• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
MacElree Harvey, Ltd.

MacElree Harvey, Ltd.

Initiative in Practice

  • Home
  • Legal Services
        • Banking & Finance Law
        • Business & Corporate Law
        • Criminal Defense Law
        • Employment Law
        • Estates & Trusts Law
        • Family Law
        • Litigation Law
        • Personal Injury Law
        • Real Estate & Land Use Law
        • Tax Law
  • Our Team
        • Joseph A. Bellinghieri
        • Patrick J. Boyer
        • Krzysztof M. Bozentka
        • Jeffrey P. Burke
        • Robert A. Burke
        • Matthew C. Cooper
        • John C. Cronin
        • Daniel T. Crossland
        • Marie I. Crossley
        • Harry J. DiDonato
        • Caroline G. Donato
        • Lindsay A. Dunn
        • Sally A. Farrell
        • Brian J. Forgue
        • William J. Gallagher
        • Patrick J. Gallo, Jr.
        • Mary Kay Gaver
        • J. Charles Gerbron, Jr.
        • Leo M. Gibbons
        • Carolina Heinle
        • Court Heinle
        • Daniel Horowitz
        • Amanda Jester
        • Peter E. Kratsa
        • Mary E. Lawrence
        • Daniel R. Losco
        • Michael G. Louis
        • Thomas C. Marconi
        • John F. McKenna
        • Matthew M. McKeon
        • Brian L. Nagle
        • Ronald C. Nagle
        • Lance J. Nelson
        • Timothy F. Rayne
        • Michael C. Rovito
        • Duke Schneider
        • Tiffany M. Shrenk
        • Andrew R. Silverman
        • Ashley B. Stitzer
        • Louis N. Teti
        • Aileen Wang
        • Beverly J. Wik
        • Felix Yelin
  • About Us
    • Our History
    • Our Approach
    • Social Responsibility
    • Testimonials
  • News & Updates
    • Articles by Our Attorneys
    • News
    • Podcasts
    • Videos
    • Newsletters
  • Offices
    • Centreville, DE
    • Hockessin, DE
    • Kennett Square, PA
    • West Chester, PA
  • Contact
  • (610) 436-0100

Pennsylvania Divorce

Is it Cheaper to Keep Her (or Him)? How Spousal Support is Calculated

October 15, 2018 by Lance J. Nelson, Esq. Leave a Comment

By Shannon C. Braun, Paralegal and Lance J. Nelson, Esquire–

spousal support ID 6639115 © Cameramannz | Dreamstime.com

When a husband and wife decide to get divorced, during the divorce process one spouse may owe the other spouse spousal support. In Pennsylvania, spousal support is calculated by a simple formula in accordance with the support guidelines. The formula for the calculation of spousal support is 40% of the difference between the parties’ net incomes without dependent children and 30% with dependent children.

Basic spousal support calculation:

Robert Jones is a high school teacher and his wife Kimberly is an executive with a pharmaceutical company.  Bob and Kim have been married for twelve years and they do not have any minor children.  Bob earns $6,000 net per month and Kim earns $16,000 net per month, Bob may be entitled to $4,000 per month in spousal support ($16,000 – $56,000 = $10,000 x 40% = $4,000) from Kim. If Bob and Kim had a minor child(ren), then Bob may be entitled to $3,000 (30% of $10,000 = $3,000) per month in spousal support from Kim.

Deviation due to medical insurance:

As in child support, there are additional expenses which may warrant an upward or downward deviation when calculating spousal support. One of these expenses is medical insurance premiums. Say Bob provides medical insurance for Kim with a monthly premium of $800 per month. This expense would be split proportionately between the parties’ based on their respective incomes and then added to Bob’s support award.  Specifically, Kim’s net income is 73% of the total combined household income of $22,000 ($6,000 + $16,000 = $22,000; $16,000/$22,000 = 73%). Therefore, Kim’s portion of the medical insurance premium is $584 per month, which would be added into her support obligation to Bob resulting in Kim paying Bob $4,584 per month ($4,000 + $584= $4,584). If Kim provided the medical insurance Bob’s portion or $216 ($800 x 27%= $216) would be deducted from Kim’s support obligation. If the parties’ have minor children, the medical insurance deviation would be calculated under the child support calculations.

