Lancaster Law Blog : Lancaster PA Lawyer & Attorney : Russell Krafft & Gruber Law Firm : Pennsylvania : Lancaster's Legal Link

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Russell, Krafft and Gruber, LLP is excited to be featured in the Women in Business section of the November/December 2011 issue of Susquehanna Style. The feature highlights just some of the great qualities and community work of Christina Hausner, Holly Filius and Julie Miller. If you are interested in viewing the feature, you can purchase a copy at newsstands or view the publication online (page 91-92). Susquehanna Style is a bi-monthly regional lifestyle magazine for the residents of south central Pennsylvania.

In conjunction with the Women in Business feature, Chris, Holly and Julie will be attending the Celebrate Women event held on November 30, 2011, at the Accomac Inn. If you are interested in attending, you can purchase tickets and find out more information on Susquehanna Style's website. The $10 admission donation will benefit the Power Packs Project which is a school hunger initiative.

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Making a will is something that occasionally crosses your mind, it's one of those things you think maybe you need but don't have the time or desire to make it a top priority. In addition, there are many things that can deter you from making a will such as lack of money or property, the unlikelihood that something catastrophic will happen to you or just simply procrastination. However, if you are a parent, one of the most important reasons you should have a will is to appoint a person to care for your child upon your death and the death of the other parent. The care of your child upon an unfortunate event such as death can happen to anyone regardless of the size of your estate. As a parent myself, I believe that one of the most important parts of a will is the section that appoints a guardian for anyone with minor children.

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On April 27, 2011, Holly Filius received a Letter of Commendation from the Lancaster County Commissioners in recognition of the Central Penn Business Journal's Women of Influence Lifetime Achievement Award. She will formally receive her award on May 16 at the Women of Influence Luncheon. Holly was presented with the Letter of Commendation during the Lancaster County Commissioners' Meeting. The letter acknowledged Holly's commitment to her clients and community,

"With respect and appreciation, the Lancaster County Board of Commissioners would like to congratulate you on being named the 2011 Central Penn Business Journal's Women of Influence Lifetime Achievement Award recipient. We are honored to recognize your impressive career, leadership skills and accomplishments in the business community. You have committed your life to making Lancaster County and all of Central Pennsylvania a great place to work and live." 

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Holly S. Filius, Managing Partner, of Russell, Krafft & Gruber, LLP in Lancaster, PA has recently been named the recipient of the Lifetime Achievement Award in the Central Penn Business Journal’s Women of Influence Awards program.

Filius received her B.A. in Political Science from Villanova University and her J.D. from Widener University School of Law. She concentrates her law practice in Family Law, Adoption and Estate Planning. Filius joined the firm as an associate in 1998 and attributes her early success to hard work, a commitment to client service and integrity, which has earned her a solid reputation among her clients and the legal community. This success led to a partnership offer after only five years in private practice. Six years later in 2009, she was elected Managing Partner of the firm. Filius' commitment to excellence and her leadership skills made her an ideal candidate for the position.

Filius has earned a reputation as one of the best Family Law attorneys in Lancaster. Over the years she has acted as a mentor to all of the young lawyers at Russell, Krafft & Gruber, LLP. In addition to mentoring lawyers in her own firm Filius often makes time for law clerks and even lawyers in other firms who recognize her expertise and appreciate her professional and approachable demeanor.

Currently, Filius serves as President of the Board of Directors of the S. June Smith Center Foundation. She is active in numerous community and professional groups, has served on the Board of Directors of The Pennsylvania State Foster Parent Association and as a member of the Women in Business Committee of the Lancaster County Chamber of Commerce and Industry.

Filius' career achievements are ones that stand out among both the men and women in her field. Under her leadership the firm has been able to successfully balance growth and caution in the midst of a struggling economy and position the firm for the future. As a long time resident of Lancaster County, she feels a commitment to her community and strives to make Lancaster county a better place to live and work.

The Women of Influence awards were created in 2010 to recognize midstate women leaders who are influential in their companies, industries and communities. In total, 28 local women business leaders will receive awards recognizing their outstanding leadership, integrity and accomplishments in the midstate’s business community at the Central Penn Business Journal’sWomen of Influence event on Monday, May 16, 2011 at the Hilton Harrisburg. The award recipients will also be profiled in a special supplement to the May 20, 2011, issue of the Central Penn Business Journal. This list will also appear in the Business Journal’s 2012 Book of Lists publication.

