With a few specific exceptions, any asset acquired by either party during a marriage is considered marital property — regardless of how the asset is titled or which party purchased or earned the asset. If you are considering a divorce or marital separation, it is imperative that you discover all of the marital assets; including any assets or property in your spouse’s name or control. You may be entitled to a significant financial award if those assets were acquired or paid for (at least in part) during the marriage.
At the final divorce hearing, the judge is required to divide the marital assets. The property division laws in Maryland require the court to go through a 3-step analysis in dividing marital assets: (1) the court must identify which property is marital and which property is non-marital; (2) the court must determine the value of all marital property; and (3) the court must make an equitable (or fair) division of the marital assets.
In determining whether an asset is marital or non-marital or both, the court will examine when the asset was acquired or paid for. For example, if your spouse has a 401(K) Plan, then the Court must determine which portion of the 401(K) Plan was earned prior to the marriage (which is usually considered non-marital) and the portion of the 401(K) Plan earned during the marriage (which will be considered marital property).
The same determination of marital vs. non-marital property applies to pensions, savings accounts, investments, and real estate regardless of whose name is on the title or account. In fact, property and assets are presumed to be marital property unless a party can show that the property is not marital property – either because it was acquired by a gift or inheritance or it is directly traceable to pre-marital assets. Also, property that was originally non-marital that is comingled (or combined) with marital property may become entirely marital property.
After determining the marital and non-marital property in each party’s possession, the judge must determine the value of these marital assets. Determining the value of bank and investment accounts is relatively simple. Valuing real estate or a business is more difficult. Usually, an expert witness must testify about the value of any real estate or business. A real estate appraisal or a business valuation is provided at trial as evidence of the value of real estate or a business.
Finally, the court must make an “equitable division” (or fair division) of the marital property. While the court may divide the marital assets equally, it is not required to do so. The court divides marital assets using the factors in Maryland Code, Family Law § 8-205.
Those factors are:
(1) the contributions, monetary and nonmonetary, of each party to the well-being of the family;
(2) the value of all property interests of each party;
(3) the economic circumstances of each party at the time the award is to be made;
(4) the circumstances that contributed to the estrangement of the parties;
(5) the duration of the marriage;
(6) the age of each party;
(7) the physical and mental condition of each party;
(8) how and when specific marital property or interest in property described in subsection (a)(2) of this section, was acquired, including the effort expended by each party in accumulating the marital property or the interest in property described in subsection (a)(2) of this section, or both;
(9) the contribution by either party of property described in § 8-201(e)(3) of this subtitle to the acquisition of real property held by the parties as tenants by the entirety;
(10) any award of alimony and any award or other provision that the court has made with respect to family use personal property or the family home; and
(11) any other factor that the court considers necessary or appropriate to consider in order to arrive at a fair and equitable monetary award or transfer of an interest in property described in subsection (a)(2) of this section, or both. Id.
When a spouse tries to hide marital assets by giving assets to a friend or family member, the court may determine that the assets were fraudulent dissipated and credit the value of that asset to the spouse who gave it away or hid it. The court may also order a spouse to pay a monetary award (or money judgment) to the other party when there has been a fraudulent transfer of assets (or where one party is in possession of the majority of marital assets).
Before a Court can determine, value and divide any marital assets, the assets have to be located. A process called “discovery” allows a party to discover information (by subpoena and other methods) from the other party. Typically, each party will be required to provide bank and investment account records, cell phone and credit card statements, business and real estate records, and any other document that may lead to the discovery of relevant evidence.
Having an experienced attorney helping you through the divorce process — to discover and assert your rights to marital assets and property — is imperative. Once the court divides the marital property at the divorce hearing, the division is usually permanent. Knowing how and where to find and value assets could cost you a great deal if not done correctly. Contact us at McMillan Metro for an initial consultation about finding and dividing marital assets and property.