What Happens if Divorcing Spouses Cannot Agree on Property Division?

In terms of property division during a Maryland divorce, it is increasingly common for the spouses to enter into a marital separation agreement. By negotiating the exact distribution of all marital property, the spouses can avoid a potentially ugly battle in court.

If the spouses cannot come to a mutual agreement concerning their shared property, then the Maryland courts step in. Unlike other jurisdictions — where the courts simply divide all marital property in half — the Maryland courts have an analytical framework for determining a fair and equitable distribution.

In order to understand how the Maryland courts make such a decision, the following sections will explore a three-step process for property division.

Step 1: Marital Property vs. Non-Marital Property

In the first step of this process, the Maryland courts must distinguish between marital and non-marital property. This is necessary because the courts can only divide marital property during a divorce.

Under Maryland Family Law Code Section 8-201, marital property refers to property the spouses acquired during their marriage. If the spouses entered into an agreement together for a future benefit, that may qualify as marital property as well.

On the other hand, the Maryland courts cannot interfere with non-marital property during a divorce. Under Section 8-201, the term non-marital property includes:

• Property acquired before marriage;
• Property received as a gift or inheritance; and
• Property excluded by a valid agreement.

Step 2: Valuation of Marital Property

Under Maryland Family Law Code Section 8-204 the court must determine the value of all marital property, with the exception of certain retirement benefits which might be subject to division as each retirement payment is made in the future per a qualifying court order. 

Step 3: Factors for Equitable Property Division

In the second step of the process, the Maryland courts analyze a series of factors to ensure a fair and equitable distribution of property. Under Maryland Family Law Code Section 8-205, there are 11 factors in this analysis, including the:

• Monetary and non-monetary contributions each spouse made to their family;
• Value of existing property interests of each spouse;
• Economic realities of each spouse;
• Reasons for which the spouses are pursuing a divorce;
• Length of time the spouses were married;
• Age of each spouse;
• Physical and mental health of each spouse;
• Efforts of each spouse in acquiring marital property;
• Contributions of each spouse in securing real property; and
• Amount of alimony or other support payments.

Section 8-205 also allows the Maryland courts to rely on any other factors deemed necessary to achieve fairness or equity.  The Maryland courts decide whether to grant a monetary award, transfer property interests or both.  The court decides how much money to award either spouse. Additionally, Section 8-205 allows the court to transfer a property interest in:

• Pensions;
• Retirement plans;
• Personal properties;
• Profit-sharing plans;
• Deferred compensation plans; or
• Real properties owned jointly by both spouses.

Let Us Help You with Your Case

If you have legal questions about property division in Maryland, it can be extremely valuable to discuss your situation with a dependable family law attorney. Based in Bel Air, Maryland, the attorneys at Schlaich & Thompson, Chartered have more than 55 years of combined legal experience in family and criminal law. If you need legal help, contact us today for an initial consultation.

Resource:

mgaleg.maryland.gov/webmga/frmStatutesText.aspx?article=gfl&section=8-201&ext=html&session=2017RS&tab=subject5