INSTALLMENT PAYMENT PLAN OF MARITAL ESTATE TO WIFE TO AVOID FINANCIAL HARDSHIP
A divorce master did not err in ordering husband to pay wife her share of the marital estate in five installments since requiring husband to liquidate his assets and immediately pay wife a lump sum would impose severe financial hardship upon him. The court overruled wife’s exceptions in part.
The parties were married in 2002 and separate mid-2013. Husband pays wife $1,750 per month in child support and alimony pendente lite. After husband filed for divorce, an appointed divorce master held hearings that focused primarily on equitable distribution of the marital estate. The estate consisted of husband’s individual retirement account, his ownership interest in a retail clothing company called New York Urban, Inc., and real estate that husband owned in whole or part. The master issued a report and recommendation valuing the marital estate at $432,461. He awarded wife 54 percent of the estate and husband 46 percent, but reduced wife’s amount by the $20,000 she had already received from husband. The master recommended that husband transfer his IRA/SEP valued at $125,436 to wife within 90 days after the execution of a divorce decree. He also recommended that husband pay the balance of $88,437 owed to wife in five yearly installments. Both parties filed exceptions. Wife argued, inter alia, that the master erred in devising a distribution plan that required husband to pay the $88,437 over a five-year period. According to wife, she should be paid in full immediately because husband had control of numerous real estate holdings which could be liquidated, while wife had only minimal resources. Husband argued that requiring him to make one lump payment would result in an economic hardship. There is no legal requirement that a spouse’s interest in the marital estate be distributed in a lump sum payment, the court observed. Rather, the Divorce Code provides courts with flexibility as they attempt to achieve equality. “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 … in such percentages and in such manner as the court deems just after considering all relevant factors,” the court said, citing 23 Pa.C.S. §3502 (a). The court also found that Pennsylvania case law supported the master’s decision to allow for a five-year payment plan. In 1990’s Wayda v. Wayda, the appellate court affirmed an order allowing wife to pay husband his share of the marital property in installments over a 10-year period. The trial court had the discretion to order wife to pay husband via any method it saw fit, provided the result was a fair and just determination of the parties’ rights, the Wayda court said. Here, husband testified that his business was horrible, his earnings had declined by about $10,000 and that his pay was irregular. He also noted that closing his business was not a viable option due to the amount of debt the businesses carried. The master correctly assessed husband’s financial condition given the precarious future of his business and the decline in his earnings. To require husband to liquidate his assets and immediately pay wife a lump sum would impose severe financial hardship on husband as well as a concomitant reduction in his child support obligation, the court said in its opinion overruling this exception.
Digest of Recent Opinions, Pennsylvania Law Weekly, 42 PLW 37, Tuesday, January 8, 2019. Napoli v. Napoli, PICS Case No. 18-1065 (C.P. Berks Aug. 23, 2018) Lash, J.
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