Property Disposition in Divorce
Topics on this page
- Marital Property and Non-Marital Property
- Part Marital and Part Non-Marital Property
- Property Distribution By Agreement
- Property Division by Court Action
- Title Transfers
- Real Property
- Property Inventory
Marital and Non-Marital Property
With a few important exceptions, “marital property” is all the property that you or your spouse acquired during the marriage. Marital property also includes most of the property that you or your spouse acquired “individually” during the marriage. Marital property normally includes things such as your and your spouse’s bank accounts, houses, businesses, cars, furniture, appliances, stocks, bonds, jewelry, pensions, retirement plans, and IRAs acquired during the marriage.
The following are not marital property, even if you or your spouse acquired the property during your marriage:
- A gift to only one of you, from a third party;
- Something that only you or only your spouse inherited;
- Something that you and your spouse agreed would not be marital property, or was bought with money from a gift, an inheritance, or money that you agreed was not marital property.
If you and your spouse commingle (put together) non-marital and marital funds (money), anything you buy with the commingled funds is marital property. Commingled funds are no longer “directly traceable” to a non-marital source, so anything bought is marital property. Learn more about marital and non-marital property.
Read the law: Md. Code, Family Law § 8-201
The phrase “during your marriage” refers to the period from the date of the marriage until the date the marriage is dissolved (usually by divorce or death). Property that you or your spouse acquire while you are separated is still considered marital property. However, if two people acquire property while living together before marriage, that property is not marital property.
Read the case: Williams v. Williams, 71 Md.App. 22 (Court of Special Appeals, 1987)
Part Marital and Part Non-Marital Property
Some assets can be both marital and non-marital property. For example, a house that was purchased before the marriage is not marital property. However, during the marriage, if you and/or your spouse use marital funds to pay the mortgage, the house then becomes part marital and part non-marital, in proportion to the payments made with marital funds. Learn more about marital and non-marital property.
Real property (such as land or a house) that is held by “tenants by the entireties” is considered marital property unless you and your spouse have a valid agreement to exclude it.“Tenancies” are a legal concept that describes how the owners hold the property and the different benefits and legal rules that result (such as what happens when one owner dies, how can the property be sold, etc.). Learn more about joint ownership of real property.
Read the law: Md. Code, Family Law § 8-201(e)(2)
Property Distribution By Agreement
The parties may agree on the division of any property held by them without assistance of the court.
Property Division by Court Action
If the parties do not have an agreement, Maryland's Marital Property Act governs the division of property. Under the act, all marital property is subject to equitable distribution. If you and your spouse cannot agree how to divide your property, the court will decide what is marital property, and how much that property is worth. The court will also look at any marital debts (for example, mortgages and credit cards) when determining the value of the marital property.
Read the law: Md. Code, Family Law § 8-203, § 8-204
The court will then determine each spouse’s share (portion) of the property. To determine how much to award or transfer to each party, the court will consider the following factors:
- how much each party contributed to the well-being of the family (this includes income, but also contributions such as one spouse caring for the married couple’s children, or doing housework and cooking for the family);
- how much each party’s property is worth;
- the economic circumstances of each party at the time the court makes the award;
- why the parties are seeking divorce and how they got there;
- how long the parties were married;
- the age of each party;
- the physical and mental condition of each party;
- how and when the parties acquired specific marital property, including how much effort each party expended to accumulate the marital property;
- how much each party contributed to acquiring the real property (for example, land or a house) held by the parties as tenants by the entirety;
- any award of alimony or other court award about family use personal property (such as a car), or the family home; and
- any other factor that the court considers necessary or appropriate to consider to arrive at a fair monetary award or transfer of property.
Read the law: Md. Code, Family Law § 8-205
“Title” means the legal right to control and get rid of the property – if you have title to something, you own it. “Title” also can describe an official document that states who owns the property.
The court cannot transfer marital property titled in one spouse's name to the other. Instead, the court will award money to the spouse who doesn’t have title, to cover his or her share of the property. However, the parties may agree and take steps to transfer this property on their own in and as a result of a marital agreement.
For example, if a husband owns $10,000 worth of stock titled in his name and purchased with his salary earned during the marriage, that stock is marital property. The court has no authority to transfer the stock or any portion of it to the wife. It can, however, take into account the factors listed above and grant a monetary award to the wife based on the value of the stock. The court is not required to award 50% of the value of the stock or any set percentage. The amount of the award and the method of its payment are determined after consideration of each of all of the above listed factors. This area of the law is very complex. If there are property interests, advice from an attorney is essential.
Read the law: Md. Code, Family Law § 8-205
If the property cannot be divided physically (such as a house), the court will determine a value based on evidence the parties present to the court.
There are several options available for real property. One person can “buy out” the other person as long as both parties agree. If the parties cannot agree, the court may order that the parties sell the property and divide the proceeds. In Maryland, the court does not decide what to do about the marital assets to be divided.
Make a Detailed List to Help You Inventory the Property
Even if you think your situation is simple, it’s essential to inventory your property. Until you write down all of the property that you and your spouse own, you won’t know what’s at stake or whether you have a potential property issue. A checklist is helpful when listing your property.
Making an accurate list of all of your property is especially important if you represent yourself instead of hiring a lawyer. Take the Property Quiz if you are unsure whether you should consult a lawyer.
It may take some time to fully list all of your property but it will help your lawyer assess your situation more quickly. A lawyer can help organize your records, in addition to giving you legal advice. A lawyer can also help fill in any gaps in the records you have collected and can use certain legal tools (generally called "discovery") to uncover information from your spouse.