Division of Assets
Divorce & Division of Assets
While marriage is about the merging of two lives into one, divorce is about dividing up all the assets and property 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 how to divide your mutual assets and liabilities amongst yourselves, but this isn’t the reality for most couples. In cases where an agreement can’t be reached, divorcing couples will instead look to a mediator or the court to help distribute marital property.
Equitable Distribution
Maryland is known as an “equitable distribution” state, so when spouses can’t reach an agreement themselves about how to divide their property, the court distributes the assets 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?
Any marital property acquired by one or both parties that’s subject to equitable division in divorce. That includes:
- Houses, rental properties, vacation properties, and timeshares
- Cars, boats, and recreational vehicles
- Bank, investment, and brokerage accounts
- Personal property, collections, and firearms
- Shares in a family business
- Intellectual property rights
How Marital Property is Divided in Maryland
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:
- Determine whether property is marital, non-marital, or family-use personal property
- Assess the value of the property
- Apply the fairness principle to the division of property
Non-Marital Property
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 other contract
- Property directly covered under any of the above circumstances (for example, a boat purchased and maintained using inherited funds)
Management of Marital Debts in Maryland
In Maryland, a court typically can’t transfer the title of property or assign debts to someone who isn’t a party to the lending contract. Under this stipulation, each party will retain any debts held in his or her name alone, even if they were acquired for the benefit of the family. The court can, however, determine how monetary awards are allocated between parties. In some cases, monetary awards from marital property can offset family-related debts or titled property values held in one party’s name that cannot otherwise be divided, such as a car or boat.
Personal Property and 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”, therefore giving exclusive use and possession of that property to the spouse awarded custody of the children for up to three years.
Principles of Division
To reach an equitable division of marital property, the court must consider:
- Any monetary and non-monetary contributions made by each party
- Values of all property interests held by the spouses
- Economic standing of each party
- The cause of the parties’ estrangement
- Duration of the union
- Age of the parties involved
- Physical and mental fitness of each party
- Timing and circumstances surrounding the acquisition of retirement assets and family use personal property
- Any alimony award, family use personal property, or 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, a trusted legal team who can help you make rational, well-guided decisions is essential. After all, when it comes to writing your new happily ever after, the importance of finding strategic and compassionate counsel focused solely on family law cannot be understated. By combining our vast legal experience, our tenured team can design a tailored strategy to help you take back your power and build the new beginning you deserve.