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A few weeks ago I shared the good news that the IRS extended the tax deadline to April 18 this year.  If you’re like me, you probably thought, “That’s nice, but two days doesn’t make that much difference so I’ll just have my taxes done by April 15.”  Now that the deadline is fast approaching I’ve been asked by a number of friends and clients if the new deadline also applies to state and local taxes.  The PA Department of Revenue announced some time ago it had also extended the deadline for PA personal income tax returns.  However,  if you check out the homepage on the Lancaster County Tax Collection Bureau’s website you will see they have extended hours on Friday, April 15, but return to normal working hours on Monday, April 18.  They did, however, confirm that taxpayers have until Monday to file individual returns. In addition, taxpayers can now file their Lancaster County returns online.

Despite some information online to the contrary, the instructions for IRS Form 1040-ES lists April 18 as the due date for federal estimated payments as well. Filers who have applied for an extension will also receive a reprieve from the normal October 15 deadline which falls on a Saturday in 2011. Final returns are due on Monday, October 17.

Here are some parting thoughts as you take on the dreaded task of preparing your 2010 tax return.  It was Benjamin Franklin who said, “The only things certain in life are death and taxes.”  I recently read an anonymous quote in response to Franklin’s famous words, “Death and taxes may be certain, but we don't have to die every year."

**When this article was initially posted I did not include information regarding PA State Estimated Tax payments.  According to the PA Department of Revenue website Pennsylvania 2011 Personal Income Tax Estimated Payments are due on April 15.  Please note this deadline has not been extended until April 18.

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Do-it-yourself projects, like remodeling your bathroom or building a deck, can save money and provide a sense of accomplishment by doing something on your own that you would ordinarily hire another person to do. With any do-it-yourself project there are risks involved, such as increased cost if you have to hire a professional in the end or if your inexperience causes other damage. 

The internet has allowed individuals to perform some legal functions on their own. Many government websites, for example, offer forms with detailed instructions that can be very helpful for people seeking to help themselves with certain issues. There are also websites that offer forms and additional services for a fee. These websites are required to stop short of offering legal advice because they are not law firms, which is made very clear on LegalZoom's website: "LegalZoom is not a law firm, and the employees of LegalZoom are not acting as your attorney….if you need legal advice for your specific problem, or if your specific problem is too complex to be addressed by our tools, you should consult a licensed attorney in your area." Because these sites are not law firms, they are also not subject to the rules that govern lawyers. This is why they are able to do things lawyers can't do, such as use celebrity endorsements. 

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Some significant changes and additions to the custody statute in Pennsylvania went into effect recently. The majority of the changes or additions to the custody statute are an attempt to take the factors, standards and practices which have been carved out over the years through Court cases and appellate decisions and consolidate them within the statute. While these may not make a significant substantive change to the custody law, they still have the potential to affect many custody cases filed after the law goes into effect this week. 

One of the most significant additions to the statute is the inclusion of sixteen specific factors which, if applicable, the Court must consider. The overall goal is still to determine what is in the best interest of the child but these specific factors that are now set out in the statute provide some guidance and uniformity for judges, attorneys and parents to specifically consider in evaluating cases and concerns in custody matters. A few examples of these factors are:

• Which party will encourage and permit continuing contact with the other party
• Parental duties performed by the parties on behalf of the child
• Sibling relationships
• The well-reasoned preference of the child based on the child's age and maturity
• Proximity of residences of the parties
• Attempt of one party to turn the child against the other party

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The news each day seems to be filled with headlines about the wars in Iraq and Afghanistan. With the withdrawal of U.S. combat forces in Iraq and the return of many of them to the United States, a recent Amendment to the Pennsylvania Divorce Code is likely to be put into use more frequently. 

At the end of 2008, the Divorce Code was amended to prevent the Court from changing a custody order where a parent is a servicemember and has been deployed, except on a temporary basis. The Court may make a temporary change to the order if it would serve the best interests of the child to do so while the servicemember is deployed. This part of the new law is not that different from all other custody procedures, which look to the best interests of the child as a guide. 

