Second, the Superior Court dismissed husband’s appeal from the trial court’s finding that he had divested his stock in a family business merely to avoid his support obligation. Holding that husband cited no legal authority to support his argument, the issue was waived.

Finally, the Superior Court affirmed the trial court’s award of legal fees to the wife in the support proceeding. Holding that it is not necessary to find misconduct in order to award fees, the court relied upon the disparity between wife’s net income and husband’s net income. This finding was affirmed on appeal

Upon divorce from his second marriage, the trial court considered whether the increase in value of his investment account, funded with his premarital VA benefits, was subject to equitable distribution. Husband cited Section 3501(a)(6) and a federal law that exempts VA disability benefits from attachment or garnishment. Husband also cited a U.S. Supreme Court precedent, Porter v. Aetna Casualty & Surety Co., 370 U.S. 159 (1962), which established a three-pronged test for sheltering a veteran’s accumulated disability benefits in an account. In Porter, the U.S. Supreme Court held that VA benefits saved in a checking account would retain their exempt character provided that: (a) they were readily available as needed for support and maintenance; (b) they actually retained the qualities of moneys, and (c) they had not been converted into permanent investments.

The Superior Court in Goodemote held that the husband’s investment account did not meet the third prong of the test. Because the VA benefits had been invested in securities, mutual funds, and annuities, and were described by husband as his “retirement account,” they were converted into permanent investments, thereby losing their exempt status. The increase in value, which exceeded the initial value of the account at the date of marriage, was subject to equitable distribution. The trial court’s decision was affirmed.

1. Don’t wait. When facing any large task, it is tempting to procrastinate, but waiting only adds to the mental pressure. Generally speaking, most discovery requests must be answered within thirty days. The answer must be formatted by your lawyer to comply with the procedural rules, so in actuality, you should provide the information and documents to your lawyer in less than thirty days. Start by reading the request from beginning to end, considering whether you have the information and documents to answer each question. Make a note of the information that you need to gather from storage, accountants, financial institutions, or other sources. Contact those sources early so that they will have an opportunity to obtain the information and documents that you will need.
2. Understand the objections. When answering a discovery request, the rules allow respondents to raise objections to some of the requests if appropriate. Generally, the objections falls into three major categories: (a) the request is too broad or remote; (b) the information is privileged or irrelevant; or (c) the information is unavailable. Communicate your objections to your lawyer upon your initial review of the request, so that your lawyer can frame your objections in a legally-recognized way or explain why you may have to answer some requests that you object to.
3. Share the information. It may be time-consuming to answer questions thoroughly and gather documents, but it is worthwhile. If you litigate the case, then your lawyer will need information and documents as evidence in court; and if you do not produce the documents and information that your spouse has requested in discovery, you cannot use it yourself in court. Even if you settle your case, the discovery documents and information will be useful. Settlements generally require “full and fair disclosure,” which means informed consent. If you have not exchanged information and documents in discovery, your spouse might be able to challenge the validity of your settlement later, due to lack of full and fair disclosure.

Discovery is one of the most significant mileposts on the journey to resolution of a divorce. Without complete, accurate information, it is nearly impossible to settle or litigate child support, division of marital property, or other financial issues in divorce. Information is not useful if it is locked in your head. Share it with others through discovery.

In Reber v. Reiss (2012 Pa.Super. 86), the Superior Court observed that there is no Pennsylvania precedent on the issue of what to do with frozen embryos when spouses divorce. The courts of other states have considered three approaches. One approach is the “contractual” approach, in which the terms of the IVF contract might dictate what happens to the embryos upon the death or divorce of the donors. Only one state, Massachusetts, has refused to honor a contract that would have awarded the embryos to the ex-wife, forcing the ex-husband to become a father against his wishes.

Another approach is the “shared consent” approach adopted by Iowa’s highest court, who directed the ex-spouses to come up with an agreement as to how the embryos would be distributed.

The third approach is the “balancing of interests” test, in which the courts would decide the fate of the embryos based upon the competing interests of the ex-spouses. Our Superior Court found that the trial court had adopted this approach in its decision, which was affirmed. The Superior Court specifically considered the wife’s interest in procreating and the husband’s interest in avoiding procreation. The Court agreed with the wife that adoption or foster parenting were not adequate substitutes for procreation, and held that medical evidence was unnecessary to prove that wife could not conceive naturally. As for Husband’s objection to having more children, the Superior Court was satisfied with Wife’s promise to include Husband in the child’s life if he wished, or make all reasonable efforts to support the child without his assistance if he did not wish to be involved. (The Court pointedly indicated that Mother’s promise to refrain from seeking child support might not be enforceable.) Ultimately, the Superior Court upheld the trial court’s decision, finding that the Wife’s interest in procreating was greater than the Husband’s interest in avoiding procreation.

