Not all stories have happy ending. This applies to some relationships and marriages. Others might have prepared through a pre-nuptial agreement but what if you haven’t? All, if not most, end up having the actual separation process longer because of the need to properly divide properties. Gladly, there are several laws and proceedings to date which could help make things easier and the separation better.
Maryland law requires a division that is equitable, meaning that it’s fair but not necessarily equal.
Marital Property and Separate Property
The first step in the division process is deciding whether property is marital or separate. Spouses who entered into a prenuptial agreement before marriage may have specified that certain property is marital or separate. If there is no agreement, then marital property includes all of the assets and debts the couple acquires during marriage. Property is separate if a spouse owned it before marriage or acquired it during marriage by gift or inheritance. Separate property also includes any property that one spouse can directly trace back to property that began as separate property. Real property held by the couple as “tenants by the entirety” is always marital property unless the couple has a valid agreement stating otherwise.
Marital and separate property can be mixed together—sometimes called “commingling.” For example, both spouses may pay the mortgage on a house that one spouse owned separately before the marriage, or one spouse may deposit separate funds into a joint bank account. Separate funds commingled in joint accounts will remain separate property only if the owner is able to trace the separate funds through financial records. If marital funds are used to pay the mortgage or expenses on a separately owned home, or another separately owned asset that has appreciated in value, a court will apply the “source of funds” rule, which requires determining the value of the separate and marital property in proportion to the contributions. These situations can be very complicated and you’re likely to need an attorney to help you figure out the separate/joint allocation. If spouses aren’t able to decide what belongs to whom, a judge will have to decide how to apportion the separate and marital interests.
After determining which property is marital property, the couple, or the court, will generally assign a monetary value to each item. Couples who need help determining values can hire professional appraisers. Some financial assets, such as retirement accounts, can be very difficult to evaluate and may require the assistance of a financial professional, such as a C.P.A. or an actuary.
Dividing the Property
Spouses can divide assets by assigning certain items to each spouse, possibly with an equalizing payment if one spouse gets substantially more than the other so that the division isn’t equitable, or by selling property and dividing the proceeds. They can also agree to continue to own property together. While this isn’t a very attractive option for most people, as it requires an ongoing financial relationship, some couples agree to keep the family home until children are out of school. Couples who end up in court could find themselves in a similar situation. Maryland law provides that a court may award one spouse the temporary exclusive use not only of a family home, but also certain items of “family use personal property,” such as a vehicle or home furnishings, for up to three years, or until the spouse with exclusive possession remarries. Read full here.
In Maryland, marital property isn’t always divided right down the middle. Because Maryland is an equitable distribution state, the divorce court will divide property fairly between the spouses, but not always equally. This article answers some common questions about property division in Maryland.
While there could be several answers to one question depending on the actual situation, the website, though, answered some basic questions, like:
What is marital property?
Marital property is property that belongs to the marriage — to both spouses — rather than to one spouse or the other as separate property.
What happens if one spouse wastes marital property?
Dissipation (the legal term for waste) happens when one spouse uses marital property for his or her own benefit for a reason unrelated to the marriage at a time when the marriage is undergoing an irreconcilable breakdown.
What happens to non-marital property in a divorce?
Nothing, usually. The spouse who owns the non marital property keeps it. However, in considering a monetary award, and in deciding on alimony, a Maryland court must consider all of the financial circumstances and resources of each of the parties, which includes any non-marital property. More information here.
Divorce and separation are often laborious. While others refer it to a “nasty” one but when the feeling is mutual then it could be the best solution and avoid prolonging the agony. Wanting to move on and sell your couple house instead? Dependable Homebuyers can help you!