Keys in Front Door

How Does Property Division in Divorce Work?

Property Division in Divorce

Divorces usually involve property division. With a few important exceptions, all the property that was acquired during a marriage is considered marital property in Maryland. Marital property normally includes such things as houses, cars, furniture, personal property, stocks, bonds, jewelry, bank accounts, pensions, retirement plans, 401k accounts and IRA’s. It generally does not include the value of professional degrees/licenses.

Marital Property

All property obtained during the course of the marriage is marital property, regardless of who paid for it.  The exceptions to this general rule are property received by one spouse as a gift or inheritance from a third party, or excluded by a valid agreement.  This property is considered non-marital property.  Marital property can include real estate, bank accounts, stock, furniture, pensions and retirement assets, cars and other personal property.
MD Code Family Law § 8-201      )

Non-Marital Property

Non-Marital Property is any property obtained prior to the marriage.  It remains the property of the party who owned it prior to the marriage.  Non-marital property remains non-marital as long as it is not gifted or titled to the other spouse.  Also, any property received by a spouse by gift or inheritance during the marriage from a third party remains the non-marital property of that spouse unless gifted or titled to the other spouse.

In the event that the marriage is dissolved and one spouse wants to claim particular items as his or her own, the person must have proof that the property in question belongs to him or her alone.  A couple may acquire joint ownership in property brought to their marriage by either spouse by agreement or transfer of title.

Non-marital property is protected from the debts of the other spouse.  Each party has the power to dispose of property owned by him or her alone, as if unmarried.

Property that is Part Marital, and Part Non-marital

Some assets can be both marital and non-marital property. A house that was purchased before the marriage is not marital property. However, when you and/or your spouse use marital funds to pay the mortgage, the house then becomes part marital and part non-marital.

Real property that is held by “tenants by the entireties” is considered marital property unless you have a valid agreement to exclude it. MD Code Family Law § 8-201(e)(2)  

Property acquired by the parties while living together before marriage is not considered marital property.

Making a Claim for Property Division

If the parties cannot agree on how to divide your property, the court will decide what is marital property, how much that property is worth and how to divide it. The court will also consider any marital debts incurred to acquire marital property when determining the value of the marital property.

The court will determine each spouse’s share of the property. The court will use a variety of factors to decide the relative value of each spouse’s share of the marital property. Under the Maryland Marital Property Act, the court can consider both the monetary and non-monetary contributions of each spouse to the marriage. Non-monetary contributions can include childcare, meal preparation, and maintaining the home.

How does the court determine property division?

The court determines who is entitled to what share of the valued, marital property, taking into account the following factors:

  1. the contributions, monetary and nonmonetary, of each party to the well-being of the family;
  2. the value of all property interests of each party;
  3. the economic circumstances of each party at the time the award is to be made;
  4. the circumstances that contributed to the estrangement of the parties;
  5. the duration of the marriage;
  6. the age of each party;
  7. the physical and mental condition of each party;
  8. how and when specific marital property or interest in property was acquired, including the effort expended by each party in accumulating the marital property or the interest in property;
  9. the contribution by either party of property to the acquisition of real property held by the parties as tenants by the entirety;
  10. any award of alimony and any award or other provision that the court has made with respect to family use personal property or the family home; and
  11. any other factor that the court considers necessary or appropriate to consider in order to arrive at a fair and equitable monetary award or transfer of an interest in property

The court cannot transfer property titled in one spouse’s name to the other (except, under certain conditions, for retirement assets, family use personal property and jointly owned real property used as the primary residence during the marriage). Instead, the court will give the spouse without title a monetary award to cover their share of the value of the marital property.

If the property cannot be divided, or the court won’t order it’s division  (such as a house), the court will decide on a value.  One person can “buy out” the other person as long as both parties agree to it. Otherwise the asset may be sold and the funds divided. Contact us for more information.