David Anderson is principal of David Anderson & Associates, a Philadelphia forensic accounting firm that provides a full range of forensic accounting services including fraud investigation and fraud deterrence programs in Philadelphia and the Delaware Valley.
One of the key tasks in a divorce is identifying the marital versus the non-marital assets of the divorcing couple.
To obtain a better understanding of the key issues involved regarding marital versus non-marital assets, David Anderson, principal of David Anderson & Associates, a Philadelphia forensic accounting firm that provides marital dissolution and business valuation services in Philadelphia and the Delaware Valley, interviewed Rochelle Bobman, Esquire. Ms. Bobman is an attorney-mediator who is a member of the Bort Law Firm, located in Malvern, Pennsylvania.
Ms. Bobman explained that the Pennsylvania Divorce Code sets forth a presumption that all real estate and/or personal property (vehicles, furnishings, art, collectibles, antiques, jewelry, investment, checking, savings and retirement accounts, and businesses) acquired by either party during the marriage are considered marital property, regardless of whether the title is held individually, or by the parties in some form of co-ownership.
Non-marital property includes, for example, assets acquired by gift or inheritance, property acquired prior to the marriage or after the date of separation or divorce filing, and payment received as a result of an award or settlement for a cause of action which arose prior to the marriage or after the date of separation. The increase in value of non-marital property acquired prior to marriage or by gift or inheritance is, however, a marital asset. Parties can agree that certain assets (and their subsequent earnings or increase in value) remain non-marital by executing a prenuptial agreement.
The increase in value of any non-marital property acquired prior to marriage is measured from the date of marriage (or date of inheritance) to the date of final separation or the date of an equitable distribution hearing, whichever date results in a lesser increase. For example, if a party acquires real property prior to marriage, the parties may have to obtain up to three appraisals to determine the increase in value: an historical appraisal as of date of marriage, an appraisal as of date of separation and an appraisal as close as possible to the date of Hearing.
If non-marital assets are comingled with marital assets, non-marital assets can become marital assets. This can happen when one or both spouses deposits a non-marital asset to a joint checking, savings, or investment account, adds a spouse’s name to the title of real estate acquired prior to marriage, or contributes proceeds of sale from a pre-marital property to purchase a marital residence. There is no provision in the Pennsylvania Divorce Code providing for a spouse to receive credit for contributing a non-marital asset to a marital asset. Certain judges and hearing officers have the discretion, however, to apply credit, which diminishes at the annual rate of 5%, and often disappears after a period of 10 years.
As illustrated above, there are many key issues involved in determining marital versus non-marital property. Very often, the parties will need to engage a forensic accountant to trace both marital and non-marital assets throughout a marriage, particularly if some of the non-marital assets have been co-mingled with marital assets.
If you need of a marital dissolution accountant in Philadelphia, or if you require any other services of a forensic accounting expert in Philadelphia and the Delaware Valley, please contact the Philadelphia forensic accounting firm of David Anderson & Associates by calling David Anderson at 267-207-3597 or emailing him at firstname.lastname@example.org.
About David Anderson & Associates
David Anderson & Associates is a Philadelphia forensic accounting firm that provides a full range of forensic accounting services in Philadelphia and the Delaware Valley. The experienced professionals at David Anderson & Associates provide forensic accounting, business valuation, fraud investigation, fraud deterrence, litigation support, economic damage analysis, business consulting and outsourced CFO services. Company principal David Anderson is a forensic accounting expert who has more than 30 years of experience in financial and operational leadership positions and is a Certified Public Accountant, a Certified Fraud Examiner, and a Certified Valuation Analyst.