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Meeting with a lawyer for the first time about a divorce can be overwhelming for a number of reasons. Obviously, clients most likely are experiencing emotional trauma over the loss of their relationship and uncertainty about their future. Navigating the legal intricacies of the divorce process adds yet another element of uncertainty to the situation. For a client who is unfamiliar with the legal process, learning about options and discussing ways in which to proceed during the most stressful  time of their life can be confusing. However, it is a critical meeting — one at which the lawyer can assess the client's situation and priorities, and one at which the client can become comfortable with the lawyer.

Clients often have no idea what to expect from the initial consultation. At the very least, I believe that the client should leave my office that day knowing that he or she has choices, that there is no "one size fits all" method for divorcing, and that I have some understanding of the issues their case will present. In developing an understanding of the issues, it is necessary to have information about the nature of the parties’ marital estate, including their assets and liabilities. It is particularly helpful if clients bring along the following documents when they meet with me for the first time to discuss their divorce:

• Copies of their most recent Federal Income Tax Return, including W-2s, 1099s and schedules.
• Copies of recent paystubs.
• A copy of all recent mortgage and/or home equity loan statements, for all properties owned; if a home is in foreclosure, a copy of the most recent Act 91 Notice.
• Recent statements for all investment and retirement accounts, including 401(k)s, IRAs and pensions.
• Recent bank account statements.
• Annual income statements from the Social Security Administration.
• Information regarding the value of any business interests.
• Documentation of loan balances, credit card debts or outstanding medical bills 

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The Pennsylvania Supreme Court has recently issued the updates to the Pennsylvania Support Rules and Guidelines, which go into effect on May 12, 2010. The Pennsylvania Support Rules and Guidelines are required to be updated every four years and many times involve only an update to the child support schedule with little or no substantive changes to the rules. This year, however, there are a number of significant changes and in some instances, may have a major effect on the calculation of child or spousal support. Below are some of the more significant changes to the 2010 Amendments to the Pennsylvania Support Guidelines:

1.      The first and potentially most significant change is in the application of the support guidelines to circumstances where the monthly household income is in excess of $20,000. Previously, the child support schedule ended at a combined adjusted net income for the parties at $20,000. The new schedule includes a combined adjusted net income of up to $30,000. Therefore, the basic child support schedule can be used where the parties' income is up to or equal to $30,000 per month. This should provide some much needed uniformity in calculating support for parties who have a substantial monthly income up to $30,000.

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One of the most hotly-contested issues facing Judges in custody cases is whether to allow a custodial parent to relocate to another state with the children. This has become quite common, particularly as people have made and developed relationships through the internet. Relocation cases are difficult for all parties involved: the non-custodial parent is shocked and horrified at the prospect of losing regular contact with his or her children and the prospect of not being able to move to a perceived better opportunity is equally difficult for the custodial parent. Often, these cases are not able to be resolved through the custody conciliation process and they end up at a hearing before a Judge.

My practice is to remind clients involved in all custody litigation, including relocation cases, that the Judge deciding the case is a stranger making decisions about what is in the best interest of your family. He or she has no prior knowledge of your family, you and your ex-partner's history, your children's behaviors, likes and dislikes. Depending on your case, it can be helpful or can add to your burden.

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Back in July I wrote about the first-time homebuyer tax credit that applies to home sales occurring before December 1, 2009. However, there is some great news for prospective homeowners unable to squeeze in a purchase in that timeframe: Reuters is reporting that the credit may be extended for another six months. With bipartisan support in Congress and recent hints that President Obama will back such an extension, the amendment is likely to pass.

Also, we have received queries from readers regarding the effects of divorce on the credit. A common occurrence in divorces is that an ex-spouse's name continues to remain on a deed while he or she no longer lives in the residence. As long as the ex-spouse has not lived in the house at all over the past three years, and as long as the divorce was finalized three or more years ago, the ex-spouse will qualify as a first-time homebuyer because the house is not his or her primary residence. Of course, this assumes that the ex-spouse does not reside in other real property that he or she owns.

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The conclusion to my three part series on domestic issues and business owners will focus on support. Previously in parts one and two I discussed marital property, separation, divorce and equitable distribution. 

Support is divided into three general categories: child support, spousal support/alimony pendente lite (APL) and alimony.

