Maryland is an equitable distribution state. This means that the court values all marital property and fairly divides it between the parties. Usually an award is 50/50, but it does not have to be equal.
One primary issue in most divorces is the identification and valuation of marital property. Marital property is defined as all property acquired during the marriage, regardless of title. Marital property includes jointly titled real estate. Marital property does not include:
- Property acquired prior to the marriage;
- Property acquired by inheritance or gift from a third party;
- Property excluded by valid agreement between the parties; or
- Property directly traceable to any of these above sources.
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Marital and Non-Marital Property
More often than not, one party will bring assets into a marriage and/or has obtained an inheritance while married. These funds are considered non-marital and if the parties are divorced, in Maryland, the other party would not be eligible to receive any of it. However, if the inheritance is put in a joint account, these once non-marital funds become either completely marital or partially marital.
It is possible for a property to be considered both marital and non-marital. If there is no agreement as to whether or not a property is marital or non-marital, the party arguing that all or part of a property is non-marital must prove that the property is in fact non-marital and what the value is on the non-marital property. This can be difficult to overcome if there is no documentation and/or third party individuals who have personal knowledge that the property is non-marital and what the non-marital value is of the property. Whether property – other than jointly titled real estate – is marital, non-marital or partly marital and partly non-marital depends not upon how the property is titled, but upon the source of payments used to acquire the property. For example: a home titled in Husband’s name alone is not Husband’s non-marital property merely because it is titled in his name. The source of any down-payment and any mortgage payments determines whether the home is or is not marital property. Title determines the distribution of the sale proceeds.
Almost every divorce involves items of real and personal property division such as homes, furniture, automobiles, financial accounts and pensions, acquired both before and during the marriage. Usually, it is relatively simple to determine which items are marital or non-marital. However, when a marriage is one of many years with substantial assets acquired through loans, gifts or inheritances, “mixed” in an account with marital funds, identifying the nature of the property becomes a difficult and substantial task, but a necessary one. It is possible that property that was once non-marital becomes marital because the funds in the accounts or the money contributed towards the assets is so commingled that it is impossible to determine what funds were used to pay for what.
Distribution of Property
A court must resolve ownership rights to property according to title. It does not have the power to transfer ownership of personal or real property from one spouse to another. A court does, however, have the power to order jointly titled property sold, and the court has discretion to award a monetary award in favor of one spouse against the other.
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