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Decide Who Gets What During A Divorce Through Equitable Property Distribution

JC Law Attorneys in our Moot Court Room

JC Law can help you fight for your property and assets – before a judge decides what “equitable distribution” means for your divorce case.

What Are Equitable Distribution Divorce Laws In Maryland?

So, the first thing to know is that Maryland is not a “community property” state.

This means that just because you or your spouse owns a valuable asset (or debt!), it is not automatically up for grabs during the property redistribution of a divorce or marital separation agreement.

Instead, Maryland is considered an “equitable distribution” state. Maryland divorce law generally considers only property acquired during the marriage to be “marital property” and thus able to be divided between the two parties.

However! Maryland’s equitable distribution laws can also label any property that someone bought before or after the relationship as “marital property” if it was used by the family together. Instances can include:

  • A car that you personally paid for to keep your ex on the road after you split up – they may be able to claim it;
  • A home you bought before the relationship started, but that you both lived in for the duration of your marriage; or
  • Any money you personally earned, but you placed into a joint bank account.

Maryland’s equitable distribution laws also mean that marital property is not automatically split 50-50 between both parties.

For example, let’s consider a piece of speculative real estate property that was purchased during the marriage. You and your ex decide to sell the property and get back $200,000 in equity from the sale. How could it be divided?

  • Situation A: At the original purchase date, both parties contributed equally to the purchase, with both names on the deed and both making about the same amount of money. The equity could be split 50-50 at $100,000 each.
  • Situation B: One party paid the initial down payment of $50,000; the other paid the regular mortgage payments, contributing the other $150,000 worth of equity in the home. Therefore, the equity might be split 25-75, according to each party’s marital contributions.
  • Situation C: Only one party ever made any financial contributions to the property. However, they were able to do so since the other party supported and managed the home life to enable the breadwinner to progress professionally. The court may decide that some split of the equity to the other party may be owed, even if they never contributed monetarily to its purchase or upkeep.

There are so many possible situations and scenarios when it comes to “equitable” property distribution that it truly requires a divorce lawyer to outline what might happen in your situation – and how to best tailor it for your own benefit.

What Bank Accounts And Monies Are Available To Be Divided During A Maryland Divorce?

Any bank accounts opened during the marriage – including retirement and investment accounts – as well as plain cash assets also accumulated during the marriage could be privy to division during divorce. These include:

  • 401(k) accounts, pensions, and savings accounts
  • Qualified domestic relations orders (QUADRO)
  • Real estate and other property
  • Investment portfolios, including stocks and bonds
  • Businesses, either owned personally or with partners

Often any assets acquired before the marriage was finalized – and that your soon-to-be-ex-spouse had no hand in attaining – can be excluded from the property tally.

However, these can quickly be brought into question if the accounts were contributed to during the marriage, potentially making them marital property. Only your divorce lawyer can say for sure, though.

Is My 401(k) At Risk In A Divorce? Can I Claim Part Of My Ex-Spouse’s Retirement?

In a word: Yes, retirement savings and plans may be at risk of property division during a divorce.

Since Maryland is an “equitable distribution” state, contributions to and earnings from a retirement plan such as a 401(k) or 403(b) that occurred during the marriage can be marital property – even if they’re in your name only.

Future pension plans may be at risk, as well, if contributed to during your marriage.

Situations can get more complex than that, however.

Let’s pretend for a moment that a military couple is divorcing. The entire marriage was spent in the military, for which the non-servicemember spouse sacrificed their career and personal goals to keep the home active while the other served overseas.

It’s entirely possible for the non-servicemember spouse to argue that their support at home enabled the other spouse to serve as long as they did – justifying a portion of the future pension.

Or, the servicemember may argue that their pension was less than it might have been since they left the service at their non-serving spouse’s behest. Does the non-serving spouse get a smaller portion than might otherwise have been valid?

It takes a talented divorce attorney with experience in complicated asset division to determine all the possible scenarios – and which one will best benefit you.

How Is Debt Divided During A Divorce In Maryland?

There is nothing worse than being saddled with someone else’s debt. In today’s economy, credit cards help people make ends meet.

However, if your spouse’s spending habits have put your family in a situation where the household has a lot of credit card debt, then repayment may not be your responsibility.

That’s because debt in divorce cases is similar to assets: It usually should be divided equitably between the spouses. However, under the Maryland Marital Property Act, this is not always the case.

