Equitable Distribution of Marital Property in Maryland

The process of dividing marital property between two divorcing spouses is often fraught by conflict and contention. Although there are never clear “winners” in divorce, asset division is one area of the law where it is possible to account for the distribution of marital property in an equitable fashion. However, in Maryland, equitable distribution does not necessarily mean equal distribution.

Specifically, marital property is defined as: (a) real property held as tenants by the entirety, unless excluded by valid agreement. (b) any property acquired by one or both parties during marriage, and  does not include any property (1) acquired before the marriage, (2) acquired by inheritance or gift  from a third party, (3) excluded by valid agreement or (4) directly traceable to any of these sources.  Generally, any asset that has been acquired during the course of the marriage is considered “marital Property” (except gifts, inheritance and assets excluded by agreement). This can include houses, cars, pension, 401(k) plans, military pensions, Thrift Saving Plan (TSP), and any savings built up during the course of the marriage.

Maryland does not include individual debt (not used to acquire marital property) in its marital property analysis. In fact, a court may not require one spouse to pay the sole obligation of the other, or to satisfy joint obligations of the parties such as mortgages and taxes on real property, or pay the interest on joint promissory notes. However, if one party gets use and possession of a house or car the other party can be obligated to contribute to the mortgage or car payment.  For example, if a credit card in one spouse’s name has $10,000 of debt on it, that spouse will be responsible for the entire debt even if the other spouse is the one who incurred the bill.

Since Maryland is an “equitable distribution” state, this means that if the parties do not reach an agreement with regard to dividing marital property, the judge will decide.  For the Maryland court to resolve the issue of division of martial property among spouses, it considers the following three-step process: (1) determine what property is marital property. (2) determine the value of all marital property. (3) make a monetary award as an adjustment of the equities and rights of the parties.  A monetary award is an adjustment of the equities and rights of the parties concerning marital property.  In other words, it is what a court orders one spouse to pay the other spouse so that what each takes from the marriage is fair under all the circumstances of the case.

In fashioning a monetary award, the court considers a list of specific factors.  Some exmaples of situations the court will ponder are:

  • If the marriage did not last long, the judge may send each spouse away with as much as he or she brought into the marriage.
  • If one person has a serious spending issue and squanders much of the marital property, the judge may not split the remaining property evenly.
  • Practical considerations are often taken into account for couples at very high and very low ends of the income ladder.

There are many ways to resolve how a spouse will receive which assets. I can help you choose from a wide selection of dispute resolution methods ranging from litigation to an informal handshake agreements to resolve the division of marital property. To schedule an appointment with me, please call (240) 617-0404.