By Nelson Garcia, Esq.
There are various common misunderstandings about the divorce process that can be labeled as “myths.” I will address here the two most common that I have encountered over the years by far.
Myth No. 1:
The most prevalent myth is that Courts split marital property 50-50. Maryland is called an “equitable distribution state” where the judge has a great deal of discretion in how to divide all marital property in a “fair and equitable fashion” based on the evidence that the attorneys present to the court and considering numerous statutory factors that must be analyzed one by one.
Equitable Distribution. The law and those statutory factors (described below) are essentially based on principles of fairness and equity. That means that among the many things that matter are why the divorce is occurring, the contributions of each party to the marriage, and whether one spouse needs more money or greater distribution property or its value because his or her earning potential is relatively limited.
Marital Property. In Maryland, all property obtained during the marriage is marital property, regardless of who paid for it, except for “Non-Marital Property” as defined below. Marital property can include real estate, bank accounts, stock, furniture, pensions and retirement assets, cars, and other personal property.
Non-Marital Property. Non-Marital Property includes property received by one spouse as a gift or an inheritance from a third party, or if the property is excluded by a valid agreement. Such property is considered non-marital or “separate” property. This Non-Marital Property also includes any property obtained before the marriage. It remains the property of the party who owned it before the marriage. Non-marital property remains non-marital as long as it is not gifted or titled to the other spouse.
Property acquired by the two of you during a period you lived together before marriage is not considered marital property. If the parties are divorced and one spouse wants to claim particular items as his or her own, the person must have proof that the property in question belongs to him or her alone.
Marital Settlement Agreement. Divorcing couples may choose to divide their marital property equally via a marital settlement agreement; but they should be mindful that if they do not reach an agreement, a Judge will do it for them and that could very well result in an unequal distribution.
The Court’s Role. If you and your ex-spouse cannot agree on how to divide your property, the court will decide that for you. The court first has to determine what is marital property, then how much that property is worth, and what is each party’s share of the property.
The Statutory Factors. In determining an “equitable” division of property, the Court must analyze each of the statutory factors (in Maryland Family Article, Section 8-205) which are as follows:
(1) the contributions, monetary and nonmonetary, of each party to the well-being of the family;
(2) the value of all property interests of each party;
(3) the economic circumstances of each party at the time the award is to be made;
(4) the circumstances that contributed to the estrangement of the parties;
(5) the duration of the marriage;
(6) the age of each party;
(7) the physical and mental condition of each party;
(8) how and when specific marital property or interest in property described in subsection (a)(2) of this section, was acquired, including the effort expended by each party in accumulating the marital property or the interest in property described in subsection (a)(2) of this section, or both;
(9) the contribution by either party of the property described in § 8-201(e)(3) of this subtitle to the acquisition of real property held by the parties as tenants by the entirety;
(10) any award of alimony and any award or other provision that the court has made concerning family use personal property or the family home; and
(11) any other factor that the court considers necessary or appropriate to consider to arrive at a fair and equitable monetary award or transfer of an interest in property described in subsection (a)(2) of this section, or both.
(c) Award reduced to judgment – The court may reduce to a judgment any monetary award made under this section, to the extent that any part of the award is due and owing.
Maryland Family Article, Section 8-205 also addresses: (1) the transfer of the interest in property and (2) if such a transfer of an interest in the property is not feasible to accomplish the desired result, the transfer of a monetary amount, called a “monetary award,” to the extent there are liquid marital assets to accomplish such.
Property that is Part Marital, and Part Non-marital. Some assets can be both marital and non-marital property.
A house that was purchased before the marriage is not marital property. However, when you and/or your spouse use marital funds to pay the mortgage, the house then becomes part marital and part non-marital. Real property that is held by “tenants by the entireties” is considered marital property unless you have a valid agreement to exclude it.
A married person may engage in business, make contracts, bring lawsuits, and be sued in his or her own name. Neither spouse is liable for contracts made by the other spouse in his or her name or for the debts the other spouse may have acquired before marriage.
Acquiring Joint Ownership after Marriage. A couple may acquire joint ownership in property brought to their marriage by either spouse through appropriate agreements or transfers of title. Non-marital property is protected from the debts of the other spouse. Each party has the power to dispose of property owned by him or her alone, as if unmarried.
Myth No. 2:
The second most prevalent myth I have found concerns marital fault and, particularly, that the court will greatly punish the party at fault and greatly reward the innocent party.
Marital Fault. The most common fault falling under this myth is Adultery. The second would be domestic violence. However, most people are shocked to find out that marital misconduct matters a lot less now than they expected. It used to be about 50-60+ years ago that such marital fault would result in such punishment and reward, for example, awarding the innocent party a much greater percentage of marital property or much greater Alimony beyond the aggrieved party’s actual needs. Now, with very few exceptions such fault is not much more than just a “checkmark” as the Judge complies with his/her responsibility to analyze each factor.
Other Important Factors
Length of Marriage. The length of your marriage is one of the most important factors that a Court must consider in the division of marital property as well as in determining Alimony/spousal support. For example, the non-monetary contributions of one party to the acquisition of property (see below) in a 2-3 year marriage will not weigh heavily at all versus such contributions in a 20-year marriage.
Standard of Living. Length of marriage is closely tied to Length of Marriage in that it has to do with how established individuals are in their particular standard of living; the longer the marriage, the more established they are.
Divorce laws regarding Length of Marriage and Standard of Living strive to ensure that both parties are protected against drastic financial change. In other words, what the length of marriage tells a judge, more than anything else, is how closely tied together spouses are and how difficult the split will be for the non-earning spouse or the lesser-earning spouse.
Monetary and Non-Monetary Contributions. The court can consider both the monetary and non-monetary contributions of each spouse to the marriage. Non-monetary contributions can include childcare, meal preparation, maintaining the home, etc.
Although courts in Maryland are given a great deal of discretion in marital awards/property distribution, generally speaking, they do try to end up with as close to a 50-50 split of assets as possible. However, the longer the marriage, the more likely it is that the Court may go beyond a simple 50/50 division of assets and instead award a greater portion of marital property to one of the spouses to place him or her in a similar financial position as the higher-earning spouse, and to ensure that both spouses enjoy relatively comparable standards of living post-divorce.
In a higher mid to long-term marriage, it is common for one spouse to have relied on the other spouse’s income and earning abilities to support a certain standard of living that would not be sustainable as a single person. In such cases, the court will often award the lower-earning spouse a higher percentage of the marital property to better equalize the standards of living of the parties post-divorce. Disproportionate awards of property are also common when there is a historical income disparity between the spouses. In a dissolution of a short-term marriage, the court is less likely to make a disproportionate award of jointly owned property and more likely to order an equal distribution of jointly owned assets. This is particularly true in cases where both parties were employed throughout the marriage.
A longer-term marriage can present more complex issues for the valuation and division of property. Couples who have been married for a lengthy period generally tend to have more property and more diverse property holdings or interests. This can include real estate investments, closely-held businesses or professional practices, employee stock options, and a variety of retirement and investment accounts.
The outcome of any divorce is highly dependent on the facts of the individual case and the specific financial circumstances of the parties. An experienced family law attorney can provide you with the sound advice you need to ensure that your case has a successful, equitable result.
If you have questions or need compassionate legal guidance regarding a divorce matter, please contact me, Nelson Garcia.
About Andalman & Flynn, P.C.: 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 http://www.andalmanflynn.com, or call 301.563.6685.