The Circumstances and Standards Under Which One Spouse Can Receive a Monetary Payment as Part of a Divorce in Maryland

cashDistributing marital property can be one of the most complex elements of any divorce, especially one in which minor children are not involved. Sometimes, in order to achieve a genuinely equitable outcome, it may be necessary for a trial judge to order one spouse to make a monetary payment to the other. There are certain rules that govern monetary awards, though, and if they are not followed, the spouse ordered to pay may be entitled to get the order thrown out. All of these concepts and litigation strategies highlight how having an experienced Maryland property division attorney can provide a substantial benefit to you in your divorce case.

The divorce of Samuel and Joyce, a couple who separated after nearly 30 years of marriage, was an example of a monetary award case that ended in a successful appeal. In dividing the couple’s assets, the court concluded that, with all of the assets distributed, the husband owed the wife a monetary award of $54,000. A monetary award is something that may be ordered in some Maryland divorce cases when the distribution of assets between the spouses yields an outcome that is not entirely equitable. Requiring one spouse to pay the other a certain sum of money thereby “evens the scales” and achieves the equitable outcome required by the law.

In order to order a monetary award, the trial judge has to do several things and consider several factors. Maryland has created a three-step process to be used to determine if a monetary award is appropriate. First, the judge must divide assets into the categories of marital and non-marital. Second, the judge must assess the value of all of the assets that are determined to be marital. Third, the court must decide if dividing the assets “according to title” would be unfair to one spouse.

In Samuel and Joyce’s case, there were several mandatory steps in this protocol that were missing. Even though the court had concluded that each spouse would keep his or her own pension, the trial court was still obligated to assign values to each spouse’s pension. Maryland law has “two accepted methods for determining the value of a pension:  (a) calculate the employee’s contributions to the pension plus accrued interest, or (b) use actuarial methods to compute the present value of the future benefits.”

In cases in which the trial court decides to divide the spouses’ pensions by proportionate share, the court is not required to set values for the pensions. However, in a situation in which each spouse is keeping his or her own pension, and the court is ordering a monetary award to make up for the difference between those two accounts, a valuation of the two pensions is essential in order to determine if the distribution and the amount of the monetary award make for a truly equitable result. Since there was no valuation of the pensions, the husband was entitled to a reversal of the trial court’s decision awarding a monetary award to the wife.

For reliable representation in your asset distribution or divorce case, reach out to experienced Maryland family law attorney Anthony A. Fatemi. Our office has been helping clients achieve beneficial results in their family law cases for many years. To find out how we can help you, contact us at 301-519-2801 or via our online form.

More blog posts:

Divorce Over Age 50 Raises Unique Financial Concerns for Maryland Residents, Maryland Divorce Lawyer Blog, April 27, 2016

Maryland Court Reviews Wife’s Request for Certain Pension Benefits in Divorce, Maryland Divorce Lawyer Blog, May 14, 2015

Photo Credit: pasja1000, [CC0 License], via Pixabay

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