Marital mortgage deviation:

Another expense which may be considered when calculating spousal support is the mortgage on the marital residence. It is assumed that the spouse who remains occupying the marital residence during the divorce, is responsible for all of the expenses related to the residence. But the court may award a deviation in spousal support if the mortgage (including real estate taxes and homeowners insurance) exceeds 25% of the occupying spouse’s net income, including his or her spousal and child support awards. The Court may order a spouse to pay up to 50% of a portion of the mortgage which is in excess of the 25% of the occupying spouse’s net income.

Sample marital mortgage deviation calculations:   

If Bob and Kim’s marital mortgage (including taxes and homeowners) is $4,000 per month and Bob is living in the marital residence, Kim can be ordered to pay up to 50% of $1,500 in addition to her basic spousal support. The $1,500 is calculated as such: Bob’s income is $6,000 + his spousal support award is $4,000, for a total of $10,000. Twenty-five (25%) percent of Bob’s income would, therefore, be $2,500. So, the mortgage of $4,000 is $1,500 ($4,000 – $2,500 = $1,500) in excess of 25% of Bob’s income. Therefore, Kim can be ordered to pay up to 50% of $1,500.  A reverse mortgage deviation can be given if the spouse paying spousal support resides in the house. Whereas, if Kim was living in the house, she could get credit for up to 50% of $1,000 which is the amount remaining in excess of 25% of her net income. This is calculated as such, $16,000 net income – $4,000 spousal support = $12,000 x 25% = $3,000; $4,000 mortgage – $3,000 = $1,000.

In conclusion:

The formula of 40% or 30% may seem simple but with many other factors which can be taken into consideration, it can become complicated. Spousal support also has entitlement issues that may need to be addressed and a family law professional can give you guidance to your options of other forms of support such as, Alimony Pendente Lite and even post-divorce support of Alimony. Bottom line is, even if you are good at math, it is always best to consult a family law professional to help you sort out your best options so that you only pay what you owe or that you get paid all of the support that you may be entitled to.

Note:   Congress changed the tax law in December of 2017.  Effective January 1, 2019, alimony (or spousal support) is no longer deductible on the federal taxes of the payor or includable in the income of the recipient.  The formulas discussed above will likely change as a result of this change in tax law.  However, to date, the Pennsylvania Supreme Court has not finalized any changes.


The members of the MacElree Harvey Family Law team possess the personal and professional skills necessary to help Delaware and Pennsylvania clients navigate the financial and emotional issues that often arise in Family Law cases.

If you have a Family Law matter and would like to schedule a consultation, please call (610) 436-0100.

Filed Under: Articles by Our Attorneys Tagged With: divorce, Pennsylvania Divorce, spousal support

Business Valuation in a Pennsylvania Divorce: Consideration of Sale Costs And Tax Effect

September 21, 2017 by Ashley B. Stitzer, Esq.

Valuation of marital assets is often a key dispute in divorce proceedings, particularly when a martial business is to be distributed. The Divorce Code does not provide a specific method for valuing assets and trial courts are given broad discretion when determining equitable distribution. However, the Pennsylvania Superior Court recently reiterated that consideration of the expenses and tax ramifications of a sale or liquidation of a marital asset is appropriate when awarding the asset in equitable distribution, regardless of whether a sale or liquidation of the asset was intended.

The Pennsylvania Divorce Code identifies a non-exclusive list of factors for the Court’s consideration when determining equitable division of marital property. Two identified factors are the Federal, State and local tax ramifications and the expenses of sale, transfer or liquidation associated with the asset. The statutory language states that the tax ramifications and sale, transfer or liquidation expenses “need not be immediate and certain.” 23 Pa.C.S.A. §§ 3502(a)(10.1) and(10.2).

Although the language in the equitable division statute provides that tax ramifications and sale expenses are relevant considerations, the statute does not mandate that taxes and expenses be deducted from the determined value when awarding an asset. When interpreting this statutory language, trial courts have determined the value of a marital asset without deduction of the tax ramifications and expenses associated with a sale or liquidation when there is evidence that a sale or liquidation is not anticipated.


Equity is best served by consideration of the tax effect and sale and liquidation costs when awarding an asset in equitable distribution regardless of whether a sale or liquidation is anticipated.


