What’s Considered Marital vs. Non-Marital Property in MD? | Howard County Divorce
Divorce marks the end of a chapter in one’s life, as well as the beginning of a new chapter. Outside of the considerations made for children, divorce is essentially about finances and the division of property. Marital property is defined as all of the “stuff”, however titled, that is accumulated during the length of a marriage – that is, from the day you walk down the proverbial aisle to the day the judge signs the divorce decree. And that “stuff” essentially belongs to the marriage and can be anything from real estate to cars to furniture to bank accounts to investments and life insurance policies to pensions and brokerage accounts, etc.
You may be surprised to know that pets are not considered family members under Maryland law, but are rather defined as “chattel” and can be considered marital property. And how about those frequent flyer miles that you have accumulated? Yes, these also can be considered marital property in Maryland. As you can see, the list of what can be defined as marital property is extensive and can be unique to each situation.
What’s NOT Considered Marital Property in Maryland?
Of course, it is important to know what is NOT considered marital property under Maryland Law. In Maryland, there are four kinds of property that can be excluded under the definition of marital property. Non-marital property is defined as property that: (1) was acquired prior to the marriage; (2) was acquired by inheritance or from a gift from a third party; (3) the parties, by agreement, excluded as marital property; or (4) is directly traceable to other sources.
For example, if Wife purchased a car before she married her Husband, the car would be considered non-marital property because it was purchased or acquired before the marriage. Likewise, if Wife inherited a car from her grandmother before she got married, the car would still be considered non-marital property. If Wife purchased the car during her marriage but she and Husband executed a written agreement that the car would be her separate property, then it also can be defined as non-marital property.
What if Wife sold the car prior to getting married to her Husband but used the proceeds from the sale to buy a diamond ring for herself on her third wedding anniversary? Because the purchase of the diamond ring is directly traceable to other sources (i.e., the proceeds from the sale of the non-marital car), it remains her separate non-marital property. However, what happens if Wife purchased the car before the marriage but used marital funds to pay the car note? In this scenario, the car then becomes part marital and part-non-marital property.
Equitable Distribution of Marital Property
The classification of marital and non-marital property becomes particularly important at the time of a separation and divorce. A spouse must make a timely claim for the distribution of property during the divorce proceedings, either in the complaint for the limited or absolute divorce or annulment, or in a counter complaint.
Unlike community property states, where the Court splits the marital property 50/50 between the parties, Maryland is an “equitable distribution” state and thus the division of property is governed under the Marital Property Act. Under the Act, a Maryland Court is not necessarily obligated to divide the property 50/50 between the spouses, but looks to “equitably” distribute marital property according to a fair division of the assets. This means that during a proceeding for a limited or absolute divorce or annulment, where a distribution of marital property was requested by one or both parties, a Judge has discretion to determine what is marital and non-marital property and then distribute it to the parties according to what that Judge believes is fair.
The Judge engages in a three-step process when considering the division of property during a divorce:
- STEP 1: The Judge determines what property is marital and what property is non-marital.
- STEP 2: The Judge must determine the value of the marital property. Typically, the value of a certain piece of property is determined by considering the dollar amount left over after all loans, mortgages, notes, etc. are paid.
- STEP 3: The Judge can order transfer of an interest in property or order one spouse to pay a monetary award to the other spouse to adjust the inequities between the parties. This method is particularly used when one spouse has more property than the other spouse.
It is important to note that a Judge cannot order transfer of ownership in property from one spouse to another, so the Court cannot order a spouse to transfer a deed of a home titled in that spouse’s name only to the other spouse. So for example, if the marital home is titled solely in Wife’s name, the Judge cannot order a Wife to sign the deed over to her Husband. However, the Judge can determine the value of the home and order the Wife to pay the Husband a monetary award which would reflect his fair share of interest in the home.
This is just a basic overview of how Maryland addresses issues relating to the property owned during a marriage. When these issues arise, you need to consult with an experienced divorce attorney to determine your rights and assess how the Courts will look at your situation. When you retain Howard County Divorce Attorney Fred L. Coover, Esquire, you get the benefit of his 30 plus years of training, knowledge and experience handling divorce and alimony matters in Columbia, MD. Contact Coover Law Firm, LLC today by calling us at (410) 995-1100 to schedule your free consultation.
Disclaimer: The information in this blog post is provided for general educational & informational purposes only. It is not intended to convey legal advice or serve as a substitute for legal counsel on any subject matter.