Divorce marks a significant transition in life, fraught with emotional and financial complexities. Among the most critical aspects you will face is the division of assets, a process that can profoundly impact your financial future. Understanding how this process unfolds, your rights, and the various factors involved is crucial for protecting your interests and ensuring a fair outcome.
This article aims to address your most pressing questions about asset division during divorce, offering clarity and professional guidance as you navigate these challenging waters.
Your Essential Questions About Asset Division Answered
1. What Exactly Is Asset Division in Divorce?
Asset division occurs when a couple decides to get divorced, marking the dissolution of their shared financial life. This process involves the equitable or equal distribution of all property and debts acquired during the marriage. Partners may even begin the process of dividing assets when they first separate or if one partner leaves the marital residence. Dividing material assets that are tangible and hold monetary value, alongside intangible assets like retirement accounts, often becomes one of the most paramount concerns that divorcing couples face. It’s not merely about dividing up furniture; it encompasses your entire financial landscape built together.
2. Why Is Asset Division Necessary When a Couple Divorces?
The necessity of asset division stems from the legal intertwining of lives during marriage. Important assets may have been acquired before or, more commonly, during a marital union, often with joint efforts or funds. Maryland, for instance, is currently what’s known as an equitable property state. This means its laws allow courts to distribute marital property fairly, though not necessarily equally. The only exceptions to the existing laws are if such a division would create an unfair advantage for one party or if it contradicts a prenuptial or postnuptial agreement. The goal is to ensure that both parties emerge from the marriage with a foundation for their post-divorce financial stability.
3. What Types of Assets Do Couples Typically Have?
Couples often accumulate a diverse range of assets during their marriage. Most couples, for example, have one or more homes, apartments, or investment properties, including vacation homes or rental units. They may also have purchased various vehicles such as cars, trucks, RVs, boats, motorcycles, ATVs, or bicycles. Many partners also possess individual or joint financial assets, like checking accounts, savings accounts, money market accounts, certificates of deposit (CDs), retirement accounts (e.g., 401(k)s, IRAs), stocks, bonds, and other investment portfolios. Other examples of assets include furniture, artwork, jewelry, collectibles, intellectual property, business interests, and other types of personal possessions. Understanding the full scope of your marital estate is the first step in effective division.
4. What Qualifies as a Marital Asset?
A marital asset is generally defined as anything that was acquired by either spouse during the marriage, regardless of whose name is on the title. For instance, most couples typically buy a home, a car, or open a joint checking account while they are married. These assets—and often the debts associated with them, like mortgages or car loans—will be evaluated when it’s time to separate assets during divorce proceedings. Even if one spouse earned all the income, assets purchased with that income during the marriage are usually considered marital property. This also extends to the appreciation in value of marital assets during the marriage.
5. What Is Considered a Non-Marital Asset?
A non-marital asset, conversely, is an item or property that one person owned or received before getting married. For example, one partner may have bought a car or closed on a house well in advance of the marriage. These items may be excluded from asset division if necessary, provided they were kept separate and distinct from marital assets throughout the marriage. Non-marital assets also include gifts or inheritances received by one spouse during the marriage, as long as they were not commingled with marital funds or property.
However, there can be complexities. There may also have been items such as vehicles or real estate that were purchased using a combination of marital and separate assets. For instance, your spouse may have made a down payment on your home using funds they had before the marriage, and then your joint bank account was used to make your monthly mortgage payments. Those possessions can be a bit more complicated to separate in divorce proceedings, but many of them are usually viewed as marital property to some extent because of the commingling of funds.
To further clarify the distinction, consider the following table:
| Feature/Aspect | Marital Assets | Non-Marital Assets |
|---|---|---|
| Acquisition Period | Acquired during the marriage | Acquired before marriage or after legal separation |
| Source of Funds | Joint or individual income earned during marriage | Pre-marital funds; individual gifts or inheritances |
| Examples | Marital home, joint bank accounts, retirement plans (contributions during marriage), vehicles bought during marriage, business interests developed during marriage | Property owned before marriage; separate bank accounts maintained distinctly; inheritances/gifts to one spouse only; personal injury settlements (non-economic damages) |
| Treatment in Divorce | Subject to equitable division | Generally retained by the individual owner |
| Key Consideration | Commingling of funds or efforts can convert non-marital to marital, or create mixed property. | Proof of separate ownership and non-commingling is crucial for exclusion. |
6. How Are Assets Divided in a Divorce?
Couples have two primary paths for asset division. Ideally, you can create your own marital settlement agreement before the divorce has been formally filed. This comprehensive document can explicitly list how all assets and debts are to be divided, reflecting mutual agreement. The judge presiding over the case will then evaluate this asset division to determine that it is fair and equitable, typically approving it if it appears reasonable and was reached without coercion.
If partners cannot decide how assets will be divided or if one party refuses to cooperate, the judge will make those determinations for them. The court will adhere to the equitable property rules when making its decisions. Numerous factors are considered here, including the length of the marriage, any alimony awards, each partner’s financial situation, when and how different assets were obtained, the mental and physical conditions of each spouse, any individual property contributions that one or both partners made to the marriage, the health and age of each person, the reasons for the breakdown of the marriage, and other important factors. This comprehensive evaluation ensures a fair, though not necessarily equal, outcome.
