Blog Post

Who Gets What? Divorce and Property Distribution

Next to child custody, splitting the property at the end of a marriage is one of the most contentious issues that come up in a divorce. Maryland divorce law on division of assets has some clear guidelines, and there are grey areas, complications, and pitfalls that need to be understood as well. Working with a skilled, experienced divorce attorney in Maryland is an important way to protect your assets, but knowing the basics is an important first step.


Only Marital Property is Split

Every state has different rules about what property does or doesn’t belong equally to a married couple, and Maryland is no different. However, some property is exempt from the marital “estate,” so the other spouse doesn’t have the right to it. Property or assets that a person received as a personal gift (i.e., not to the couple, but to the individual), as a trust beneficiary, or as an inheritance are non-marital property. Property that a person owned before the marriage is non-marital as well. Most of these assets are obvious, but sometimes, it can be unclear if a gift is intended for the individual or the couple, or some other nuance makes it a source of a fight. One major fight can be over the engagement ring or other gifts between the spouses. If this is an issue in your relationship, you should consult with an attorney about your rights. 


Be Careful of Co-Mingling!

When a non-marital asset is mixed in with marital assets, it can become partly or wholly a marital asset. For example, if someone owns a home before getting married, and then they use martial funds to pay the mortgage, the other spouse has a right to some of the value of the house.  Another example is “co-mingling” – when a person puts non-marital assets into a joint account, the other spouse can claim a right to some or all of these assets as well. One of the most complicated financial investigations and calculations that can happen in a divorce is “tracing” the non-martial assets to carve it out of the marital estate. Working with a forensic accountant and other expert professionals may be critical to protecting your rights to the asset, whether you are the original owner, or the spouse making a claim on the property.


So What is Marital Property?

Marital property is defined as all property acquired by a couple during the marriage. This includes income, business and investment assets, and anything purchased from marital assets. So, for example, a spouse might buy themselves a sailboat that the other spouse never wanted or used, but by using marital assets, both spouses are entitled to the value of the boat. It can be a source of bitterness between a divorcing couple if one was a higher earner than the other, and yet the assets are divided equally between the two. Those are the rules. The rule about something being martial property runs up to the moment of divorce, even past the point of separation. This means that financial, business, and professional matters that occur when contemplating a divorce should be managed carefully to minimize their inclusion in the marital estate. 


Ok, it’s Marital Property, Now What?

In Maryland, the magic phrase is “equitable division of assets,” which can mean different things in each divorce. After all, a house, a car, or that pesky sailboat cannot be split in two. In addition, some assets like retirement accounts (IRAs, 401k, pensions) or other tax-beneficial investment accounts (529 accounts for education), require special treatment to be divided without penalty. Other assets, like a family business or a long-term investment, require special treatment to maximize the value and avoid penalizing third parties. There is an art and a science to collecting all of the assets, tallying their value, and making decisions about who gets what asset, which assets need to be sold and the proceeds split, and other “equitable” ways of dividing the accumulated wealth of the married couple. No one methodology is demanded for the division of assets under Maryland divorce law, so the key is to be thorough, creative, and reasonable in putting together the plan for division.

Malech Law is located in downtown Bethesda, Maryland. For more than 25 years, Mr. Malech has provided aggressive and effective representation for his clients in Maryland and the District of Columbia. This year, he was selected as the Best of Bethesda 2022 Readers’ Pick for Best Family Law Practitioner. He has also been given the Lawyers of Distinction Award Recognizing Excellence in the Area of Divorce and Family Law for the past three consecutive years and has just been recognized as a Family Law Top 10 Attorney for 2021 by “Attorney and Practice Magazine.”

Visit Malechlaw.com or call (202) 441-2107.

Back to Blog Menu

    home-icon-silhouette remove-button instagram twitter linkedin phone-call plus chevron-arrow-down