Equitable Distribution in Maryland
Maryland is an equitable distribution state, meaning the court has the authority to divide property in an “equitable” fashion, or in a way that it determines is fair to both spouses. While often the division is equal or 50/50, it doesn’t have to be that way. In Maryland, all property owned by both spouses is subject to division during divorce proceedings.
Equitable Distribution is a Three-Step Process
During a divorce in Maryland, the court will use a three-step process to decide how best to equitably divide property between you and your spouse:
The court will first decide what property owned by you and your spouse, whether titled in your name, your spouse's name, or in both of your names, is marital property;
Next, the court will determine the value of each piece of marital property;
Finally, the court will dividing the value of the entire marital estate through a number of methods, including monetary awards and transferring an interest in a real estate property.
Step 1: Deciding What Property is Marital Property
Marital property is defined as: (a) any property acquired by one or both parties during the marriage, from the date of the marriage to the date of divorce, unless that property was acquired by an inheritance or gift from a third party, or is excluded by valid agreement; (b) real property titled as tenants by the entirety, unless excluded by a valid agreement. Separate property is anything that was acquired before the marriage or by an inheritance or gift, or is directly traceable to any of those sources.
As a general rule, with the exceptions listed above, anything that was acquired during the marriage is marital property. This can include houses, cars, retirement accounts, private and military pensions, 401(k) plans, Thrift Savings Plans (TSP), other bank and investment accounts, businesses, furniture and household items, pets, etc.
Commingling property is property that is part marital and part separate, including property that either you or your spouse acquired before the marriage but contributed to during the marriage. For example, if you bought a house before your marriage, but you paid down the mortgage and increased the equity during the marriage, then this house would be part marital and part separate.
Determining marital and separate allocations of funds can be extremely complicated and is much easier with the help of a divorce attorney in Maryland.
Step 2: Valuing the Marital Property
The second step is to determine the value of each and every piece of marital property. Every piece of furniture, all retirement asset, any business holdings, and every bank account must be valued. The responsibility falls upon you and your spouse, and your respective lawyers, to present evidence of value. The importance of appraisers and actuaries and original financial documents cannot be understated when it comes to determining the value of marital property.
Step 3: The Monetary Award or Division of Property
The third step is to make sure that you and your spouse each get the appropriate or fair amount of marital property. Invariably, one of you will have more marital property than the other spouse because of title. Title does not keep property off the table, but it is more likely that the spouse with title to more of the property will be writing a check to the spouse with less property. This is accomplished through a monetary or financial award. A monetary award is a cash award which you or your spouse pays to the other to ensure that both of you walk away from the divorce with the right amount of property.
What About Debt in a Maryland Divorce?
The court in Maryland cannot divide debts between spouses in a divorce. In other words, you can’t be held liable for your spouse’s individual debts, and your spouse can’t be held liable for your individual debts. You and your spouse are jointly liable for debts in your joint names, but the court can’t require either one of you to pay them.
Debts of you and your spouse will nonetheless be considered by the court as a factor when determining the amount of any monetary award to either spouse. When making a monetary award, the court must consider as one of several factors each of your economic circumstances at the time of the award, including all income, expenses, assets and liabilities. Even if those debts are non-marital or unrelated to the acquisition of marital property, the debts will be considered by the court upon divorce to determine what is a fair and equitable monetary award under your circumstances.
Equitable Distribution Factors in Maryland
According to Section 8-205 of the Maryland Code Family Law Article, the court in a Maryland divorce must consider various factors in making an equitable distribution of marital property. In many cases, the court applies these factors and attempts to make a 50/50 split, although the court may also decide upon any other division of property (60/40, 55/45, etc.).
If you choose litigation to resolve your property division case, the court will consider the following:
the value of all property owned by both you and your spouse;
how and when the property was acquired;
the age of both you and your spouse;
how long you were married;
the monetary and non-monetary contributions of you and your spouse to the well-being of the family;
the circumstances leading to the breakdown of your marriage;
any alimony being awarded to either you or your spouse;
the economic circumstances of both parties;
the mental and physical condition of both parties;
any other factor relevant to a fair division of property.
Contact a Wayside Legal Equitable Distribution Attorney
During your Maryland divorce and property division case, it’s important to have a lawyer who understands the intricacies of divorce law. At Wayside Legal LLC, we have years of experience working in the divorce field. We’ll be able to answer all of your property division questions, and we’ll be able to advise you on the best ways to move forward on your case. If you have more questions about divorce and equitable distribution in Maryland, call us at (301) 603-3480 or contact Wayside Legal today.