MARYLAND FAMILY LAW: EQUITABLE PROPERTY DISTRIBUTION IN DIVORCE
Maryland property division in divorce is based on equity.
Anyone in Maryland facing divorce is rightly concerned about how property will be distributed. Suddenly a nest egg that was meant to provide for one household will have to provide enough for two households, while still paying the costs of raising the children, if any.
Property determinations in Maryland ask: what distribution will be equitable for the parties? Determining equitable distribution is a question of fairness with flexibility to accommodate the particular family situation; it does not necessarily mean a 50-50 split based on value.
NEGOTIATE OR ADJUDICATE
Many couples will be able to negotiate the division of their property as part of a marital settlement agreement, a process in which it is advantageous for both to be represented by seasoned Maryland family lawyers. A couple that cannot agree on who gets what is subject to the discretion of the judge in the divorce.
MARITAL VERSUS NONMARITAL
Maryland law grants considerable power and flexibility to the judge deciding property matters in a divorce. Property distribution is based first on title and next on the classification of all property acquired during the marriage as marital or nonmarital.
Broadly, property “acquired by one or both parties during the marriage” is generally considered marital.
These property classifications are nonmarital:
- That which was acquired before marriage
- That which was given to a spouse by a third person as a gift or inheritance
- That which is “excluded by valid agreement” like an enforceable prenuptial agreement
- That which can be directly traced to any of these nonmarital sources
First, the judge must determine how each item of property is titled; then he or she must decide when each item of property was acquired and the source of acquisition i.e., whether the property is marital or nonmarital; and its value (under certain circumstances retirement assets may not need to be valued). State court rules require a divorcing couple with a property dispute file in court a joint statement of marital and nonmarital property. This detailed, comprehensive statement enumerates all items of marital and nonmarital property, along with title information, valuation, and outstanding liens or debt incurred to acquire that item of property.
The judge may “resolve any dispute” between the divorcing spouses involving ownership of personal property (tangible, movable items like furniture, household goods and so on) and real property (real estate, land, buildings, residences and so on).
Once the property is classified as marital or nonmarital and values are assigned, the judge may adjust the parties’ “equities and rights” in property by means of a monetary award. In doing so, the judge has flexible power to, in limited instances, transfer ownership or otherwise make a monetary award, regardless of whether alimony or spousal support is awarded. In fashioning the equitable distribution order, the judge is required by law to consider each of 11 specific statutory factors.
The factors include property interests of each, economic circumstances of each, length of marriage, ages and health of each, and more. Interestingly, the judge must consider some subjective things like contributions to the family’s well-being both monetary and nonmonetary, as well as “the circumstances that contributed to the estrangement of the parties.”
FAMILY HOME AND RELATED PERSONAL PROPERTY
Subject to certain restrictions, the judge can order use of and financial responsibility for the family home (owned or leased) and “family use personal property” (cars, household furniture, appliances and so on) to one or both parties, considering the best interests of children and the parties, including the need to use the property to produce income, and hardship. This order may last up to three years or until remarriage of a party in possession.
SEEK LEGAL ADVICE
This article introduces Maryland property distribution law, but any Marylander facing divorce should contact an experienced divorce attorney for advice and representation.
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