What Is Marital Property?
Marital Property is Acquired During Marriage
Under Maryland law, if parties in a proceeding for absolute divorce or annulment do not reach an agreement on how they will divide their property, the Court will determine property division. First, the Court will determine which property is “marital” property. Under Md. Code Ann., Family Law § 8-201(e), marital property is defined as all property acquired by one or both parties during their marriage, regardless of how assets are titled. If the parties have any marital property, the court will then determine its value.
Marital property includes:
- Salary, wage earnings, bonuses, commissions, and profits
- Pensions, retirement plans, and stocks
- Real estate acquired during the marriage
- Personal property like vehicles, furniture, and jewelry
- Appreciation in non-marital property due to active intervention and management
- Gambling and lottery winnings
Keep in mind that property acquired while a divorce case is pending, and the parties are separated, is still considered marital property.
Marital property does not include:
- Property owned or acquired before the marriage
- Anything acquired by gift or inheritance from a third party after the date of marriage in the name of one spouse
- Property excluded by valid agreement (e.g. joint property statement or prenuptial agreement)
- Assets directly traceable to non-marital sources. For example, if a property is acquired during a marriage with money that can be directly traced to a non-marital account, the property remains non-marital.
- Passive appreciation of a spouse’s non-marital property (i.e. where it increases in value merely due to time and market forces) during the marriage
- Personal injury lawsuit awards
- Professional licenses or degrees
In some situations, property may be partly marital and partly non-marital. For example, where one or both spouses actively worked to improve non-marital property, the increase in value would be considered marital and subject to equitable distribution. Another instance would be where a person purchases a home before getting married, but then marital funds are used to pay the monthly mortgage.
Maryland is an “equitable distribution” state. In a proceeding for absolute divorce or annulment, Maryland courts are authorized to make an equitable distribution of marital property in order to avoid an unfair result if one spouse owns less than an equitable portion of such property. This can be accomplished through transferring property interests or making a monetary award from one spouse to the other. Equitable distribution does not necessarily mean marital property is divided exactly 50/50. Rather, Maryland law seeks to avoid an unfair or inequitable division of property.
Under Md. Code Ann., Family Law § 8-205(b), judges must weigh several statutory factors in determining an equitable distribution:
- Age of each party
- Physical and mental condition of each party
- Economic circumstances of each party (for example, their education level and employment prospects)
- Duration of the marriage
- Monetary and non-monetary contributions of each party to the well-being of the family
- Value of all property interests of each party
- Circumstances that contributed to the estrangement of the parties
- Any award of alimony and any award or other provision that the court has made with respect to family use personal property or the family home
- How and when certain types of marital property (such as retirement plans, family use personal property and the parties’ primary residence) were acquired, including the effort expended by each party in accumulating such property
- Contribution by either party of non-marital property to the acquisition of real property held by the parties as tenants by the entirety
Contact an Experienced Maryland Divorce Law Attorney
If you are considering divorce, are separated, or your spouse has filed for divorce, it is important to hire an experienced attorney that can protect your rights. For years, Bethany G. Shechtel, Esquire has been by her clients’ side, guiding them through the divorce process. To learn more, contact BGS Law, LLC today.