CHAPTER 35

PROPERTY RIGHTS

 

Sec.

3501.  Definitions.

3502.  Equitable division of marital property.

3503.  Effect of divorce on property rights generally.

3504.  Disposition of property after termination of marriage.

3505.  Disposition of property to defeat obligations.

3506.  Statement of reasons for distribution.

3507.  Division of entireties property between divorced persons.

3508.  Conveyance of entireties property to divorced spouse.

 

Enactment.  Chapter 35 was added December 19, 1990, P.L.1240, No.206, effective in 90 days.

Cross References.  Chapter 35 is referred to in section 3701 of this title.

§ 3501.  Definitions.

(a)  General rule.--As used in this chapter, "marital property" means all property acquired by either party during the marriage and the increase in value of any nonmarital property acquired pursuant to paragraphs (1) and (3) as measured and determined under subsection (a.1). However, marital property does not include:

(1)  Property acquired prior to marriage or property acquired in exchange for property acquired prior to the marriage.

(2)  Property excluded by valid agreement of the parties entered into before, during or after the marriage.

(3)  Property acquired by gift, except between spouses, bequest, devise or descent or property acquired in exchange for such property.

(4)  Property acquired after final separation until the date of divorce, except for property acquired in exchange for marital assets.

(5)  Property which a party has sold, granted, conveyed or otherwise disposed of in good faith and for value prior to the date of final separation.

(6)  Veterans' benefits exempt from attachment, levy or seizure pursuant to the act of September 2, 1958 (Public Law 85-857, 72 Stat. 1229), as amended, except for those benefits received by a veteran where the veteran has waived a portion of his military retirement pay in order to receive veterans' compensation.

(7)  Property to the extent to which the property has been mortgaged or otherwise encumbered in good faith for value prior to the date of final separation.

(8)  Any payment received as a result of an award or settlement for any cause of action or claim which accrued prior to the marriage or after the date of final separation regardless of when the payment was received.

(a.1)  Measuring and determining the increase in value of nonmarital property.--The increase in value of any nonmarital property acquired pursuant to subsection (a)(1) and (3) shall be measured from the date of marriage or later acquisition date to either the date of final separation or the date as close to the hearing on equitable distribution as possible, whichever date results in a lesser increase. Any decrease in value of the nonmarital property of a party shall be offset against any increase in value of the nonmarital property of that party. However, a decrease in value of the nonmarital property of a party shall not be offset against any increase in value of the nonmarital property of the other party or against any other marital property subject to equitable division.

(b)  Presumption.--All real or personal property acquired by either party during the marriage is presumed to be marital property regardless of whether title is held individually or by the parties in some form of co-ownership such as joint tenancy, tenancy in common or tenancy by the entirety. The presumption of marital property is overcome by a showing that the property was acquired by a method listed in subsection (a).

(c)  Defined benefit retirement plans.--Notwithstanding subsections (a), (a.1) and (b):

(1)  In the case of the marital portion of a defined benefit retirement plan being distributed by means of a deferred distribution, the defined benefit plan shall be allocated between its marital and nonmarital portions solely by use of a coverture fraction. The denominator of the coverture fraction shall be the number of months the employee spouse worked to earn the total benefit and the numerator shall be the number of such months during which the parties were married and not finally separated. The benefit to which the coverture fraction is applied shall include all postseparation enhancements except for enhancements arising from postseparation monetary contributions made by the employee spouse, including the gain or loss on such contributions.

(2)  In the case of the marital portion of a defined benefit retirement plan being distributed by means of an immediate offset, the defined benefit plan shall be allocated between its marital and nonmarital portions solely by use of a coverture fraction. The denominator of the coverture fraction shall be the number of months the employee spouse worked to earn the accrued benefit as of a date as close to the time of trial as reasonably possible and the numerator shall be the number of such months during which the parties were married and not finally separated. The benefit to which the coverture fraction is applied shall include all postseparation enhancements up to a date as close to the time of trial as reasonably possible except for enhancements arising from postseparation monetary contributions made by the employee spouse, including the gain or loss on such contributions.

(Nov. 29, 2004, P.L.1357, No.175, eff. 60 days)

 

2004 Amendment.  Act 175 amended subsec. (a) and added subsecs. (a.1) and (c). See section 5(6) of Act 175 in the appendix to this title for special provisions relating to applicability.

Equitable Distribution Proceedings.  Section 1 of Act 4 of 2005 provided that subsec. (c) shall apply to all equitable distribution proceedings pending on or after the effective date of section 1.

§ 3502.  Equitable division of marital property.

