By Mary Ellen Flynn, Esq., 301.563.6685
In Maryland, all assets and property acquired during a marriage can be considered marital property regardless of how the property is titled. This can include real property, bank accounts, retirement and pensions, household furnishings, and vehicles. Clients often have the misconception that if they have an individual checking account solely in their name, that checking account is not considered marital property. However, that is not the law in Maryland. Even if an account is individually titled, any money held in the account during the marriage can be deemed marital property.
Only property that was acquired before your marriage or acquired by one spouse during the marriage by gift or inheritance is considered non-marital property. Even then, if a spouse co-mingles the gift or inheritance with a joint checking account, the once non-marital property now becomes marital and is subject to division.
With retirement accounts, if a spouse has contributed to a retirement account before marriage, then that pre-marriage balance plus investment performance on that pre-marriage balance is deemed non-marital property. Only amounts contributed to the retirement account during the marriage and investment performance on that portion are considered marital property and subject to division.
So how do Maryland courts divide marital property? Maryland is an equitable distribution state. If a court is required to decide how to divide marital assets, the court has several factors they must consider in making a determination such as:
- The contributions that each spouse made to the marriage. A judge will consider if one spouse has been the primary caregiver of the children while the other spouse was the breadwinner.
- The value of all property of each party, which will include any non-marital property that one spouse may have at their disposal.
- The economic circumstances of each party. The court does not want one spouse to be left financially ruined.
- Misconduct that led to the estrangement of the parties. If one spouse is the cause of the dissolution of the marriage, the judge can consider that. However, this does not mean that your cheating spouse will be left with nothing. The reason the marriage ended is only one of several factors a judge will consider, so while it does have an impact, it is not the only consideration.
- The duration of the marriage.
- The age and physical or mental condition of each of the parties. If one spouse requires schooling or training to be able to re-enter the workforce, a judge can make accommodations to allow that spouse to do what is needed to re-enter the workforce.
- How the marital property was acquired. The court will consider when the marital property was purchased and what efforts each party expended to purchase the property.
- The amount of alimony awarded. The court will also consider how much use of the family home or family personal property one spouse has.
Just like there is marital property, there is also marital debt. Marital debts are any debts that are incurred to acquire property, such as mortgages and car loans. The court will award an equitable division of the marital debt, but remember that equitable does not mean equal. Also, the creditor can always pursue both spouses if both spouses were co-borrowers regardless of what a court orders.
There are times when one spouse uses marital property for his or her own benefit for reasons unrelated to the marriage. This is referred to as dissipating marital funds. Some examples can include one spouse hiding or using money to fund their extramarital affair. In preparation for divorce, one spouse may purposely withdraw all money from the joint bank account and move it into an individual bank account. While the spouse thinks that they are gaining the upper hand, they are not. Purposely dissipating marital funds or preventing your spouse from being able to pay for food or shelter, especially if children are involved, will have a negative impact on your case and can be cause for an emergency hearing, with you being left paying the legal fees for the emergency hearing.
Dividing marital assets and debts can be complicated but not impossible. It is best to have legal counsel who can give you the legal advice needed to navigate the division of assets and who can also give you the insight necessary to understand what your new financial situation will be once divorced.
Andalman & Flynn, P.C. serves clients throughout Maryland and the District of Columbia, offering compassionate, quality service and results-driven representation across a broad range of legal areas. With a concentration on disability benefits law and family law, the firm focuses on cases that impact the rights of everyone, and they are there for clients when responsive legal help is most critical. For more information about Andalman & Flynn, please visit our website or call 301.563.6685.