Maryland Divorce Lawyer Blog
When you divorce after many decades of marriage, you may have numerous assets to divide. There may be houses, cars, 401(k)s, and more. This process, if contested in court, may involve presenting arguments regarding marital versus non-marital property, commingled assets, and monetary awards. To ensure you walk away from your divorce with a fair outcome, you owe it to yourself to go into your divorce hearing properly armed, which includes having an experienced Maryland divorce lawyer represent you.
The divorce case of a Talbot County couple illustrates this reality.
Richard and Laura married in 1993, then eventually divorced in 2022. The couple successfully worked together to settle several divorce issues, including the sale of their business and the disposal of the marital home.
Other issues, however, remained in dispute. One of the largest was the proper classification of the husband’s 401(k) account, which had a value of nearly $900,000. Another was the couple’s Ameritrade account. Although the couple owned the Ameritrade account jointly, it contained the proceeds of a stock plan that the husband moved to Ameritrade when he lost his job with T. Rowe Price in 2001. (The Ameritrade account also contained considerable marital assets.)
Despite the husband presenting expert evidence that purported to show that part of the Ameritrade account was non-marital, the court rejected this argument. The court ultimately concluded that the couple, by putting the non-marital stock into a joint account that also had jointly owned stock, had engaged in commingling assets. The Ameritrade account, according to the court, was so extensively commingled that it deemed it to be 100% marital.
On the other hand, the court also determined that a “monetary award of $120,000 is appropriate as an adjustment of the parties’ equities in marital property, particularly the 401(k).”
The wife appealed, but was unsuccessful.
The appeals court, in upholding the trial judge’s decision, noted that there is a three-step procedure for deciding to grant a spouse a monetary award. First, the judge must identify each asset as marital or non-marital. Second, the court must assign a value to each asset. Third, the judge “may transfer ownership of an interest in property . . . grant a monetary award, or both, as an adjustment of the equities and rights of the parties concerning marital property, whether or not alimony is awarded.”
The Influence of Maryland’s Statutory Factors
The law requires the trial court to give one spouse a monetary award if simply distributing assets by title would result in an unfair result. In that scenario, the monetary award serves to rectify an otherwise inequitable result. Before the trial court makes a decision about the equities, Maryland law says it must consider a set of 11 factors listed in Section 8-205(b).
Those factors required a monetary award to recognize the non-marital contributions the husband brought into the marriage, according to the court. That included his 401(k), which had “considerable value” and had not been commingled like the Ameritrade account had been. As a result of those elements, the trial judge decided that it “would be unfair, unjust and inequitable not to grant a monetary award to the husband given his non-marital contributions to the marriage and its overall marital property.”
The appeals court agreed. The court noted that the eighth of the 11 factors says allows a judge to consider “how and when specific marital property or interest in property… was acquired, including the effort expended by each party in accumulating the marital property or the interest in property…, or both.” The court explained that this factor allows the court to credit a spouse “brought specific marital property into the marriage,” which is what happened in this case. The trial judge “altered the award from a 50/50 split in order to account for the pre-marital assets that [the husband] brought into the marriage, which was a proper fact for the court to consider.”
The process of distributing a marital couple’s assets and balancing the equities can be wide-ranging and complex. To ensure you get through the process and arrive at an outcome that adequately protects you, get in touch with the knowledgeable Maryland family law attorneys at Anthony A. Fatemi, LLC. Contact us today at 301-519-2801 or via our online form to set up your consultation and find out how we can help you.