(a)  General rule.--Upon the request of either party in an action for divorce or annulment, the court shall equitably divide, distribute or assign, in kind or otherwise, the marital property between the parties without regard to marital misconduct in such percentages and in such manner as the court deems just after considering all relevant factors. The court may consider each marital asset or group of assets independently and apply a different percentage to each marital asset or group of assets. Factors which are relevant to the equitable division of marital property include the following:

(1)  The length of the marriage.

(2)  Any prior marriage of either party.

(3)  The age, health, station, amount and sources of income, vocational skills, employability, estate, liabilities and needs of each of the parties.

(4)  The contribution by one party to the education, training or increased earning power of the other party.

(5)  The opportunity of each party for future acquisitions of capital assets and income.

(6)  The sources of income of both parties, including, but not limited to, medical, retirement, insurance or other benefits.

(7)  The contribution or dissipation of each party in the acquisition, preservation, depreciation or appreciation of the marital property, including the contribution of a party as homemaker.

(8)  The value of the property set apart to each party.

(9)  The standard of living of the parties established during the marriage.

(10)  The economic circumstances of each party at the time the division of property is to become effective.

(10.1)  The Federal, State and local tax ramifications associated with each asset to be divided, distributed or assigned, which ramifications need not be immediate and certain.

(10.2)  The expense of sale, transfer or liquidation associated with a particular asset, which expense need not be immediate and certain.

(11)  Whether the party will be serving as the custodian of any dependent minor children.

(b)  Lien.--The court may impose a lien or charge upon property of a party as security for the payment of alimony or any other award for the other party.

(c)  Family home.--The court may award, during the pendency of the action or otherwise, to one or both of the parties the right to reside in the marital residence.

(d)  Life insurance.--The court may direct the continued maintenance and beneficiary designations of existing policies insuring the life or health of either party which were originally purchased during the marriage and owned by or within the effective control of either party. Where it is necessary to protect the interests of a party, the court may also direct the purchase of, and beneficiary designations on, a policy insuring the life or health of either party.

(e)  Powers of the court.--If, at any time, a party has failed to comply with an order of equitable distribution, as provided for in this chapter or with the terms of an agreement as entered into between the parties, after hearing, the court may, in addition to any other remedy available under this part, in order to effect compliance with its order:

(1)  enter judgment;

(2)  authorize the taking and seizure of the goods and chattels and collection of the rents and profits of the real and personal, tangible and intangible property of the party;

(3)  award interest on unpaid installments;

(4)  order and direct the transfer or sale of any property required in order to comply with the court's order;

(5)  require security to insure future payments in compliance with the court's order;

(6)  issue attachment proceedings, directed to the sheriff or other proper officer of the county, directing that the person named as having failed to comply with the court order be brought before the court, at such time as the court may direct. If the court finds, after hearing, that the person willfully failed to comply with the court order, it may deem the person in civil contempt of court and, in its discretion, make an appropriate order, including, but not limited to, commitment of the person to the county jail for a period not to exceed six months;

(7)  award counsel fees and costs;

(8)  attach wages; or

(9)  find the party in contempt.

(f)  Partial distribution.--The court, upon the request of either party, may at any stage of the proceedings enter an order providing for an interim partial distribution or assignment of marital property.

(Nov. 29, 2004, P.L.1357, No.175, eff. 60 days)

 

2004 Amendment.  Act 175 amended subsec. (a) and added subsec. (f). See section 5(8) and (9) of Act 175 in the appendix to this title for special provisions relating to applicability.

§ 3503.  Effect of divorce on property rights generally.

Whenever a decree or judgment is granted which nullifies or absolutely terminates the bonds of matrimony, all property rights which are dependent upon the marital relation, except those which are vested rights, are terminated unless the court expressly provides otherwise in its decree. All duties, rights and claims accruing to either of the parties at any time theretofore in pursuance of the marriage shall cease, and the parties shall severally be at liberty to marry again as if they had never been married.

§ 3504.  Disposition of property after termination of marriage.

Unless provided otherwise by the court, whenever a decree of divorce or annulment is entered by a court of competent jurisdiction, both parties whose marriage is terminated or affected shall have complete freedom of disposition as to their separate real and personal property and may mortgage, sell, grant, convey or otherwise encumber or dispose of their separate property, whether the property was acquired before, during or after coverture, and neither need join in, consent to or acknowledge a deed, mortgage or instrument of the other.

§ 3505.  Disposition of property to defeat obligations.

(a)  Preliminary relief.--Where it appears to the court that a party is about to leave the jurisdiction of the court or is about to remove property of that party from the jurisdiction of the court or is about to dispose of, alienate or encumber property in order to defeat equitable distribution, alimony pendente lite, alimony, child and spousal support or a similar award, an injunction may issue to prevent the removal or disposition and the property may be attached as prescribed by general rules. The court may also issue a writ of ne exeat to preclude the removal.

