Dividing marital property at the time of divorce

Dividing marital property at the time of divorce

Each state has developed it's own statutory laws which govern the division of property at the time of divorce. In Maryland, the legislature has adopted a three step process which requires the court to engage in the following three steps:

1) Determine what property is marital property under Family Law Section 8-203. Generally, this is all property accumulated during the mariage and excludes any property brought into the marriage, received as a gift from a third party, or inherited. It is valued through the date of divorce.

2) Determine the value of the marital property under Family Law Section 8-204. Generally, this is the value of the marital property less any outstanding loans which are directly traceable to the property, which reduces the value of the property.

3) Determine whether to make a monetary award to adjust the rights and equities of the parties in the marital property. Generally, a monetary award is intended to correct any inequity which may arise when one spouse owns more marital property than the other. There are eleven factors that a court may consider in making a monetary award, including the circumstances leading up to the separation. Family Law Section 8-205. A court is not required to make a monetary award, but usually does when one party owns more property than the other.

Most persons who are involved in this process begin with the assumption that the court will divide the property evenly, and try to reach an agreement by which they do this themselves. Maryland courts usually divide the property accumulated in a long term marriage evenly, and this practice has been recognized by the courts. Deering v. Deering, 292 Md. 115 (1981). However, the court may, after considering the eleven factors in Family Law 8-205, decree an unequal divison of the marital property. If it does so, the court is required to state the reasons for making an unequal division. Caccamise v. Caccamise, 130 Md. App. 505 (2000). This is where "fault" comes into play. One of the eleven factors in Section 8-205 is the circumstances surrounding the separation. If a court decides one party is at fault it may, but is not required to, order an unequal division. Unfortunately, there is no bright line rule on how much "fault" will influence a judge and this can result in a case becoming rather contentious.

This is a basic overview of how a Maryland court divides marital property and certainly does not cover every issue that may arise. Some of these issues are the following: 1) how and when a court can transfer property; 2) how the pre-marital contributions of a spouse to the purchase of a marital home are considered; 3) how a retirement plan is apportioned; 4) when a court can consider property that has been dissipated by a spouse as marital property; and 5) how to value a business interest. These are not intended to be covered by this blog, but are issues that anyone involved in a divorce may encounter. When these occur, you need to consult with an experienced divorce attorney to review your rights and assess how the court will adress these issues if the matter proceeds to trial. An experienced attorney usually attempts to predict the likely outcome of these issues at trial and assist their client in reaching an agreement that would be similar to one that would occur if the matter were taken to trial.

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