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In Part One of Domestic Issues for Business Owners, I discussed the definition and value of marital property. In this post I will be highlighting how separation, divorce and equitable distribution can affect your business.

Separation

Separation is an important aspect in valuation of marital property, including business interests, because the date of separation identifies the ending date for assets to be included in the marital estate.

Divorce

There are two types of divorce, fault and no-fault. Even if you have established grounds for divorce under the fault or no-fault provisions of the Divorce Code, a divorce will not be granted until all economic issues are resolved.

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Starting and running a small business is tough enough. The domestic issue in the forefront of your mind is how the stress of running a business will affect the relationship of your marriage. However, you might want to consider how your marriage affects the assets of your business and understand how a divorce could affect the future of your business.

In this three part post, I highlight some of the issues that arise in a divorce which includes a business owned by one or both parties. Because of the complex nature of this type of divorce, it is difficult to cover all of the issues involved. However, these posts will help to provide some understanding of the basic considerations.

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No one is immune from the realties of today’s economy. Since the economic downturn I have had a number of inquiries from clients regarding their Child Support Order if they are laid off or are receiving support payments from a payor who has been laid off.

First, if you pay support and you experience a decrease in your income due to a layoff, a decrease in the number of hours you are able to work, or a reduction in your salary and/or bonuses, your monthly child support obligation could be reduced. Under the Pennsylvania Support Guidelines, a payor's support obligation is based on the parties' combined monthly net incomes. If your monthly net income decreases, it is likely that your support obligation will decrease as well, provided that the payee has not had a decrease in his/her income and child care expenses have not changed. It's advisable to contact an attorney to assist and advise you about recalculating your support obligation using your most recent paystubs, unemployment statements or 2008 W-2’s.

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Location isn't just important when you're looking to buy a home, but also when you may be thinking about a divorce. The practice of one party filing a divorce in a far removed county from the residence of either party, which could be the result of low filing fees or the desire to place the divorce action in an inconvenient forum for the other party was dealt a lethal blow by a recent Pennsylvania Superior Court decision. The court established that venue, or the proper court in which you must file for divorce, must be established in court and "on the record" and it is the obligation of the trial court to do so. Venue can be established by residence, written agreement of both parties attached to the Complaint or otherwise made a part of the record, or through participation of both parties in the divorce action as required by other Pennsylvania Rules. Strict compliance is required to establish proper venue and a Divorce Decree issued not in compliance with the above rules can be vacated.

Divorces can not be filed in non-residence counties except with the consent of both parties. While there are occasions where parties may desire to have the divorce action conducted in a county not of their residence, perhaps for privacy reasons, the consent of both parties is required. It is advisable for both attorneys and parties filing for divorce to carefully consider whether it is appropriate to bring an action for divorce in a county where neither party resides. 

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There are essentially two types of divorce in Pennsylvania, fault and no fault. A fault divorce requires one spouse to prove the other has done one of the following:

• Deserted him or her without a reasonable cause for at least one year;
• Committed adultery;
• Entered into the marriage while he or she was married to another;
• Endangered the life of the other spouse;
• Sentenced to a term of imprisonment for two or more years; or
• Committed indignities to the other spouse such that his or her life is intolerable and burdensome.

This type of divorce generally requires a hearing and the presentation of evidence by the “innocent” spouse in order to prove that one of these things has occurred.

By contrast, a no fault divorce can be granted in the following situations:

• Where one spouse has been institutionalized for the 18 months before the divorce is sought and where there is no prospect of that spouse being released from the institution for an additional 18 months;
• Where both Parties agree that the marriage is irretrievably broken and 90 days have passed since the start of the divorce action; or
• Where one Party believes that the marriage is irretrievably broken and the parties have lived apart for at least 2 years.

A no fault divorce does not necessarily require either of the Parties to prove why the marriage has failed, only that the Parties have no real possibility of reconciliation. Most divorces in Pennsylvania are no fault divorces.

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Traditionally, you may have thought that a prenuptial agreement is common only among the rich and famous. However, a prenuptial agreement can be beneficial to any person considering marriage, regardless of the size of your personal wealth. Here are some reasons why you should consider having a postnuptial agreement in place prior to tying the knot.

