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Bifurcation: Divorce First, Divide Property Later
In most divorces in Pennsylvania, the parties settle the property issues before a Divorce Decree is granted. The reason for this, from the Court’s perspective, is simple: once the Divorce Decree is signed, there is no pressure or incentive on the parties to then resolve the division of property issues, the alimony issues and the like.
Sometimes, there can be acceptable reasons for the Court to allow the parties to Divorce first and divide property later. This process is called Bifurcation. Historically, it has been difficult to convince a Judge to bifurcate a Divorce proceeding. That may be changing.
There are several hoops to jump through, however, in order attempt to convince a Judge to grant bifurcation. The following three-pronged test must be satisfied:
- The grounds for Divorce must be established;
- Compelling circumstances must exist for entry of a Divorce Decree; and
- Sufficient economic protections must be in place for the other party while the remaining claims are pending.
The Bonawits case is the leading Pennsylvania case which provides guidelines for what constitutes “compelling circumstances” and “sufficient economic protections”. In this case, the parties placed a Marital Settlement Agreement (“MSA”) on the record in the Divorce proceeding in September 2004. In January 2005, Wife retained an new attorney, who believed that the Agreement was invalid. As such, Wife was not willing to proceed to finalize the Divorce. However, it appears that substantial property had been divided by the parties between September 2004 and January 2005.
Husband wanted to bifurcate and move on with his life; Wife did not agree with bifurcating the divorce. Husband thereafter filed a Petition to Bifurcate with the Court.
The Court granted the bifurcation. The Court found that the compelling circumstances, required for bifurcation, included that the parties had lived separate and apart for over four years, the Wife had significant assets transferred to her under the MSA, the parties could get on with their lives, and the possible tax advantages to filing separately. Also, the Court found that since Husband had transferred $250,000.00 in cash to Wife under the MSA, she was sufficiently protected.
Note: This is a very unusual case. It is rare for an MSA to be signed by the parties, and after it is signed, another attorney comes into the case and raises the validity of the MSA. It is also rare that asset distribution would occur before a Divorce Decree is granted. I would be constrained to advise a client to rely on this case in the average divorce, where assets are generally not transferred to each party until after the Divorce Decree is entered.
In Chipley, another Pennsylvania matter, which is not an appellate case so it cannot be relied upon, bifurcation was granted. The wife testified that the Husband was in prison, many of the marital assets had already been divided or disposed of including the marital home and there was no spousal support or alimony pendente lite being paid to either party. Finally, the Wife did not have health insurance but could obtain health insurance if she was able to marry her current paramour.
Analysis: While these cases illustrate that bifurcating a Divorce is certainly possible, each case must be carefully analyzed to assess whether it is an appropriate case for bifurcation. Many Judges remain reluctant to grant bifurcation, because once the Divorce Decree is signed, there is little motivation, by many people, to then address the property issues.