This term has significant importance in 90% of divorces.
Marital property is all property acquired during the marriage from the date of the marriage to the date of divorce except for gifts or inheritances from a third person. Non-marital property is the opposite of marital property and often it has the following characteristics: it was obtained before the marriage or it was inherited or gifted to a spouse before or after the marriage. Also Maryland permits parties to sign agreements called pre-nuptial and post-nuptial agreements that waive or modify the right to equal division of marital property. Real property, such as the marital residence, becomes marital real property and when titled as ‘’ Tenants by the Entireties’’ is subject to an equal division, but may have another result where one spouse used non-marital funds such as savings to place a large down payment on the home. The courts may consider an equitable theory called the ‘’adjustments of the equities’’ to provide a larger share to the spouse who made the larger down payment. However, if the down payment was made 20 or more years ago, the courts may proceed on a 50/50 division. The number of 20 is not the dividing point and other factors such as the down payment amount and other equitable factors are applied. Marital property includes earnings of the spouses that may have been placed in a separate account of the wage earner. One problem that is often faced by parties is the comingling of marital and non-marital property. Here is an example: Spouse Fred has over $80,000 in stocks that were purchased before the marriage in an account solely in Fred’s name. Over the duration of the marriage, Fred deposited 25% of his weekly salary in his name into the brokerage account. As stated, the weekly earnings that were received when Fred was married to Helen is marital property. The further complication is that Fred’s $80,000 brokerage has increased from the original $80,000 and also from the 25% of his marital earnings. The courts have the impossible task of separating the two sources and frequently treat it as marital property and do not make a separation of what was marital and what was non-marital. In other instances where the analysis is simpler, the courts do make a division when determining which of the property is marital and which is non-marital.
The courts utilize specific factors in determining an equitable division of marital property. Many clients come to our offices with varying beliefs concerning what their equitable division should be. Records of past purchases and the identification of witnesses to the purchases are important information and this information should be brought to our offices. Our goal is to inform you regarding reasonable and achievable objectives and a strategy to obtain results. Initially there is significant gathering of information relating to assets and liabilities, including tracing or locating assets that may have been converted, diverted, or diminished. The courts do not favor a spouse whose behavior is an attempt to prevent the other spouse from receiving a fair and equitable division of marital property.
During litigation of the divorce lawsuit, the courts have forms that the litigants are required to complete and present along with a detailed summary of their case with issues raised and relief sought as well as listing all marital property and non-marital property. This information is available at a court required Settlement Conference. At the settlement conference, judges attempt to resolve the differences of the parties. Also, before the settlement conference, parties are often required to attend at least two two-hour mediation sessions. Mediation may be the best vehicle in resolving not only financial matters but also other important issues such as child custody and support.
Court orders often, in the division of marital property, provide for delayed division of real property assets. One example is the award of exclusive use and possession of the marital residence to protect the children in a stable environment for three or more years. Also, parties may stipulate that marital homes will be sold at a future date. This may be due to the fact that the real estate market is depressed or that the parties have little or no equity in the real property. In that event, if the house were sold immediately, they would be required to bring thousands of dollars to the settlement.