When two high-earning individuals in Maryland end their marriage, one common question they may ask during the divorce is, “Who gets what?” Unlike other states, Maryland follows an equitable distribution rule. This more nuanced approach is designed to achieve fairness based on the unique circumstances of each marriage.
In a divorce, the court will divide your assets fairly, but not always in equal halves. Understanding what qualifies as marital versus separate property is essential to protecting your financial future.
Defining marital property in Maryland
Generally, the courts treat all property acquired by one or both parties during the marriage as marital property. This can include the following:
- The family home
- Bank accounts and investment portfolios
- Retirement assets, 401(k)s and pensions
In Maryland, it does not matter whose name is on the deed or title of the property. What matters is when one or both spouses got the asset, regardless of who owns it on paper.
What counts as separate property?
Assets that remain the sole property of one spouse and are typically not subject to division. Separate property usually falls into the following four main categories:
- Acquired before the marriage
- Received via inheritance
- Gifted by a third party
- Excluded by a valid prenuptial or postnuptial agreement
Normally, courts exclude these assets during property division. However, there are instances where separate property can become marital property due to commingling.
How courts divide shared assets
If you used an inheritance to pay for a renovation on the family home or deposited it into a joint savings account, a judge may include it in the shared assets that are up for division. In Maryland, courts use the source of funds rule to track where the money came from and decide what part is marital property and what part is sole property. But if the separate money is mixed in so much that the court cannot clearly trace it, the judge may treat the whole asset as marital property.
Factors that impact equitable distribution
When determining what a fair split is, a judge considers a number of elements, including:
- Monetary and nonmonetary contributions of each spouse
- Economic circumstances of each party
- Duration of the marriage
Afterward, the judge will order a reasonable distribution of assets that fits the circumstances of the divorcing couple. Sometimes, a 50/50 split is an equitable distribution, but there are times when a 30/70 split is also fair.
Helping you plan for this transition
Distinguishing between marital and separate property is the foundation of a fair settlement when ending your marriage. Working with an experienced family law attorney can help you advocate effectively for your interests and move forward into the next chapter of your life.
