This is about property division in divorce in Maryland, including the general rule for Maryland property division, what effect the length of marriage and conduct of the parties has on property division after divorce in Maryland, how separate property works in Maryland, and treatment of the marital home and retirement plans in divorce in Maryland.
- What’s the general rule of property division (equitable distribution, community property, or legal title)?
- What effect does the conduct of the parties have on property division?
- What effect does the length of the marriage have on property division?
- Is there such a thing as separate property? What does it take?
- Any special rules for the marital home?
- How do retirement plans get divided?
What’s the general rule of property division (equitable distribution, community property, or legal title)?
Maryland is an equitable distribution state. This means that the division of property and debts between the divorcing parties should be fair and equitable, but not necessarily equal. There is no fixed standard to divide property, each case will be decided on its facts, and the trial court’s discretion will not be disturbed on appeal without a showing of clear abuse.
This is how the courts of Maryland distribute property:
- First, the court finds and values the property (equity in the house, value of pensions, value of antique furniture).
- Next, the court determines whether the particular piece of property is separate or non-marital property and remains with the person who owned it.
- Then the court distributes the marital property.
The court must divide joint accounts equally. The court cannot change title to property (except pensions). So items such as the house and furniture are ordered sold by a trustee and the proceeds divided equally. After calculating what marital property will be in the hands of each party, the court can then make a monetary award to adjust the amounts divided equitably. A monetary award is usually reduced to a judgment. A judgment, however, is not the same as getting cash. You may then have to enforce the judgment to obtain payment, which means additional legal proceedings after your divorce.
If you and your spouse can agree on how things will be divided and if your agreement is reasonable, it will be approved by the court, even if your agreement doesn’t follow this process. If you cannot agree, the court will divide the property for you.
What effect does the conduct of the parties have on property division?
Misconduct matters. But it probably matters less than most people expect it does. Remember that the facts that seem so shocking to you may not be shocking at all to the judge, because he or she has already heard about this sort of thing several times this week.
The legislature in Maryland has set forth certain factors the court must consider to determine who gets what marital property, as follows:
* length of the marriage;
* age, health, skills, and abilities of the parties;
* amount of separate property owned by each spouse;
* relative ability of the parties to acquire property in the future;
* financial needs and liabilities of the parties;
* contribution to the education or to the earning power of the other;
* contribution to the value of the marital property or the separate property;
* premarital property and postmarital property;
* financial conditions of each party;
* tax consequences;
* use and possession; and
* other factors that the court considers appropriate (like misconduct).
Maryland Code, Family Law Article § 8-205(b).
What effect does the length of the marriage have on property division?
Generally, property division involving a short?term marriage is relatively straightforward. When few or no joint assets have been accumulated, the tendency is to “untangle” the marriage. This means giving back to the husband and wife what each of them brought to the marriage, both assets and debts, and dividing up in some fair way the assets and debts the parties accumulated in the marriage. The court attempts to return the parties to the financial position in which they arrived at the marriage. The more the parties have “co?mingled” their assets, however, the more difficult this “untangling” may become.
In distributing property after a longer term marriage, the judge’s tendency will typically be to begin with something like a 50/50 division of the marital estate. The judge might depart from that 50/50 standard, though, depending on what the judge thinks is equitable under the circumstances.
Is there such a thing as separate property? What does it take?
Separate property is usually acquired before the marriage, or outside the marriage (such as by gift from a third party or inheritance), or is excluded by a valid agreement. A gift from a spouse is marital property, however. And non-marital property can be converted into marital property, for example, by mingling marital and non-marital accounts, changing the title on premarital accounts from sole to joint, or changing title on real estate to tenancy by the entireties.
Any special rules for the marital home?
If you jointly own your house, you cannot force your spouse to leave. If you change the locks, you spouse can hire a locksmith and change them again, or call the police who will probably make you let your spouse back in. There are two exceptions. The court can order a spouse to leave for up to a year for domestic violence. And the court can give exclusive use and possession of a house, furniture and automobile, to a parent with primary custody of the children, for up to three years after the divorce.
How do retirement plans get divided?
Pensions can be divided by the court by entry of a Qualified Domestic Relations Order (QDRO) or other similar order, depending upon the type of pension. Some pensions have an easily determined cash value and can be divided now into separate pension accounts for each spouse.
Others have a future benefit which can either be valued by an actuary or divided by the court on an “as, if and when” paid basis. If you are receiving a future pension benefit, the death of your spouse may terminate the pension benefit. Therefore it is important to get a survior annuity, which is similar to life insurance.
Having a QDRO drafted, approved by the pension administrator, and entered by the court, is not an easy task, even for a lawyer. The stakes are usually high, and the pension may be the largest marital asset. If your spouse has a substantial pension earned during the marriage, you probably need to hire a lawyer to draft the appropriate court orders.
Other issues in Maryland: