Property division is often the one aspect of divorce couples worry about the most. You might be concerned about losing your home, retirement accounts or other valuable assets if you divorce.
While it is true that the outcome of a divorce usually affects a financial situation, understanding how the law works in Maryland when it comes to property division in a divorce can increase your chance of an efficient process and fair outcome.
Equitable distribution
Maryland is an equitable distribution state. This means that marital property is divided fairly. It is important to note that equitably does not mean equally.
Therefore, do not assume that your marital property will automatically be split equally between you and your spouse. Depending on the circumstances, an unequal split of marital property could be awarded. However, in many situations, an equal division of property is considered fair.
Marital and separate property
Before deciding how to split your property, you must classify the property as marital or separate property. Only marital property gets divided in a divorce.
Marital property is generally any property you or your spouse acquired during the marriage. Property acquired before marriage or property that did not mix with marital property, such as an inheritance kept in a separate account, could be separate property and not subject to division.
Sometimes certain portions of an assets are considered marital property, while others are separate property. This is often seen with retirement accounts.
Typically, only the increase in value of the retirement account is viewed as marital property. If you held funds in a retirement account before getting married, and the balance of the account increased by $100,000 during your marriage, only the $100,000 increase is generally considered marital property.
Factors considered by a court
Separate property owned by each spouse is one of several factors a court examines when determining an equitable split of marital property.
For example, if you are the spouse with the inheritance in the separate account, this is likely a fact a court will consider when deciding how to split marital property. In this scenario, your spouse might be awarded a higher share of the marital property.
Some other factors a court examines when deciding how to equitably split marital property include the length of the marriage and each spouse’s contributions to marital property.
The shorter a marriage, the less likely you are to receive a higher portion of marital property. A court could be reluctant to award a spouse a greater share of a marital estate if the couple was married for six months, versus 25 years.
A court will also consider which spouse made necessary efforts to purchase marital property. If both spouses were earning similar incomes and made equal efforts, this supports an equal division.
Knowing your rights and options
You and your spouse are always free to agree about how to split your marital property on your own. Sometimes this is easier and quicker than letting a court decide. Both spouses are also more likely to be satisfied with the outcome.
However, know that a court will still review your agreement to ensure it is fair to both spouses. If not, the court might not approve the agreement and finalize your divorce.