how property is divided in a divorce

Everyone knows that divorce involves dividing up marital property. Unfortunately, many people are confused about exactly how that takes place. Is property divided exactly equally? Unequally? How is it decided who gets which assets? Is there any property that is exempt from division? These, and many more issues, are wrapped up in the question of “how is property divided during a divorce?”

Below, we have addressed some of the most frequently asked questions we hear regarding equitable division of marital property in Maryland and the District of Columbia during a divorce.

Does All Property Get Divided During a Divorce?

Divorce generally divides up marital assets. Unless the parties agree otherwise, separate , or nonmarital, assets are not divided during a divorce and remain with the spouse to whom they belong. However, with some marital property also comes the concept of marital debt. Marital debt is defined as debt directly traceable to the acquisition of a marital asset. An example of marital debt is a mortgage attached to the marital home or a car loan used to purchase a vehicle. The mortgage or car loan would be considered marital debt.

How Do I Know What Property is Marital and Nonmarital?

Marital property is, generally speaking, all property acquired by either spouse during the marriage. Many people mistakenly assume that if an asset is acquired by them during the marriage (like a paycheck) or an item of property that is titled in their individual name (like a car or bank account) that this property is “theirs” alone. Fortunately, or unfortunately, for purposes of equitable distribution in divorce, that is not true.

There are some exceptions to the rule that property acquired during the marriage is marital property. Property one spouse receives by gift or inheritance from a third party is separate property. So is property excluded from division in divorce by a valid agreement (like a prenuptial agreement). Also, property owned by either spouse prior to the marriage is separate property, as is any property directly traceable to these sources.

Can My Spouse Get Any of My Nonmarital Property During Our Divorce?

The answer is not simple — it depends. Nonmarital property can be “commingled” with marital property. If this occurs, the property may become marital property subject to equitable division. An example of this concept would be money you inherited from a family member that you deposited in a joint bank account with your spouse. Conversely, had you placed the funds in a separate bank account titled in your sole name, the account would be more clearly nonmarital.

Bear in mind that the burden of proving that property is nonmarital is on the person who claims that it is nonmarital. If you cannot prove (or trace) that a particular item is nonmarital, the court will consider it to be marital property subject to equitable distribution. This concept is a particularly important issue for couples who marry later in life after they have acquired more assets than most younger couples enter marriage with. It is also a good reason for older couples, or couples who are entering a second or subsequent marriage, to have a prenuptial agreement.

Can Property Be Partly Marital and Partly Nonmarital?

Yes, it can. A common example is a retirement account that one spouse started contributing to before the marriage, and continued contributing to after the marriage. However, determining which portion of an asset is marital and what is nonmarital can be very complicated.

What is Considered to be “During the Marriage” for Purposes of Deciding Whether Property is Marital or Nonmarital?

Many people assume that property acquired after the date of separation from a spouse is not considered “marital” property; however, that is often not true. In Maryland and many other jurisdictions, for instance, property acquired or earned up until the date of the divorce decree is marital.

Who Decides How Much Marital Property is Worth?

Sometimes it is obvious or uncomplicated to determine how much an item of property is worth. It is relatively simple to determine the value of items like a bank account or a publicly traded stock. But sometimes the process of valuation can be much more challenging, such as with a closely-held business or a unique piece of art. Certainly, divorcing couples may be able to agree on the value of a particular item, but this can be problematic when one spouse holds more information about the true value of the property than the other does (as is often the case in a family business). In such a situation, it may be necessary to have a valuation expert perform an analysis to value certain assets.

Does “Equitable” Distribution Mean Property is Divided Equally Between Spouses?

“Equitable” does not necessarily mean “equal.” “Equitable” means a division that is fair considering all of the specific facts and circumstances of the case. Both Maryland and the District of Columbia have laws that dictate specific factors a court must consider in deciding what equitable means in a certain situation. If you think that there are factors at play that should affect the distribution of marital property in your case, talk to an experienced divorce attorney to guide you.

Do My Spouse and I Have to Let the Court Decide Who Gets What?

Absolutely not. In fact, in the vast majority of divorce cases, the couple reaches a settlement on their own or with the help of their attorneys and possibly other professionals, such as through the process of negotiation, mediation or Collaborative Divorce.

How Can an Attorney Help With Equitable Distribution of Property?

It is critical to have the help of an experienced divorce attorney, especially if your marriage involves significant or complex assets. A knowledgeable attorney will help ensure that your spouse is disclosing all property, that assets are properly valued, and that the court has all information needed to ensure you receive an equitable result. The advice and advocacy of a seasoned attorney is an investment, not an expense, and can result in a much greater award of marital property.

If you have further questions about equitable distribution of marital property in Maryland and the District of Columbia, please contact Strickler, Platnick & Hatfield to schedule a consultation.