One of the leading authorities on divorce taxation, Melvin Frumkes, declares that “a couple with only one income producer will benefit from filing joint returns; that is, until their marriage is dissolved.” Still, the only sure way to know is to have an accountant run the figures both ways. Most tax preparation software used by professionals can calculate the taxes both ways without much additional expense. Just be sure that the tax preparer considers the alimony deduction (if any) and proper allocation of itemized deductions, dependency exemptions, and credits (including payroll withholding and estimated payments).

Whether filing jointly or separately, these are four key issues to consider:

1.         Filing status. Spouses who file separately may save money by electing the head of household status if they qualify. While dependency exemptions can be transferred between spouses to maximize their effectiveness, filing status cannot be transferred. Some tax preparers believe that separated spouses may elect “single” filing status, but it might be risky, especially if the other spouse elects “married filing separately” status.

2.         Alimony and itemized deductions. In Pennsylvania, spousal support paid during the separation and “unallocated” child and spousal support are generally treated as alimony for tax purposes. The paying spouse may deduct the payments from taxable income, and the receiving spouse must declare the income. When spouses file jointly, they cannot claim the deduction because the income wipes out the deduction. Thus, filing jointly confers a benefit on the receiving spouse who might otherwise have to pay income tax. Yet, in many cases, a joint return confers tax savings on the paying spouse that exceed the benefit of the alimony deduction. Separated spouses can agree to share the tax advantage of joint filing so that both spouses benefit.

When filing jointly, estranged spouses can pool their itemized deductions to maximize their tax savings. When filing separately, however, they have to allocate income and itemized deductions associated with jointly-titled assets. The bank might issue a joint statement for qualified mortgage interest and real estate tax deductions. Yet, the IRS might not assume that those deductions should be allocated equally. It is advisable to consult with a tax accountant or review the tax regulations before claiming your share of joint deductions or income. Separated spouses should communicate with each other to avoid discrepancies that could trigger a deficiency notice or IRS audit.

3.         Payments and credits. If spouses file jointly, all of their withholding, estimated payments and credits may be applied to reduce tax liability. If the spouses file separately, the IRS will recognize an agreement between the parties to allocate their estimated payments made in the year following a joint return. If the spouses do not agree, then the payments are allocated in proportion to the spouses’ tax liabilities as reported on their separate returns. Withholding is allocated to the spouse who paid it. Credits (such as the child tax credit and earned income credit) are more complex and require a careful analysis of the legal requirements.

4.         Unreported income and erroneous deductions. An entire body of law has developed around the issues of unreported income and erroneous deductions. If your spouse is working “under the table” or does not report all of the income from a business or professional practice, the best advice is to file separately. Underporting income or claiming false deductions can lead to additional tax, interest, and severe penalties. The IRS has created procedures to provide relief for taxpayers who file joint returns with a tax-cheater, but it is better to avoid that issue completely by filing separately.

CONCLUSION: Every taxpayer is responsible for filing an accurate tax return and paying their share of taxes. Yet, every year I hear stories about people who simply trusted their estranged spouse to take care of it; they were surprised to find out later that their spouse filed an inaccurate return, filed a separate return, or didn’t file at all. Don’t rely on someone else to file your tax return without checking it before it is filed; and don’t wait until the last minute!

These tips and more are discussed at length in Publication 504, “Divorced and Separated Individuals,” available here on the IRS website. Pursuant to applicable US Treasury Regulations (Circular 230), I must advise you that this article is not intended or written to be used, and cannot be used, by a reader for: (i) avoiding tax penalties that may be imposed on the reader under US Federal Tax Laws or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Instead you have the right to, and should, seek independent tax advice.

After a custody hearing, the trial court ordered that Father have visitation with the child for three periods per week at Mother’s church in DuBois until the child was 8 months old, and thereafter in Indiana for three slightly longer periods each week. Father appealed the trial court’s refusal to award partial custody, including overnight periods, after the child reached eight months. Mother contended that the appeal was interlocutory as it anticipated modification if either party should relocate.

During the pendency of the appeal, the trial court asked the Superior Court to remand for further proceedings as Father had relocated to Indiana, rendering irrelevant some of the issues raised in the appeal. The Superior Court refused to relinquish jurisdiction, as “the issues raised by Father on appeal are not addressed in either Mother’s petition to modify the custody order or the trial court’s request for remand.”