7. Do I Have Any Say Over How Assets Are Divided for My Divorce?
Absolutely, you have significant influence over how assets are divided, especially if you engage constructively in the process. The most empowering approach is to cooperate directly with your spouse when preparing a marital settlement agreement. That’s a perfect time for both of you to openly discuss and choose who gets to keep what assets. You can start by making a comprehensive list of all items acquired before and after the marriage began, providing a clear overview of the marital estate. Mediating with a neutral third party can also facilitate productive discussions and help you reach agreements on contentious issues.
If you choose not to work with your spouse or simply cannot decide on who gets what, it may be more difficult to have a direct say in asset division. While the judge will listen to your concerns and arguments presented through your legal counsel, they’re not obligated to fulfill your specific requests or demands, especially if you’re contesting their decisions without strong legal justification or didn’t make any effort to work on asset division collaboratively with your soon-to-be former partner. The judge may feel more sympathetic toward a spouse who demonstrates a willingness to cooperate, especially if one party has been obstructive or holds a grudge, which can inadvertently impact the perception of your requests.
8. Who Will Live in the Marital Home After the Divorce?
The fate of the marital home is often one of the most contentious issues. The property deed will be examined to find out whose name appears on that document; one or both parties’ names may appear. Any children that the couple had together will also be taken into primary consideration, as minimizing disruption to their lives is often a priority for courts.
If only one person’s name was on the property deed, that person may initially appear to be the obvious choice for ownership. However, the spouse who is primarily responsible for the care of the couple’s children and/or spends more time with them could be granted ownership of the house, even if their name is not listed on the property deed, especially if it’s deemed to be in the children’s best interest to remain in the family home. Other factors include one spouse’s ability to maintain the mortgage payments and assume any associated debt. You may also be required to buy out your spouse’s share of the equity.
9. Will My Spouse Be Able to Remove Me from the Marital Home If She Is Awarded Ownership?
It’s very possible that the partner who is allowed to own and remain in the marital home could eventually ask you to leave, or you may be ordered to vacate as part of the divorce decree. However, they cannot simply change the locks or force you to leave against your will without a legal order. The only possible exception is if a protective order (also known as a restraining order or order of protection) is filed and granted after one or more incidents of domestic violence have been reported, or if specific behaviors warrant such an order to ensure the safety of the household. A protective order typically includes provisions for exclusive possession of the marital home for the safety of the petitioner. Otherwise, your spouse would need to follow legal eviction procedures or wait for the final divorce decree to be enforced.
Home ownership after a divorce can be complicated, leading many couples to choose alternative solutions. Some couples prefer to sell their marital home and then use those funds to purchase or rent separate residences, often equalizing the equity. You may want to discuss this subject thoroughly with your spouse. Remember, your children’s best interests should always be given top priority. It can be very disruptive if they have to move to another home, change schools, or significantly alter their routine during the middle of a school year or during an already stressful period.
10. Can I Contest Asset Division?
Yes, you have the right to contest asset division if you believe the proposed division is unfair or inequitable. However, just be prepared to back up your claims with substantial evidence. A judge won’t change their mind just because you wanted a certain item and didn’t receive it as part of the divorce settlement. Your reasons must be valid, demonstrating a material misrepresentation, an error in valuation, or an outcome that is genuinely inequitable based on the legal criteria. You may need to provide justification or prove that the division was indeed inequitable, perhaps by showing undisclosed assets, undervalued property, or a failure to consider all relevant factors. This typically requires legal counsel to present your case effectively.
Beyond the FAQs: Strategic Considerations for Asset Division
Dividing assets during a divorce isn’t always easy. Both partners may want to keep the home, specific cars, or other cherished belongings. It can take more time and effort to decide which person will keep what items, and this can inevitably lead to arguments and misunderstandings. While emotions naturally run high during a divorce, they should be kept out of the equation during asset division discussions, although that is sometimes easier said than done.
To navigate this process as smoothly as possible, consider these additional strategies:
- Full Disclosure and Valuation: Ensure all assets and debts are fully disclosed and accurately valued. Hiding assets can lead to severe penalties and delay the divorce process.
- Consider Future Needs: Think about not just what you want, but what you need for your financial stability post-divorce. This includes income streams, housing, and retirement planning.
- Tax Implications: Different assets carry different tax consequences upon division or sale. Consulting with a financial advisor or attorney can help you understand the tax implications of various division scenarios.
- Estate Planning Review: Your divorce will necessitate a review and likely revision of your will, trusts, and beneficiary designations for life insurance and retirement accounts.
Seeking Professional Guidance
If you have questions that extend beyond these FAQs, we’ve got answers. Call us today to set up a free consultation. Our trained professionals can help you understand what to expect during the asset division process and come up with strategies to make the process as simple and stress-free as possible. We can even represent you in court if you wish, advocating for your best interests.
Our primary goal is to help you get back on track financially and emotionally. This will take time and effort; things just don’t improve automatically overnight. However, with the right guidance and your willingness to engage in the process, you should find yourself in a much better situation before you realize it.