In a recent decision in Carney v. Carney, —A.3d —, 2017 WL 2952913 (Pa. Super., July 11, 2017), the Pennsylvania Superior Court reiterated that deduction of tax ramifications and sale expenses was the fair and just method for valuation of the asset even if a sale or liquidation was not contemplated in the divorce. In Carney, the trial court distributed the marital business solely to husband, without consideration of costs associated with a potential sale of the business, and then equalized the distribution to husband by requiring husband to compensate wife through interest free monthly payments. The trial court dismissed husband’s argument that the award of the business should be tax effected. The trial court reasoned that it was not required to apply a tax effect value to any of the marital assets because there was no evidence that the parties intended to sell any of the assets.

On appeal, the Superior Court reviewed its prior decision in Balicki v. Balicki, 4 A.3d 654 (Pa.Super. 2010), in which the Superior Court rejected the argument that expenses and tax ramifications associated with the sale, transfer, or liquidation of a marital asset are only relevant in an equitable distribution determination if a sale of the asset is likely because the argument violates the clear language in the statute that tax ramifications and sale or liquidation expenses “need not be immediate and certain.” The Superior Court noted the clear legislative intent to stop the practice of the lower courts analyzing the prospect of sale of an asset and that the assets simply be given the value they would have at distribution after deducting every expense necessary to achieve liquidation. Balicki, 4 A.3d at 64 (citations omitted).

Reiterating its reasoning in Balicki, the Carney Court observed that the trial court’s equitable distribution order provided husband with the entire business, which could not be converted to cash without significant expense associated with a sale process, while wife would receive monthly payments of cash without equivalent expenses. The Superior Court held that the trial court erred in failing to account for the costs associated with the potential sale of the business before assigning the asset to husband and remanded the case on the issue.

Thus, the Superior Court has made clear that equity is best served by consideration of the tax effect and sale and liquidation costs when awarding an asset in equitable distribution regardless of whether a sale or liquidation is anticipated. Indeed, if the assets were sold through the divorce proceedings, the parties would realize and share the tax and sale expense consequences. To find otherwise may provide a windfall to one party through receipt of tax free asset transfers in equitable distribution if the other party cannot realize the value of an asset transfer without sale expense and tax liabilities attached.


Ashley Stitzer

Ashley B. Stitzer is a family law attorney representing men and women in all aspects of family law matters, including divorce, alimony/spousal support, equitable distribution and property division, marital agreements, child support and child custody. From custody disputes and support issues to complex divorce and property division, Ashley takes a direct, personal approach to resolving each client’s family law concerns and prides herself on being thorough, passionate and laser-focused on her clients’ needs. Ashley also has significant experience from prior practice representing businesses in corporate bankruptcy matters which she utilizes regularly in her representation of high net worth clients in divorce proceedings, including representations involving business valuation and employee stock ownership plans. If you’d like to schedule a consultation with Ashley, feel free to email her at [email protected] or call her at 610-840-0243. 

Filed Under: Articles by Our Attorneys Tagged With: Business Valuation, Pennsylvania Divorce

Primary Sidebar

  • Articles by Our Attorneys
  • News
  • Podcasts
  • Videos
  • Newsletters

Footer

(610) 436-0100

LEGAL SERVICES

  • Banking & Finance Law
  • Business & Corporate Law
  • Criminal Defense Law
  • Employment Law
  • Estates & Trusts Law
  • Family Law
  • Litigation Law
  • Personal Injury Law
  • Real Estate & Land Use Law
  • Tax Law

ABOUT US

  • Our History
  • Our Approach
  • Social Responsibility
  • Testimonials

NEWS & INSIGHTS

  • Articles by Our Attorneys
  • News
  • Podcasts
  • Videos
  • Newsletters

OFFICES

Centreville, DE

5721 Kennett Pike
Wilmington, DE 19807
302-654-4454
Learn More

Hockessin, DE

724 Yorklyn Rd #100
Hockessin, DE 19707
302-239-3700
Learn More

Kennett Square, PA

209 East State Street Road
Kennett Square, PA 19348
610-444-3180
Learn More

West Chester, PA

17 West Miner Street
West Chester, PA 19382
610-436-0100
Learn More

  • Terms of Use
  • Privacy Policy
  • Disclaimer
  • Staff Only
  • Careers

© 2023 and all rights reserved by MacElree Harvey, Ltd.