Substantively, the Superior Court vacated and remanded the case to the trial court for failure to consider all of the factors set forth in the new custody statute. The Superior Court felt that the trial court’s decision was based exclusively on the fact that Mother was breastfeeding and on the difficulty in communications between the parents. On remand, the Superior Court directed the trial court to analyze all 16 factors. The Superior Court also remarked that there was no obvious reason for restricting Father’s partial custody to what amounted to supervised visitation after the child was weaned. Unless the trial court on remand should determine that Father presented a safety risk to the child, he should be entitled to unrestricted partial custody periods in his home, the Court held.

Substantively, Judge Donohue also dissented from the decision allowing Mother to relocate. Judge Donohue noted that the majority applied the three-pronged Gruber test instead of the ten relocation criteria set forth in the new statute. In particular, Judge Donohue found that the trial court did not adequately consider factors number five (established pattern of conduct to promote or thwart the relationship of the child and the other parent) and ten (best interests).  Furthermore, Judge Donohue expressed her conviction that the Gruber factors were not supported by the evidentiary record.

While the majority found that Mother’s relocation would further her efforts to complete her post-graduate studies, Judge Donohue noted that Mother had not applied to any graduate studies program in her target city and elected to pursue the more obscure of two programs that she was considering. While most colleges, including those located in the Father’s region, would offer political science programs, Mother elected to concentrate on medieval studies instead.

Judge Donohue also noted that Mother made no efforts to use her existing education to pursue gainful employment as a teacher in Pennsylvania, which might have obviated the need to move. Instead she obtained a teaching certificate in Massachusetts, proving that she had not ruled out the possibility of teaching. Judge Donohue noted that Mother did not have a job or place to live waiting for her in Boston, so her relocation would not substantially improve the lives of Mother and her children. Mother’s extended family in the Boston area had not historically maintained regular contact with Mother and the children.

Judge Donohue also noted that Father was actively involved in the children’s lives, and coaching their baseball, basketball and soccer teams, and instructing them in martial arts. The substitute visitation arrangements proposed by Mother did not, in Judge Donohue’s opinion, provide an adequate alternative for maintaining the children’s relationship with Father. Judge Donohue also felt that the economic impact of relocation would be detrimental to the family, causing Father to incur substantial transportation expenses that he would not otherwise have to pay.

So far, neither party has petitioned for Supreme Court review. I know many lawyers who share the view of Judge Donohue that the standards for relocation should require herculean efforts by both parents to maintain the status quo. Currently, however, the law imposes no heavier burden upon the relocating party; and under an abuse of discretion standard, the trial court’s decision enjoys a presumption of correctness. Perhaps that explains this decision and the vigorous, well-reasoned dissent.

The case resulted in seven days of hearings. At the conclusion, the trial court awarded sole legal and physical custody to Mother, with supervised visitation to Father for two hours twice per week. Father’s visitation was supervised to avoid any further medical examinations or evaluations with Mother’s consent. The order was made final after Father filed motions to recuse the judge and for a mistrial. Father appealed.

On appeal, the Superior Court not only affirmed the custody order, but also applauded the trial judge for refusing to “allow such a blatant attempt of forum shopping to occur during a hotly contested custody battle” by denying the motion to recuse. “The record supports the conclusion,” the Court wrote, “that Father attempted to have the trial judge recuse herself after several days of testimony and his belief that the trial was not going his way. This manipulation of the court system cannot be allowed or encouraged.”

 The Superior Court also affirmed the trial court’s consideration of a custody evaluation that was prepared at an earlier stage of the litigation, even though the author did not testify because the case settled before going to trial. The report was attached to a motion for fees, and referenced by several of the witnesses during the hearings that led to the appealed order. While the report of an expert who did not testify is generally not admissible into evidence, the Court held, Father waived his objection by calling witnesses to rebut the report. In fact, Father’s witnesses were the first witnesses to testify about the report. Judge Strassberger wrote a concurring opinion, expressing the belief that the report was not offered for the truth of its findings or opinions, but to make sense of testimony given by other witnesses. He also found that the error, if any, was harmless as the trial court did not rely on the expert report in its decision.

The result of this decision is striking and illustrative. A father who cried “Wolf!” was reduced to supervised visitation after having nearly equal shared custody for most of the child’s life.

In her appeal, Mother argued that this case was not truly a “relocation” case because the proposed move would not significant impair Father’s ability to exercise his custody rights. In fact, she contended, the move would increase Father’s partial custody by substituting an addtional one weekend per month in place of his Wednesday night dinner periods. Father and the trial court disagreed, noting that Mother’s act of sending a relocation notice under the statute was a tacit admission that her proposed move was a relocation.

