Division of property is often one of the most contentious issues in a divorce. It is frequently depicted humorously in TV shows and movies, but dividing up your marital assets in real life is no laughing matter, especially if those assets are significant or complex.
Division of your marital estate has a significant impact on the next chapter of your life. Ideally, you and your spouse will agree and determine how to divide assets and liabilities accumulated during your marriage. However, if an agreement cannot be reached, then the court will determine how to distribute marital property.
Maryland is an “equitable distribution” state. This means that if spouses do not reach an agreement on their own as to how to divide their property, the court will distribute assets between them in an equitable fashion. The term “equitable” means that the court will do what it believes to be fair, but marital property need not be distributed equally.
There are three steps to the court’s distribution of marital property in Maryland.
First, the court must determine what property is marital property. Non-marital, or separate property, belongs to the individual spouse and is not subject to distribution in divorce. Generally, marital property consists of real property (such as the marital home) held as tenants by the entirety and any property acquired by one or both parties during the marriage, unless otherwise characterized as separate property.
Separate property is property acquired by either spouse prior to the marriage; property one spouse acquired by inheritance or gift from a third party; property excluded by valid agreement, such as a prenuptial agreement; or any property directly traceable to any of those sources. This is a simplified explanation, as some property can be partly marital and partly separate. Property that was originally separate can also become marital under some circumstances, and the growth or appreciation in value of separate property can be marital under certain circumstances. Advice from an experienced family law attorney is essential in understanding how a particular asset is likely to be treated in court.
Marital property may include such items as:
The second step in marital property division is for the court to determine the value of all property of the parties. With some assets, like a bank account, this process is straightforward. With other types of assets, such as a closely-held business, the value may be difficult to ascertain and is often hotly contested.
Once the court has identified all marital property and determined its worth, the third step is to determine how those assets should be equitably distributed between the parties. In this analysis, the court must consider a list of factors set out by law to decide what is fair. While fault on the part of one or both parties in the breakdown of the marriage is a factor to be considered by the court, it is only one factor. The court must also assess a host of other factors. Case law indicates that no specific factor is more important than any other, that each case is different, and that the relative weight of each factor depends on the facts and circumstances of each individual case.
The Family Law Article of the Maryland Code §8-205 sets forth the factors the court must consider when deciding how to make an equitable distribution of marital property. These factors include the length of the marriage, the age of each party, the value of each party’s property interests, whether alimony was awarded, the physical and mental condition of the parties, and whether either spouse was at fault for the breakdown of the marriage.
For instance, in a marriage of brief duration, the court might restore the spouses to the financial position each was in before the marriage occurred. If one spouse had an affair and spent significant marital assets on the affair partner, or otherwise wasted marital property on improper purposes, the injured spouse might receive a larger share of the property. However, the court has substantial discretion and need not make any such award.
A Maryland court may consider any factor it deems necessary and appropriate to arrive at an equitable distribution of property. However, the best way to achieve a mutually acceptable resolution is for the couple to reach an agreement themselves, with the help of their attorneys, if necessary. No court can know or understand the needs and preferences of a divorcing couple like the couple themselves. If a couple is properly supported during negotiations, they can often come up with a division of property that is more creative and satisfactory than any a judge would be able to craft.
An experienced, effective attorney may be able to help you reach a much more favorable division of marital property than you would otherwise achieve on your own. As part of this calculation, you should consider your attorney’s fees in divorce as an investment in the outcome of your case, and the rest of your life, rather than as a discretionary expense.
At Strickler, Platnick & Hatfield, we have decades of experience in the most challenging and complex Maryland marital property matters, including those involving hidden assets, business interests, assets in other countries, extensive and complex assets, and more. We approach these matters with tactical precision and creative insight to protect your interests. We advise you with your specific goals and overall financial objectives in mind.
Many opportunities exist to secure an advantage in the division of marital property: excluding certain property from the category of marital property (or making sure it is included); achieving a favorable valuation of a particular asset; helping the court conclude that it would be fair for our client to receive a greater share of marital assets are but some examples. We are relentless in identifying and pursuing every opportunity to improve our client’s position.
We recognize the merit of reaching a mutually agreed-upon property settlement, and we offer our clients a variety of dispute resolution options to help them do just that. As skilled litigators, however, we will tirelessly pursue our client’s objectives in court if necessary when a reasonable settlement is unreachable by other means.
We invite you to contact Strickler, Platnick & Hatfield to schedule a consultation to discuss your individual situation and learn how we can help you with your marital property issues.