(b)  Inventory of property.--Both parties shall submit to the court an inventory and appraisement, which shall contain all of the following:

(1)  A list of the property owned or possessed by either or both of them as of:

(i)  the date of separation; and

(ii)  thirty days prior to the date of hearing on equitable distribution.

(2)  A list of the value of the property owned or possessed by either or both of them as of:

(i)  the date of acquisition;

(ii)  the date of separation; and

(iii)  thirty days prior to the date of hearing on equitable distribution.

(3)  A list of the liabilities of either or both of them as of 30 days prior to the date of hearing on equitable distribution, whether or not the liabilities are related to the property set forth in the inventory and appraisement.

(c)  Discovery.--Discovery under this part shall be as provided for all other civil actions under the Pennsylvania Rules of Civil Procedure.

(d)  Constructive trust for undisclosed assets.--If a party fails to disclose information required by general rule of the Supreme Court and in consequence thereof an asset or assets with a fair market value of $1,000 or more is omitted from the final distribution of property, the party aggrieved by the nondisclosure may at any time petition the court granting the award to declare the creation of a constructive trust as to all undisclosed assets for the benefit of the parties and their minor or dependent children, if any. The party in whose name the assets are held shall be declared the constructive trustee unless the court designates a different trustee, and the trust may include any terms and conditions the court may determine. The court shall grant the petition upon a finding of a failure to disclose the assets as required by general rule of the Supreme Court.

(e)  Encumbrance or disposition to third parties.--An encumbrance or disposition of marital property to third persons who paid wholly inadequate consideration for the property may be deemed fraudulent and declared void.

(Nov. 29, 2004, P.L.1357, No.175, eff. 60 days)

 

2004 Amendment.  Act 175 amended subsec. (d). Section 5(10) of Act 175 provided that the amendment shall apply to all equitable distribution proceedings irrespective of whether the proceeding was commenced before, on or after the effective date of par. (10).

Suspension by Court Rule.  Section 3505(b) was suspended by Pennsylvania Rule of Civil Procedure No. 1920.91, as amended May 5, 1997, insofar as it applies to the practice and procedure in actions for divorce or annulment of marriage.

§ 3506.  Statement of reasons for distribution.

In an order made under this chapter for the distribution of property, the court shall set forth the percentage of distribution for each marital asset or group of assets and the reason for the distribution ordered.

(Nov. 29, 2004, P.L.1357, No.175, eff. 60 days)

 

2004 Amendment.  Section 5(11) of Act 175 provided that the amendment shall apply to all orders made on or after the effective date of par. (11).

§ 3507.  Division of entireties property between divorced persons.

(a)  General rule.--Whenever married persons holding property as tenants by entireties are divorced, they shall, except as otherwise provided by an order made under this chapter, thereafter hold the property as tenants in common of equal one-half shares in value, and either of them may bring an action against the other to have the property sold and the proceeds divided between them.

(b)  Division of proceeds.--Except as provided in subsection (c), the proceeds of a sale under this section, after the payment of the expenses of sale, shall be equally divided between the parties.

(c)  Liens.--The amount of any lien entered of record jointly against both of the parties, together with any interest due on the lien and docket costs, shall be deducted from the proceeds of sale and the amount of the liens entered of record against either of the parties, together with any interest due on the liens and docket costs, shall be deducted from the share of the party against whom the lien is filed and paid to the person or persons to whom the amount of the lien is due and payable.

(d)  Record of divorce decree.--No decree of divorce shall be effective to change the existing law relating to liens upon property held by tenants by the entireties except a decree of divorce that is valid in this Commonwealth and not until the decree of divorce or a certified copy of the decree is recorded in the office of the recorder of deeds of the county where the property is situate. The decree shall be indexed in the grantor's index against each of the tenants by the entireties.

 

Saved from Suspension.  Pennsylvania Rule of Civil Procedure No. 1910.49, as amended March 30, 1994, provided that section 3507 shall not be deemed suspended or affected by Rules 1910.1 through 1910.31 governing actions for support insofar as section 3507 provides for tenancy in common of property held by the entireties after divorce.

§ 3508.  Conveyance of entireties property to divorced spouse.

Whenever married persons have acquired real estate as tenants by entireties and thereafter are divorced, either former spouse, except as otherwise provided by an order made under this chapter, may convey to the other, without the joinder of the other, the grantor's interest in the real estate so that the grantee holds the real estate in fee simple, freed from all right, title and interest which the grantor had in the real estate as a tenant by the entireties.