On appeal, the Superior Court affirmed the overall result, finding that the trial court did not err in denying relocation. In its opinion, the Superior Court dispelled the notion that Mother’s procedural compliance was a tacit admission of a relocation. The Court held that a party is not foreclosed from litigating any issue, including the issue of whether the proposed move is a “relocation,” when the relocation procedures are properly followed. The Court also held that the potential threat to Father’s custodial rights, and the impact on his ability to participate in the children’s activities during his noncustodial time, were sufficient to establish a relocation.

The York County trial court considered the labyrinthine intersection of case law concerning the presumption of paternity and paternity by estoppel. These two distinct but related concepts attribute parentage to a man who is not the child’s biological father under circumstances where equity dictates. The presumption of paternity is one of the “strongest presumptions in the law,” which designates the mother’s husband as the legal father of a child who is born to an intact marriage, unless the husband lacked access to the mother or was impotent at the time of conception. Brinkley v. King, 549 Pa. 241, 701 A.2d 176 (1997). Paternity by estoppel is a legal concept that prevents a man who assumes the duties of a child’s father, such as supporting the child financially, from denying his paternity.  Fish v. Behers, 559 A.2d 523, 741 A.2d 721 (1999).

The law surrounding these equitable principles was by no means clear. A vast array of complex fact patterns brought before our Courts resulted in a tangled web of decisions that required careful study to glean the controlling legal concepts. Still, it was reasonably clear that our Courts would not allow genetic testing if the child enjoyed the benefit of a father who was its mother’s husband or acted as the child’s father by supporting the child and being actively involved in the child’s life.

In KEM, the mother of the child appealed the trial court’s decision to dismiss a support action against the mother’s paramour, based on a finding that the child was born to a marriage that was somewhat intact and mother had treated her husband as the child’s father, which precluded her from suing her paramour for child support. (This permutation of the “paternity by estoppel” principle was intended to prevent mothers who enjoyed the benefits of an intact marriage from supplementing their family resources by suing an outsider for financial support.) The Superior Court affirmed the trial court’s decision on the basis of patenity by estoppel but not the presumption of paternity, reasoning that the latter principle would not protect the marriage since everyone knew that the mother’s husband was not the child’s biological father. Thus, in the Supreme Court, the only question certified on appeal was whether the mother was estopped from denying her husband’s paternity.

The majority opinion (5-1-2) was written by Justice Saylor. After an exhaustive review of existing case law and the parties’ legal and policy arguments, Justice Saylor determined that existing case law does not adequately address modern circumstances, such as the prevalent availability of genetic testing and the erosion of social stigma associated with illegitimacy. In place of the traditional criteria, Justice Saylor established a “best interests of the child” standard for judging paternity by estoppel in child support cases. This new standard will require both fathers (the husband and the paramour) to testify in paternity proceedings if possible, consider the relationship of the child to each, and perhaps look at the financial resources of each father and prospects for maintaining relationships with the mother and child. The Court stated that a guardian ad litem can be appointed to advocate the best interests of the child, and genetic testing can be performed to impose the costs of a GAL on the biological father (even if he has no other financial obligation to the child). The Court explicitly acknowledged that its decision “will obviously require development [of jurisdprudence] through multiple cases as different fact patterns arise.” To guide those decisions, the Court advised that presumptions should retain their greatest force in cases where as intact family exists, and in cases where no solid relationship has developed between the child and any putative father, the responsibility for fatherhood should lie with the biological parent. The Supreme Court remanded this case to the York County trial court for a more thorough assessment of the child’s best interests.

In a concurring opinion, Justice Orie Melvin scolded the trial court for not developing a more complete record. She also endorsed the dissenting opinion filed in the Superior Court appeal, wherein then-Judge McCaffery wrote the majority opinion affirming the trial court’s decision. Judge Orie Melvin responded to the dissenting opinion by Justices Baer and McCaffery, arguing that the existing case law is outmoded in light of modern technology and social mores.

Justice Baer wrote a dissenting opinion, in which he did not defend existing case law, but advocated the outright abolition of presumptions. Citing the realities of modern life, Justice Baer wrote that most children born of an affair will eventually learn their true paternity. In those circumstances, the mother and paramour should be precluded from denying the husband’s paternity only if he invokes the doctrine to maintain his status as the child’s legal father.

Reading these opinions, one must wonder what effect the decision will have on a large and growing of body of cases involving families on public assistance, same-sex couples, children born by surrogacy, and other non-traditional family constellations where the child’s “best interests” are especially complex. The Court’s decision converts a child support proceeding into a mini-custody hearing in some respects by focusing on a criteria never before considered in the child support proceedings. Perhaps the Court’s call for legislative action on this topic are overdue.