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Parent Who Concealed Income Increases Must Pay Legal Fees

by bvertz on Aug 18, 2009 • Comments Closed • , , , , , , , ,

In Krebs v. Krebs (“Krebs II”), 2009 WL 1759726 (Pa.Super. 2009), the Superior Court of Pennsylvania considered whether to award legal fees to a parent who won modification of child support from the other parent, who had concealed increases in his income. This recent decision arose from an earlier case (Krebs v. Krebs (“Krebs I”), 944 A.2d 487 (Pa.Super. 2008)), in which the Court granted retroactive modification for a period prior to the filing of a modification petition due to the payer’s misrepresentation.

Krebs II was a divided decision. The majority ordered Father to reimburse 100% of Mother’s legal fees, or $15,408, to recover $72,603 in child support. The Court remarked about the extensive legal research; drafting of stipulations, briefs and concise statements; court appearances; and negotiations conducted by the Mother’s legal counsel as a direct result of the Father’s fraudulent concealment of his income increases.

A dissenting opinion filed by Judge Klein, however, may have the effect of limiting the majority’s ruling to its facts. Judge Klein wrote that he would have remanded for a more careful examination of the Mother’s legal fees, noting that the trial court found them to be excessive.

Post-Mortem Child Support

by bvertz on Jul 1, 2009 • Comments Closed • , , , , , , , ,

For decades, the law of Pennsylvania has been clear: the estate of a deceased parent has no obligation to pay child support for minor children in the absence of an agreement. In re Fessman Estate, 386 Pa. 447, 126 A.2d 676 (1956); Garney v. Estate of Hain, 653 A.2d 21 (Pa.Super.1995). Efforts to pass legislation that would impose a support duty upon the estates of deceased parents have failed.

In cases where a child support order was entered prior to the death of a parent, our Courts have been unwilling to continue the obligation after the parent’s death. Benson ex rel. Patterson v. Patterson, 782 A.2d 553 (Pa.Super.2001). The Superior Court’s decision in Benson, as in many other states, held that it would be an impermissible interference with the deceased parent’s testamentary wishes to impose an obligation not specifically agreed during the parent’s lifetime.

In March, the Superior Court of Pennsylvania considered Estate of Johnson, 970 A.2d 433 (Pa.Super.2009), a case in which a parent agreed to pay child support as part of a marital settlement agreement. The agreement specified that child support would terminate when the children were 18 years old, but it was silent as to whether it would end upon the death of the parent who was paying. The agreement also contained a standard clause specifying that the agreement would bind the estates, heirs, successors and assigns of the spouses.

Perhaps surprisingly, the Superior Court held that the child support provisions of the marital settlement agreement were binding upon the deceased parent’s estate, since the agreement did not explicitly terminate the obligation upon the parent’s death. The estate of the deceased parent argued that the surviving parent could have received life insurance proceeds if she had complied with other provisions of the agreement, and waived child support by failing to comply with the life insurance provisions. The Superior Court was unpersuaded, holding that the estate was liable for child support until the minor child was 18 year old.

Divorce Planning: Time to Defer Bonuses?

by bvertz on Jun 11, 2009 • Comments Closed • , , , , , , ,

Columnist Amy Feldman wrote an interesting article in this week’s Business Week entitled, “When to Take the Money.” June 30 is the deadline for executives to decide whether to defer this year’s performance bonuses to qualified plans. Ms. Feldman’s column suggests how to decide.