional career to preserving the rights of children and their families.Boyd is a fellow of the American Academy of Matrimonial Lawyers and a member of the Family Law Sections of the American Bar Association and the Pennsylvania Bar Association. She frequently presents on family law topics, and she is past chair of the Family Law Section of the Montgomery Bar Association.A graduate of Washington College and the University of Baltimore School of Law, Boyd has received the highest possible rating from Martindale-Hubbell and has been named among the 10 Leaders of Matrimonial Law in Philadelphia.High Swartz LLP is a full-service law firm serving clients in the Delaware Valley and throughout Pennsylvania from offices in Norristown and Doylestown. Established in 1914, High Swartz serves the needs of businesses, municipalities, government entities, nonprofits and individuals. With offices in Bucks County and Montgomery County, the full-service law firm provides comprehensive counsel and legal support to individuals and business entities of all sizes across a broad spectrum of industries throughout Pennsylvania and New Jersey. For more information, go to www.highswartz.com.

“Subgroup” Disparate Impact is a Basis for Age Discrimination Claim

January 17, 2017By James B. ShrimpFor any business contemplating a reduction in force (“RIF”) it is no doubt a difficult process given the knowledge that you are going to layoff a significant number of employees.  From a business perspective, for businesses in PA, NJ and DE, the Third Circuit Court of Appeals has added an additional layer of difficulty.  Specifically, in examining whether your RIF guidelines/policies violate the Age Discrimination in Employment Act (“ADEA”), the Third Circuit in Karlo, et al. v. Pittsburgh Glass Works, LLC, has concluded that a disparate impact on a subgroup of employees is a basis for a claim under the ADEA.What is Subgroup Disparate Impact?This is a fair question, because with respect to most other protected classes there are no subgroups. For instance, Title VII protects group identities such as race, which are no subject to subgroups.  The ADEA is different, because the protected class of individuals is defined as an age – forty (40) and those older.  Subgroup disparate impact is possible because although the protected class begins at 40, the ADEA prevents discrimination as to “age” not “those over 40”.  As stated by the Third Circuit, “age is a continuous variable, whereas race and sex are treated categorically in the mine-run of Title VII cases.”Therefore, it is possible that a subgroup of the age protected class – those aged 50 to 55 – are disparately impacted by a policy, which favored individuals aged 40 to 45 who are also in the protected class.  The question for the Third Circuit was whether such an impact is unlawful.ADEA Disparate ImpactTo win a disparate impact claim under the ADEA a plaintiff must (1) identify a specific, facially neutral policy, and (2) proffer statistical evidence that the policy caused a significant age-based disparity.  Once a plaintiff proves this, the employer can defend by arguing that the challenged practice was based on “reasonable factors other than age.Notably, the ADEA’s disparate impact prohibition makes it unlawful for an employer to adversely affect an employee’s status because of such individual’s age.  Importantly, the Third Circuit emphasized, the ADEA does not state that the impact must be adverse to those over 40 years old and favorable to those under 40 years of age.Although the Third Circuit’s decision is contrary to three other circuit courts that have ruled on this issue, the Third Circuit’s legal analysis is more persuasive.  Thus, subgroup disparate impact in ADEA cases is the law in PA, NJ and DE for now and will in my opinion be the law of the land should the Supreme Court consider the matter.What Does It Mean for EmployersWhen planning a RIF, an employer must now review the impact its RIF guidelines/policies will have on age subgroups.  By example, an employer will run afoul of the Third Circuit’s decision if it simply concludes that the RIF is impact neutral because 4 employees over 50 are being terminated while 4 employees 40 to 45 are being retained.  Instead, unless the employer feels confident in its reasonable factors other than age, the RIF should be planned to evenly impact age groups.  For instance, if 50 employees are being terminated, approximately 10 employees each should be terminated in the following age ranges – 40 to 45, 46 to 50, 51 to 55, 56 to 60, and 61 to 65.Also, there is a chance that enterprising plaintiff’s lawyers will expand subgroup disparate impact to other subgroup-able protected classes, such as religion or disability.  Therefore, employers should contact an attorney when contemplating/planning a reduction in force.If you have any questions, contact James B. Shrimp at 610-275-07000 or via email at jshrimp@highswartz.com. 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. 

When is a Will Really a Will?

January 10, 2017By Donald Petrille, Jr.The rules for executing a Will in Pennsylvania are simple and clear.  Unfortunately, life, and its circumstances, often are not, and these circumstances can unwittingly lead to a Will contest.Pennsylvania law is clear.  If someone signs a document which is intended to dispose of property or other legal rights upon the author’s death, and it is signed at the end, the document is a Will.  There is no legal requirement for the Will to be witnessed at the time it is signed for the document to be a valid Will.  If two witnesses sign the Will at the time of execution, they are known as “subscribing witnesses.”  If the author of the document, the “testator”, then signs an acknowledgement before a notary, and the subscribing witnesses sign an affidavit before a notary, the Will is “self-proving.”  A self-proving Will is easily admitted to probate.If a Will is not self-proving, the Register of Wills will require the testimony of witnesses, who must authenticate the Will, before it is admitted to probate.  Most often, this testimony comes in the form of an affidavit.  If a subscribing witness offers testimony, an “oath of subscribing witness” must be filed with the Register of Wills.  If a non-subscribing witness offers testimony, the non-subscribing witness must verify that the witness (a) is familiar with the signature of the testator/decedent, and (b) recognizes the signature of the testator/decedent.  A subscribing witness must only state that the subscribing witness signature on the Will is that of the witness.Pennsylvania law recognizes that some people may not be able to sign their own name.  Therefore, it provides another person may sign the testator’s Will on the testator’s behalf, or that the testator may merely make a mark indicating the testator’s consent to the Will.  As you may imagine, the standard of proof in these cases, must be higher than that of a full and complete signature by the testator.  In these cases, Pennsylvania law requires there be two subscribing witnesses to verify the signature by mark, or by another.Recently, these provisions of Pennsylvania law were tested in the case of In Re: Staccio, 143 A.3d 983 (Pa. Super. 2016).  In this case, the decedent was very weak and sick, and the decedent’s girlfriend helped him make his signature.  This act was done in the presence of the testator’s attorney.  The testator’s attorney offered testimony that the testator was fully aware of his actions and the consequences of signing the Will.  The attorney, however, was the only subscribing witness to the Will.  In this case, the Superior Court held that a person who signs a Will, even with assistance of another person, does not need to meet the higher threshold imposed upon those who signed via mark or who are having their Will signed by another.  It is important to note that the court found that the testator was aware, and asked for help in signing the Will.  The testator did not ask his girlfriend to sign the Will on his behalf.Although the Court upheld the execution of the Will, the Court left open the questions of whether or not the testator was under the undue influence of his girlfriend, and whether his illness caused him to lose his testamentary capacity.  The bottom line of the Court’s decision was that a sick adult with testamentary capacity, can sign a Will while receiving assistance from another person while signing a Will.A properly executed Will makes the probate process far simpler . . . and less expensive.  It is important to review your estate planning documents regularly, to ensure that they still meet your needs…and were properly signed.If you have any questions, contact Donald Petrille, Jr. at 215-345-8888 or via email at dpetrille@highswartz.com. 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