Property Division in a Maryland Divorce

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Property Division in a Maryland Divorce

To many involved in the separation and divorce process, the ultimate division of marital property by the Court upon divorce is the most confusing aspect of the process. The experienced family law attorneys at Trainor, Billman, Bennett & Milko, LLP can assist you in navigating the labyrinth of property division.

Marital Property vs. Non-Marital Property in Maryland

The most important consideration in a divorce with respect to property is whether or not it is “marital” property. Marital property is that property, however titled, acquired by one or both of the parties during the marriage. “Non-marital” property, on the other hand, is not subject to division in a divorce. Non-marital property is that property which:

  1. was acquired prior to marriage;
  2. was acquired by inheritance or gift from a third party;
  3. has been specifically excluded by valid agreement between the parties; or
  4. is directly traceable to any of these sources.

The various types of property at issue in separation and divorce may typically include real property, bank accounts and other types of accounts with money on deposit, personal property and furnishings, automobiles, retirement assets including pensions, and business interests.

Equitable Distribution

Maryland is what is generally referred to as an “equitable distribution” state. In essence, this means that the “equitable” division of property doesn’t necessarily mean “equal”. Nevertheless, while the Court is certainly empowered to hypothetically award one spouse a greater portion of marital property, the reality is that most Judges in Maryland are conservative in approach. Absent compelling and convincing circumstances, Judges usually opt for the simple solution as to a division of marital property: fifty-fifty (50%-50%).

The most important property division concept under Maryland law to grasp is that the Court cannot change title to property. There are limited exceptions to this rule, including certain retirement assets and, much more infrequently and under defined conditions, a jointly-titled family home and family use personal property. In practice, this means that if your spouse owns real property or holds a bank account in their sole name, and that asset was acquired in whole or in part with marital funds, the asset will remain the property of your spouse after divorce. The Court simply cannot award that individually titled asset – in whole or in part – to the non-titled spouse, since doing so would be to change title of the property, which the Court is generally prohibited from doing.

The method that the Court utilizes to remedy the inequity that may result in the division of marital property due to titling is a legal device called a “monetary award”. A monetary award is essentially a “judgment” against one party and in favor of the other for a certain sum of money, which is typically awarded to address the inequities that may result from the titling of marital property. A monetary award can be enforced in all the various ways that a money judgment can be enforced.

Monetary Award

Maryland law requires that the Court undertake a three-step process in a contested divorce case, which can culminate in a monetary award:

  1. the trial Court must characterize all of the property owned by the parties, however titled, as either marital or non-marital;
  2. the Court must then determine the value of all marital property; and
  3. the Court may then make a monetary award to one spouse as an adjustment of that party’s equities and rights in the marital property. In making a monetary award, and fashioning the amount and method of payment, the Court is also required to consider various statutory factors.
Division of Retirement Assets

The Court may divide retirement assets in divorce even though they are titled in the sole name of one party. Typically, a defined benefit retirement asset (such as a pension) may be divided subject to a specified formula and on an “as, if and when basis” – which means that a spouse may receive their fractional share of the other spouse’s pension by direct monthly payment at the time that the other spouse retires, and generally not at the time of divorce. On the other hand, defined contribution retirement accounts (such as 401(k)s and IRAs) may typically be valued and divided at the time of divorce. Many retirement plans require the submission of exacting and specific Court Orders commonly referred to as either “QDROS” (Qualified Domestic Relations Orders) or Retirement Benefits Order. These Orders are prepared by counsel and signed by the Court for submission to retirement Plan Administrators at the time of divorce or shortly thereafter.

Dissipation of Marital Property

Finally, there may be circumstances in which a spouse has unreasonably expended or “dissipated” marital funds during the marriage, at the time of separation, or during the course of divorce proceedings. Dissipation of marital funds typically occurs in the circumstance where one spouse improperly expends or depletes marital property, depriving the other spouse of his or her share of the marital property, or so as to exclude that property from consideration in the marital property/monetary award process. If dissipation of marital property is established at the time of trial, the Court may factor the value of the dissipated property back into the total marital property pot for purposes of its monetary award determination.

Marital Property Division is Complicated. Let Us Help You Get Your Fair Share.

Our divorce lawyers work with clients in Anne Arundel County and throughout Maryland to achieve a fair division in all forms of marital property – including retirement assets, marital funds, and other marital property. We will work hard to ensure that you get your fair share via negotiation or litigation if necessary. To schedule an initial consultation to discuss your divorce case with one of our seasoned property division lawyers, call 410-280-1700 or contact us online. The offices of Trainor, Billman, Bennett & Milko, LLP are conveniently located in downtown Annapolis.

