In elementary school math class, students begin learning about the “order of operations.” This concept governs the sequence in which to complete various mathematical operations in pursuit of the correct solution. In divorce law, we have something similar. Maryland divorce law lays out a specific sequence of mathematical steps to use in calculating the marital and non-marital interests in a property. These computations — and the correct performance of them — can have a major impact on the outcome of your divorce. To make sure you are getting a fair judgment, you need to ensure the court has all the relevant facts. An experienced Maryland divorce lawyer often can provide essential assistance in doing that.
Just like how solving a math equation without following the order-of-operations rules will result in a wrong answer, doing the mathematical steps for calculating marital interest in the wrong order similarly will yield an errant result… one that’s subject to reversal on appeal.
The recent divorce of one Calvert County couple is a good example. J.S. and H.S. married in the summer of 2014. Five months earlier, the husband had purchased a six-bedroom home for $450,000, paying $160,000 down.
In the summer of 2022, the husband filed for absolute divorce. In October of that year, the court issued its judgment, ordering the husband to pay the wife a monetary award of $181,000. The husband appealed, arguing that the trial court miscalculated the marital and non-marital portions of the residential home.
The husband was correct, according to the Appellate Court.
The 4-Step Computation Process
The Maryland Supreme Court created the rules for performing this computation in 1984. The court instructed that, if one spouse makes a down payment on a property using non-marital funds, but both spouses sign a mortgage financing the remaining amount, then the fraction of the total purchase price that the down payment represents is the portion of the property that’s non-marital.
Put in concrete numerical terms, say a couple purchased a home for $400,000, paying a down payment of $100,000 and mortgaging the remaining $300,000. If the $100,000 comes from one spouse’s non-marital assets and the mortgage was an obligation held by both spouses, then the home is 25% non-marital property and 75% marital property.
That is just the first step. As the Supreme Court explained, there are three more steps. They involve:
- 2. multiplying the percentage of non-marital interest by the current fair market value to get the current non-marital asset dollar figure,
- 3. subtracting that figure from the fair market value to get the amount of gross marital property, and
- 4. subtracting from the gross marital property figure the amount of marital debt to get the amount of net marital property.
In the Calvert County case, the court correctly divided the husband’s $160,000 down payment by the $450,000 purchase price to reveal a 35.55 non-marital percentage. The trial court should have next multiplied that 35.55% figure by the home’s fair market value ($520,000) to yield a non-marital amount of $184,860. By subtracting the marital debt at the wrong juncture, the trial court incorrectly arrived at just $100,671 for the husband’s non-marital interest.
As a result, the husband was entitled to reversal and a recalculation of his non-marital interest in the home and, by extension, a recalculation of the wife’s marital award.
Divorce cases can turn on very subtle distinctions. Many times, those seemingly small differences are factual. Sometimes, those details are matters of law. Either way, your case deserves a trained eye with a keen attention to detail. the skilled Maryland family law attorneys at Anthony A. Fatemi, LLC are here to help. Whether your absolute divorce case turns on alimony, property division, or other issues, we have the knowledge and experience to help you achieve a fair outcome. Contact us today at 301-519-2801 or via our online form to set up your consultation.