Marital Property: Dividing In Divorce

Dividing Property in Divorce: The 9-207 & The Marital Award

One of the most common and most important issues in divorce is the division of property. Upon marrying, parties acquire property throughout the marriage. This is called marital property. Marital property is defined as all property acquired in marriage regardless of how it is titled, except for gifts and inheritances. Often, parties also have existing property that they acquired before marriage. This could include real property (such as a condo, where the party was the landlord) or personal property (family heirlooms, for example). This is referred to as non-marital property. Parties may agree or disagree how the property is classified – marital or non-marital. They may also agree or disagree as to the value of property.

In a final divorce decree, the court will spell out how property is divided. To accomplish this, it must first assess all the property at issue. To help streamline this process, the law requires the parties to submit what is commonly called a 9-207. (It is called this in reference to Maryland Rules, Rule 9-207, Joint Statement of Marital and Non-Marital Property.) Both parties submit to the court, jointly, their assertions of property, including whether it is marital or non-marital property, how it is titled, its fair market value, and any “liens or encumbrances” (such as, the amount owed on the mortgage on a home). The following is a hypothetical scenario to demonstrate how this process may work:

Husband and Wife are seeking a divorce after 4 years of marriage. Husband and Wife live in a home they purchased after getting married. The house is valued at $500-600,000, but has $400,000 remaining on the mortgage. Before marriage, the Husband had a real estate investment in a condo with a value of $65,000. The condo was fully paid for before the marriage, and he received rental income before and during the marriage. Wife, before being married, was bequeathed stocks worth approximately $40,000 from her father. She also received jewelry from her grandmother valued at approximately $10,000. During marriage, the couple purchased a timeshare on the beach for $15,000, for which they paid in cash. On the market, the timeshare might currently fetch $12-14,000. Husband started an individual retirement account (IRA) at his Wife’s encouragement after marriage, which is currently valued at $15,000. Wife has a 401(k) with her new job and has since saved $20,000. Sometime during the marriage, Wife received a painting from her long-lost uncle who left it to her in his will. The painting has value approximated at $2,000. Husband never really cared for the painting, so Wife hung it in her office at work. Finally, Husband and Wife have a joint savings account at the local bank with savings of $18,000.

Here’s what their 9-207 might look like applying the above facts:

1. The parties agree that the following property is “marital property” as defined by Maryland Annotated Code, Family Law Article 8-201:

Description of Property

How Titled

Fair Market Value

Liens, Encumbrances, or Debts Directly Attributable

Husband’s Assertion

Wife’s

Assertion

Husband’s Assertion

Wife’s

Assertion

Husband’s Assertion

Wife’s

Assertion

123 Main St., Columbia, MD 21045

Joint

Joint

$575,000

$500,000

$400,000

$400,000

Beach Timeshare

Joint

Joint

$12,500

$14,000

None

None

Husband IRA

Husband

Husband

$15,000

$15,000

None

None

Wife 401(k)

Wife

Wife

$20,000

$20,000

None

None

Savings Account

Joint

Joint

$18,000

$18,000

None

None

2. The parties agree the following property is not marital property because the property (a) was acquired by one party before the marriage, (b) was acquired by one party by inheritance or gift from a third person, (c) has been excluded by valid agreement, or (d) is directly traceable to any of those sources:

Rental Condo

Husband

Husband

$60,000

$65,000

None

None

Wife’s Stocks

Wife

Wife

$40,000

$40,000

None

None

Wife’s Jewelry

Wife

Wife

$15,000

$8,000

None

None

3. The parties are not in agreement as to whether the following property is marital or nonmarital:

PaintingJointWife$2,500$2,000NoneNone

As you can see above, the respective parties both assert what they agree is marital property, what is not marital property, and on what property they are not in agreement as to whether it is marital or non-marital. Some of the asserted property values can be more easily obtained than others. For example, a bank statement can provide the value of a savings account whereas the value of a vacation timeshare on the beach is based on market conditions and appraisal, subject to variation in value. In accordance with the Rule, the two parties are required to share their assertions with one another before ever filing the joint statement with the court. (This does NOT mean the parties will necessarily agree on everything – as also shown above.) Attorneys will acquire financial statements and records through a process called Discovery to support their position on what is and what is not marital property. The attorneys will then compile the information, manage requests for more information, and seek to ensure that all proper financial information has been disclosed as required under the Rules.

Based on the information provided and the facts presented before them, the judge will have the final say on a marital award which is awarded to one party and meant to balance the equities between the two parties.

Fred Antenberg is an attorney in Columbia, Maryland who handles divorce and family law issues in Howard County, Maryland and surrounding counties. Call Fred at 410-730-4404.