Property Division in a Maryland Divorce

To many involved in the separation and divorce process, the ultimate division of marital property by the Court upon divorce is the most confusing aspect of the process. The experienced family law attorneys at Trainor, Billman, Bennett & Milko, LLP can assist you in navigating the labyrinth of property division.

Marital Property vs. Non-Marital Property in Maryland

The most important consideration in a divorce with respect to property is whether or not it is “marital” property. Marital property is that property, however titled, acquired by one or both of the parties during the marriage. “Non-marital” property, on the other hand, is not subject to division in a divorce. Non-marital property is that property which:

  1. was acquired prior to marriage;
  2. was acquired by inheritance or gift from a third party;
  3. has been specifically excluded by valid agreement between the parties; or
  4. is directly traceable to any of these sources.

The various types of property at issue in separation and divorce may typically include real property, bank accounts and other types of accounts with money on deposit, personal property and furnishings, automobiles, retirement assets including pensions, and business interests.

Equitable Distribution

Maryland is what is generally referred to as an “equitable distribution” state. In essence, this means that the “equitable” division of property doesn’t necessarily mean “equal”. Nevertheless, while the Court is certainly empowered to hypothetically award one spouse a greater portion of marital property, the reality is that most Judges in Maryland are conservative in approach. Absent compelling and convincing circumstances, Judges usually opt for the simple solution as to a division of marital property: fifty-fifty (50%-50%).

The most important property division concept under Maryland law to grasp is that the Court cannot change title to property. There are limited exceptions to this rule, including certain retirement assets and, much more infrequently and under defined conditions, a jointly-titled family home and family use personal property. In practice, this means that if your spouse owns real property or holds a bank account in their sole name, and that asset was acquired in whole or in part with marital funds, the asset will remain the property of your spouse after divorce. The Court simply cannot award that individually titled asset – in whole or in part – to the non-titled spouse, since doing so would be to change title of the property, which the Court is generally prohibited from doing.

The method that the Court utilizes to remedy the inequity that may result in the division of marital property due to titling is a legal device called a “monetary award”. A monetary award is essentially a “judgment” against one party and in favor of the other for a certain sum of money, which is typically awarded to address the inequities that may result from the titling of marital property. A monetary award can be enforced in all the various ways that a money judgment can be enforced.

Monetary Award

Maryland law requires that the Court undertake a three-step process in a contested divorce case, which can culminate in a monetary award:

  1. the trial Court must characterize all of the property owned by the parties, however titled, as either marital or non-marital;
  2. the Court must then determine the value of all marital property; and
  3. the Court may then make a monetary award to one spouse as an adjustment of that party’s equities and rights in the marital property. In making a monetary award, and fashioning the amount and method of payment, the Court is also required to consider various statutory factors.
Division of Retirement Assets

The Court may divide retirement assets in divorce even though they are titled in the sole name of one party. Typically, a defined benefit retirement asset (such as a pension) may be divided subject to a specified formula and on an “as, if and when basis” – which means that a spouse may receive their fractional share of the other spouse’s pension by direct monthly payment at the time that the other spouse retires, and generally not at the time of divorce. On the other hand, defined contribution retirement accounts (such as 401(k)s and IRAs) may typically be valued and divided at the time of divorce. Many retirement plans require the submission of exacting and specific Court Orders commonly referred to as either “QDROS” (Qualified Domestic Relations Orders) or Retirement Benefits Order. These Orders are prepared by counsel and signed by the Court for submission to retirement Plan Administrators at the time of divorce or shortly thereafter.

Dissipation of Marital Property

Finally, there may be circumstances in which a spouse has unreasonably expended or “dissipated” marital funds during the marriage, at the time of separation, or during the course of divorce proceedings. Dissipation of marital funds typically occurs in the circumstance where one spouse improperly expends or depletes marital property, depriving the other spouse of his or her share of the marital property, or so as to exclude that property from consideration in the marital property/monetary award process. If dissipation of marital property is established at the time of trial, the Court may factor the value of the dissipated property back into the total marital property pot for purposes of its monetary award determination.

Marital Property Division is Complicated. Let Us Help You Get Your Fair Share.

Our divorce lawyers work with clients in Anne Arundel County and throughout Maryland to achieve a fair division in all forms of marital property – including retirement assets, marital funds, and other marital property. We will work hard to ensure that you get your fair share via negotiation or litigation if necessary. To schedule an initial consultation to discuss your divorce case with one of our seasoned property division lawyers, call 410-280-1700 or contact us online. The offices of Trainor, Billman, Bennett & Milko, LLP are conveniently located in downtown Annapolis.

How Can We Help You?