The division of marital property during a Maryland divorce is often one of the most hotly-contested and vexatious issues when couples break up.
Marital property is property acquired by one or both of the spouses over the course of the marriage. It does not matter which party paid for it. It can include real estate, personal property, retirement accounts and bank accounts. Some property is not classified as marital property meaning it is not touched during a divorce in Maryland. The definitions of the family home and family use personal property is defined under Maryland law.
Property that was not acquired over the course of a marriage is defined as “non-marital property.” It remains with its owner in the divorce settlement.
How is Marital Property Distributed?
In Maryland, marital property isn’t always split right down the middle. Maryland is an equitable distribution state which means the divorce court will seek to divide property fairly between the spouses. Fairly does not always mean equally.
Unlike some states, Maryland is not a “community property” state.
In community property states, marital property is considered part of the “community” and is typically split 50/50 during divorce.
What is Non-Marital Property?
Non-Marital Property is any possessions or property obtained before the marriage. It remains the property of the party who owned it prior to the marriage. Non-marital property remains as such as long as it is not titled or gifted to the other spouse.
When property is received by the spouse by gift or inheritance during the marriage from a third party it remains the non-marital property of that spouse unless it is gifted to the other spouse.
Property excluded by valid agreement such as in a prenuptial agreement drawn up before a marriage, will typically remain non-marital property if the agreement is valid.
If one of the spouses wants to claim particular items as his or her own during a divorce, the claimant must have proof that the property belongs solely to him or her. Often a couple may acquire joint ownership in property brought to their marriage by either spouse through agreements or transfers of title.
Non-marital property may not be used to cover the debts of the other spouse. Each party has the power to dispose of solely owned property as if unmarried.
When a married person engages in business activities, enters contracts, brings lawsuits or is sued in his or her own name, that spouse is typically solely responsible. Neither spouse can be liable for contracts drawn up by the other spouse in their name or for debts the other spouse incurred before entering the marriage.
Property that is Part Marital and Part Non-Marital
There are assets that may be classified as marital and non-marital property. A residence that was bought before a marriage is not marital property. However, if you or your partner uses marital funds to pay the mortgage after you are married, the house transitions to part marital and part non-marital. The decision on its classification depends on the source of the funds.
A house bought by one spouse before a marriage would start out entirely as non-marital property. However, when mortgage payments are made out of marital funds during the marriage, the property becomes partially-marital.
Do Title Papers Affect the Classification of Property During a Maryland Divorce?
The mere fact your name is on a title paper does not determine whether property is marital property or non-marital property. Real property the spouses own as tenants by the entirety is considered marital. The divorce court may order jointly titled real or personal property to be sold and the proceeds to be divided. The divorce court does not have the power to transfer title ownership of property, except for retirement, pension, profit sharing, or deferred compensation.
Disposing of Marital Property During a Divorce
If one of the spouses uses or spends marital property during a divorce action, the court may still consider that property in the equation. This is known as dissipation or wasting property. For example, a spouse with a gambling addiction may use joint savings that should be considered in the divorce settlement.
If the court finds that one spouse’s dissipation of assets was serious enough to constitute fraud, it looks at the wasted property as if it still existed when dividing the marital property. The rule is intended to prevent either spouse from using marital assets to take them out of a future settlement.
What Happens to Non-Marital Property During a Maryland Divorce?
Our Maryland divorce attorneys are occasionally asked what happens to non-marital property during the dissolution of marriage in Maryland. Typically, nothing happens. The spouse who owns non-marital property keeps it.
However, the non-marital property is taken into consideration. In deciding on a monetary award as well as on alimony, a Maryland court should consider all the resources and overall financial circumstances of both parties. This includes their non-marital property. If one spouse is ordered to pay a monetary award, the other spouse may go after non-marital property to collect it.
