Maryland Divorce Lawyer Blog
A married couple’s financial portfolio is often a fluid and dynamic thing, constantly changing over time. That includes the time between separation and a final divorce judgment. For assets you acquired during the period of separation, the law generally deems them to be marital assets. Still, it may, when it is time for a court to reach equitable distribution and monetary award decisions, treat them differently than assets you acquired pre-separation. If you have questions about equitable distribution and assets acquired during separation, you should speak to a knowledgeable Maryland divorce lawyer.
A recent divorce case from Anne Arundel County provided the Appellate Court with an opportunity to educate readers about how the equitable distribution and monetary award processes work, as well as when a marital asset may not be subject to equitable distribution.
The case involved a couple who divorced after more than 20 years of marriage. Both spouses filed, but the wife filed first. The wife asked for indefinite alimony and a monetary award, among other things.
The trial judge awarded the wife alimony, but limited it to three years of rehabilitative alimony at $2,500 per month. The judge also gave the wife a monetary award of $55,114. Both spouses appealed the judge’s decision. The appeals court reversed the trial judge’s order, not necessarily because of the outcome the court reached, but because of how it went about getting there.
Under Maryland law, trial courts in divorce cases involving monetary awards must follow a three-step process to determine if an award is appropriate and, if so, to set the amount. The first step is to declare each asset as non-marital or marital. The second step requires the court to assign a value to each marital asset. The final step requires the court to analyze the fairness of assigning a monetary award to one spouse over the other. In completing the third step, the law requires the judge to consider a list of 11 factors listed in Family Law Code Section 8-205.
The trial court went awry in the first step. Maryland has a statute — Family Law Code Section 8-201(e)(1) — that says all property “acquired by 1 or both parties during the marriage” is marital property. The phrase “during the marriage” encompasses everything from the wedding day to the date a court issues a divorce judgment, including the period when the spouses are separated, even if they are actively litigating a divorce action and working to end their marriage.
In this case, the trial judge designated several assets the spouses acquired after the date of separation, including the wife’s investment plan and her Volvo, as non-marital. That was a mistake that required reversing the decision and sending the case back for recalculation.
Not All Marital Assets are the Same in the Realm of Equitable Distribution
In making its decision, the appeals court also emphasized that not every asset that qualifies as marital will always be subject to equitable distribution when determining a marital award. In 1993, the Supreme Court examined a case involving a Maryland husband who won a $1.1 million D.C. Lotto jackpot. At the time of the win, the wife had already submitted her divorce papers, and the husband’s reply was pending.
The Supreme Court agreed with the wife that the winnings were marital property, but concluded that she was not entitled to share them. The facts of the case revealed “that the husband acquired the lottery ticket by expending his own time, effort, and money.” Based on that proof, the court declared that when “one party, wholly through his or her own efforts, and without any direct or indirect contribution by the other, acquires a specific item of marital property after the parties have separated,” dividing it equally may be inconsistent with the law’s intent.
When you are going through a divorce and contesting the distribution of assets and debts, you need a skilled advocate on your side. The experienced Maryland family law attorneys at Anthony A. Fatemi, LLC have been helping divorcing Marylanders for many years, ensuring that the court that hears their case has a complete and accurate picture from which the judge can make a fair and appropriate decision. Contact us today at 301-519-2801 or use our online form to schedule your consultation.