Division of Assets
Dividing Assets in Divorce
While marriage is about the merging of two lives into one, divorce is about dividing up all the assets, marital property, separate property, marital funds, real property, and even community debt or student debt accumulated during the union. Fittingly, the division of marital assets is one of the most important—and contentious—matters you’ll face when it comes to divorce since your financial standing can fundamentally shape the next chapter of your life. In a perfect world, you and your spouse will agree on dividing assets in divorce amongst yourselves, but this isn’t the reality for most spouses. In cases where an agreement can’t be reached, divorcing couples will instead look to a mediator or attorney for representation court to help distribute marital property.
Equitable Distribution
Maryland law adopts the concept of “equitable distribution,” so when spouses can’t reach an agreement themselves about how to divide their property, the court distributes the marital property between them in an equitable (not equal) fashion. The key difference between these two terms? The court will always divide marital assets reasonably, but that doesn’t necessarily mean they’ll be distributed equally.
What Is Marital Property in Maryland?
Marital property under Maryland's Marital Property Act is property acquired by one or both spouses that’s subject to equitable property division in divorce. That includes:
- Houses, rental properties, vacation properties, and timeshares
- Cars, boats, and recreational vehicles
- Bank, investment, and brokerage accounts
- Personal property, real property, collections, and firearms
- Shares in a family business
- Intellectual property rights
- Personal property, including furniture, household items, jewelry, tools, etc.
How Marital Property is Divided Under Maryland Law
Maryland's Marital Property Act doesn’t require judges to divide property right down the middle but rather in a way that’s equitable when considering all the circumstances at play. Maryland property division laws empower judges to do the following:
- Determine whether the property is marital, non-marital, or family-use personal property
- Assess the value of the property
- Apply the equitable distribution principle to the division of property
Non-Marital Property
When it comes to dividing assets in divorce, non-marital property (also called separate property) must fit into one of the following non-marital categories:
- Property acquired prior to the marriage
- Gifts or inheritance (even those received during the marriage)
- Property excluded by a valid prenuptial agreement, postnuptial agreement, or another contract
- Property directly covered under any of the above circumstances (for example, a boat purchased and maintained using inherited funds)
The Division of Marital Debts Under Maryland Law
When a married couple in Maryland decides to divorce, the division of marital debts is one of the most important considerations that must be taken into account. Maryland's Marital Property Act provides for the division of marital debts, as well as for the division of marital property. The division of marital debts and assets is generally accomplished through the court’s award of a divorce decree. The division of marital debts is determined by a few factors. First, it depends on whether the debt was incurred before or after the marriage or during the marriage. Generally, debts incurred before the marriage, such as student debt, are not subject to division, while those incurred during the marriage, such as community debt, are. It's vital to note that debts incurred during the marriage can include both joint and individual debts.
In addition to dividing assets in divorce and the general division of marital debts, state law also recognizes different types of marital debts that may be assigned to a spouse in a divorce. These include alimony debts, which are debts incurred to support a spouse during the marriage, and child support debts, which are debts incurred to support minor children of the marriage. These debts are typically awarded to the paying spouse, who is responsible for fulfilling the obligations of the debt.
The Division of the Family Home
Children need a stable home environment, especially during divorce. To provide that consistency, Maryland divorce judges can designate certain property as “family-use personal property” or as a “family home." When it comes to dividing real estate during a divorce, the family home is typically the most valuable asset. It's also often the most emotional and important asset for a family. When it comes to determining what will happen to the family home during a divorce, the court may consider a variety of factors, such as the length of the marriage, the financial contributions of each spouse, the age of the spouses, and any other special circumstances. When considering how to divide the family home, the court will look at the financial contributions of each spouse during the marriage. This means that the court will consider who paid for the mortgage, taxes, insurance, and other costs associated with the home. The court will also look at any equity that has been built up in the home, and how that equity should be divided.
Principles of Division
To reach an equitable decision on dividing assets in divorce, the court must consider:
- Any monetary and non-monetary contributions made by each party
- Values of all property interests held by the spouses
- The economic standing of each spouse
- The cause of the parties’ estrangement
- Duration of the union
- Age of the parties involved
- The physical and mental fitness of each spouse
- Timing and circumstances surrounding the acquisition of retirement assets and family-use personal property
- Any monetary award, family-use personal property, and family home awards
- Any other factor that the court deems necessary or appropriate in arriving at an equitable monetary award
If your case goes to trial, the court will apply each of these factors to create an equitable determination, although the actual division may not always feel fair to one or both parties.
Finding the Right Asset Division Attorney for You
As you navigate this challenging time, our trusted family law legal team can offer legal advice and help you make rational, well-guided decisions.After all, when it comes to writing your new happily ever after, the importance of finding strategic and compassionate attorneys focused solely on family law cannot be understated. By combining our vast legal experience and negotiation skills, our tenured team can design a tailored strategy to help you take back your power and build the new beginning you deserve.