1. You have children from a prior marriage whose financial interests you wish to protect.

Under Pennsylvania law, all property acquired during a marriage is marital property, including the increase in value of assets owned by a spouse prior to the marriage. Failure to protect non-marital assets could jeopardize your children's financial interest or future in the event of your death or divorce.

2. You have an inheritance in your name or expect to receive one during your marriage.

Your inheritance could become a marital asset subject to equitable distribution if you do not protect it in a prenuptial agreement.

3. You want to protect your family business or other assets you acquired prior to marriage.

All assets are subject to valuation during a divorce. Failure to protect your interest in the family business could lead to a complicated business valuation as part of an equitable distribution proceeding, and could open up a claim that it is a marital asset.

For similar reasons as stated above, you should consider a prenuptial agreement if any of the following are present in your case:

• You are the beneficiary of a trust,
• You earn significantly more than your partner,
• You have more income or assets than your partner
• Your partner has a tendency to "overspend" and has incurred significant premarital debt,
• You want to decrease your financial exposure for your partner's financial liabilities.

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The day finally arrives. Your attorney calls you or perhaps notifies you in writing that the Divorce Decree has been handed down. At long last (maybe six months, maybe a year, maybe even three or four years) it is finally over.

Not true! In the famous words of the "political philosopher" Yogi Berra, “it ain’t over till it’s over”. The Divorce Decree (assuming no appeal) in many cases is not the end, and many important matters may still require attention before that Postnuptial Agreement or that decision obtained after a Hearing with blood, sweat and tears - the result you worked so hard to achieve - materializes.

Like many other things, the devil is in the details and taking care of the details is still required. For example, the failure to remove the ex-spouse as a primary beneficiary of life insurance issued through an employer may negate the provisions of a Postnuptial Agreement which provides that the ex-spouse should have no interest in life insurance proceeds or other property of the spouse at death. 

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There is an adage that "change does not necessarily assure progress but progress requires change". In the case of the Lancaster County Domestic Relations Office, the change in office location assures progress. The office recently moved from its previous location on East King Street to a new location on the second floor of 150 North Queen Street, Lancaster, the former Armstrong building. Parking on that block of Queen Street is prohibited so be sure to park in either the Prince Street or Duke Street garage.

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I believe there is a general assumption that the divorce rate in Pennsylvania and around the country is continually rising. It seems we are constantly bombarded with the statement that "half of all marriages end in divorce." But is that really the case? A recent examination of the marriage and divorce statistics released by the Pennsylvania Department Health indicates otherwise. The marriage and divorce statistics for Pennsylvania go back as far as 1950. Some of the more interesting statistics indicate that the number of marriages in Pennsylvania peaked in 1973 at 101,076 and has been steadily decreasing. The most recent year for which data was available was 2006, when there were 71,511 marriages in Pennsylvania. Along with the decrease in the number of marriages, there has been a similar decrease in the number of divorces, with the number of divorces peaking in 1991 at 41,321 and has been continually decreasing to 34,894 in 2006. Divorce rates seem to be declining, although not nearly as quickly. The divorce rate is calculated as the number of divorces per 1,000 people. In 1990, the divorce rate in Pennsylvania was 3.3. Then in 1995, it declined to 3.1 and has remained steady through 2004 (last year statistics were available).The good news for Pennsylvania residents is that our divorce rate is well below the national rate of 3.6. 

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Pursuant to federal law, the statewide support guidelines must be reviewed at least once every four (4) years. The support guidelines currently in place were adopted in September 2005 and became effective in January 2006. Recently, the Pennsylvania Supreme Court Domestic Relations Procedural Rules Committee published for comment new child support guidelines. The public comment period ends on October 31, 2008.

The most significant change to the guidelines relates to the maximum monthly net income included in the guidelines. Under the proposal, the support guidelines would apply to all cases in which the parties' combined monthly net income falls below $30,000. Under the current guidelines, cases in which the parties' combined monthly net incomes exceed $20,000 are governed by Melzer v. Witsberger. Raising the maximum income permitted under the guideline formula will provide consistency and predictability in child support cases for clients in higher income brackets.

The guidelines are in circulation for comment only and may be revised by the Domestic Relations Rules Committee prior to adoption. As the recommended guidelines make their way through the process, we will keep you updated about changes that may affect you.