Monetary Awards in Maryland Divorces
The court may order one spouse to pay a monetary award to the other to ensure what each spouse takes from the marriage is fair under all the circumstances of the case. Often a Maryland divorce court will order a spouse who has been awarded the family home to pay money to the other, especially when the home represents a large portion of the couple’s marital assets.
Does Maryland Have a Standard Formula for Dividing Property During a Divorce?
The court does not have a standard formula for dividing property or for making a monetary award. However, it will weigh up a number of factors in Maryland marital property division, primarily:
- The financial circumstances of each spouse;
- What each spouse contributed financially and otherwise to the family;
- How long the marriage lasted;
- The ages and physical and mental health of the spouses;
- How they acquired the assets;
- The contribution made by either party to the acquisition of real property held by the parties as tenants by the entirety;
- Whether either of the spouses was awarded alimony or given the family home;
- Whether either spouse committed marital misconduct that led to the divorce.
- Any other factor considered appropriate by the court.
Why Alimony May Affect a Monetary Award Made During Divorce
When one of the spouses is receiving alimony it may impact a monetary award made during the division of property. The courts have found both issues are related. Although a monetary award is not a substitute for alimony, the two factors must be considered together.
Division of Marital Debts
The divorce court will consider marital debts as well as assets during a divorce settlement. A marital debt is a debt linked to the acquisition of marital property. One of the most common forms of marital debts is a mortgage payment. When a couple makes mortgage payments from a joint bank account, the mortgage is considered a marital debt.
Can One Spouse be Held Liable for the Other’s Marital Debts?
In Maryland, you cannot be held responsible for the debts or actions of your spouse that arose before you were married. There is no responsibility to carry a contract made only in your spouse’s name. This includes all debts and expenses your spouse incurred solely. You are not held responsible for loans you made solely to your spouse, for credit card debts if the cards in question are only in your spouse’s name, or medical bills for services provided to your spouse.
A court may not require one spouse to pay the sole debt of the other, or to satisfy joint obligations like mortgages and taxes on real estate.
However, when one parent gets use and possession of a piece of property like a home or a car, the court can order the other to contribute to the mortgage or a car payment.
What is a Use and Possession Award in Maryland?
The court may award the spouse with custody of the couple’s minor child or children, use and possession of the family home or other items like a car, home appliances, and furnishings. The court considers the best interests of the child, the interests of each party and any hardship related to the party whose rights would be infringed.
The courts in Maryland can give one spouse the exclusive right to live in the family home for up to three years following the divorce. The home must have been the parties’ main residence during the marriage or be leased and owned by one of the parties and at least one child as a home post-divorce.
When a use and possession award is made, the parent living in the family home does not need to have custody of all the couple’s children. However, he or she must be a designated custodial parent of at least one child of the marriage.
Unless the parties agree otherwise, their exclusive use and possession order will terminate if the spouse inhabiting the family home gets remarried or when the youngest child in the residence turns 18.
Parties benefitting from a use and possession award must be sure they can afford to live in the home.
A use and possession award can include an order to pay expenses such as mortgage, the rent or the payments on other debt related to the property in question.
Exclusive Possession of a Home in Abuse Cases
Maryland law gives the courts the power to order a spouse to leave the family home for up 12 months by issuing a protective order in domestic violence situations.
Given the urgency of the situation, the protective order process is a fast one. Parties seeking an order can file for an application for a temporary protection order which is typically scheduled for a hearing on the same day as filing.
The hearing progresses without the other spouse being present or even aware of the hearing. If the court grants the temporary order, the case moves on to the “Final Protective Order” stage, which is scheduled for a hearing in the span of seven days. If the court rules in your favor, it can grant you exclusive possession and use of the family home for up to 12 months.
Contact an Experienced Maryland Marital Property Attorney
The classification and division of property during a divorce in Maryland is a complex issue and the cause of many protracted legal tussles. To ensure you don’t miss out on property you are entitled to you should contact a Maryland family lawyer. Call us at (410) 694-7291.