So, if the debts acquired during the marriage were principally geared towards sustaining the marriage or family, then the debt will be considered mutual or joint.

However, if your spouse insisted on taking a vacation to Hawaii several times a year against your wishes for their personal enjoyment, then most likely you will not be responsible for that.

Often, debt is brought up by a spouse who knows that they are going to get separated or divorced.

During the initial consultation, it is important to assess the vulnerability of this debt situation and put a stop to it immediately. That may include credit cards, bank accounts, and other assets.

That’s why if you are facing a divorce, you quickly need to figure out how to divide credit card debt so that hundreds or even thousands of dollars is

The biggest problem occurs when both names are on the credit card.

  • Best case scenario: If you and your spouse used a joint credit card, with both of your names on the account, then both of you owe the credit card company directly. One possible outcome is a 50-50 split.
  • Worst-case scenario: You have credit card debt in your name only. Even if you used that credit for living expenses like groceries and the mortgage payment, there is a possibility that you could be entirely responsible.

Only a divorce lawyer experienced with debt distribution can say for sure, though – and be able to present your case in the best possible light to a Maryland courtroom, if necessary.

Who Gets The House In A Divorce? For That Matter, Who Pays The Mortgage During The Divorce?

First of all, Maryland law considers the “family home” to be the “principal residence” of the parties involved.

The “family home” definition excludes any property acquired before the marriage or gained as an inheritance that is not regularly used by the family.

Nor is the family home included in property settlements if it’s “excluded by a valid agreement” such as a prenuptial agreement.

Who pays the mortgage on the family home depends upon the existing circumstances when the parties separate.

If the husband is the breadwinner and the wife is a stay-at-home-mom, generally Maryland courts will want to ensure the mother and children’s stability until the divorce is finalized.

Maintaining their stability typically includes paying for the mortgage if, in fact, the mortgage has been paid for by the husband for a considerable amount of time.

A spouse who has been a homemaker or decides to stay in the home with the kids will inevitably seeking a court order to stay in the home for a period of three (3) years, for which the ex-husband spouse pays all or a portion of the mortgage.

However, this request is not written in stone. Many times, these factors can be altered. In fact, during any court order, steps can be taken to shore up the financial situation of either party to adjust the court order’s duration or implementation altogether.

Now, the mortgage payment and ownership of any real estate property are two separate issues.

Depending on the circumstances, any number of things can happen regarding the family home:

  • One party “gives” it to the other – often the one with primary physical custody of any children involved – in exchange for other valuable property or concessions during the separation agreement negotiations.
  • The two parties co-own the home or other properties together as before, though that may be unwise, depending on how well they get along post-divorce.
  • Both parties agree to sell the house and split the proceeds.
  • One party “buys” the other party out of their share of the home. For example, if the home has $100,000 worth of equity in it, based on the market and how much of the mortgage has been paid down, then one party may pay the other $50,000 to take them off the mortgage. One person ends up with $50,000 cash but no house, and the other has the house but not as much cash.

I Started A Successful Business During My Marriage. Will I Lose It During The Divorce?

Whether your business will be considered during property division of the divorce will depend, of course, on many different factors.

When evaluating your valuable assets – including any business you own outright or have a stake in! – and your divorce lawyer may consider:

  • When did the business start?
  • Did your ex contribute in any way to its success? (Maryland courts may consider indirect contributions, such as your ex staying at home to free up your time, so you could devote more attention to the business.)
  • Did you sign a prenuptial agreement that addressed the possible distribution of valuable assets?
  • What sort of physical assets
  • Who is responsible
  • Would you be able to keep your same standard of living if something happened to the business post-divorce? Would your ex?

The divorce lawyers here at JC Law believe that the system needs to be fair in making final financial decisions. Part of doing what you love – especially after divorce – comes from commitment, and you’re only able to commit if you provide the resources you have at your disposal.

Note that if you are a successful businessperson or professional, there is a high likelihood that your spouse may be asking for temporary or permanent alimony.

If your spouse is asking for alimony, you need to make sure your attorney understands every piece of evidence in your scenario. Spousal support, commonly known as alimony, is just one piece of the puzzle, but it’s a huge piece.

“At one point, there was a misunderstanding with the other party over a sizable sum of money, and [the Firm] resolved the matter immediately, which itself almost paid for my atty’s fees.”

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Equitable Property Distribution