|Posted by Sarah I. Malik on April 15, 2019 at 2:50 PM|
When it comes to divorce, two things come to mind: money and kids. With kids, the issues boil down to custody (physical and legal) and child support. While these are not easy topics to tackle, they are usually better understood by parents beginning the divorce process.
Property, wealth and income, however, are often difficult to understand when determining how they all play out in your divorce. There are three things to understand and categorize when thinking about the $ side of a divorce: Income/earnings, property and debt.
First, a person’s income not only plays a role in his or her child support calculation but also whether or not they will pay or receive alimony. Alimony is agreed upon or awarded in divorces when a person’s ability to earn and be self-supporting may not be at the point to enjoy the standard of living of the parties during the marriage. So, one’s income and ability to be self-supporting at the time of the divorce is determinative of whether alimony is warranted. If it is, then the lesser earning spouse’s award of alimony – the amount and duration of alimony - will be determined based on the time needed to become self-supporting, their eventual earning capacity, their age, their health, the length of the marriage and the reason for the breakdown of the marriage. The latter factors help guide the equitable nature of the alimony award. Alimony, however, is never intended to equalize parties’ incomes and is not intended to be a lifetime pension for the receiving spouse. Alimony is intended, in most cases, to serve as an opportunity for him or her to become self-supporting.
With regard to division of property, both tangible and intangible property are central to a parties’ divorce. Most important is whether the property was acquired during the marriage. Property that was gifted to one person or an inheritance is non-marital property and therefore not subject to division. All other property – which can include bank accounts, retirement accounts, homes, cars, other tangible goods or even businesses – are marital property regardless of how they are titled. Often, people think that because a property was titled in his or her individual name (for example, a retirement account), then such an account is not subject to division and transfer to the spouse. However, that is untrue. If the property was acquired after the marriage, then it is marital. So, for example, if a retirement account was worth $50,000 at the time of the marriage and is now valued at $150,000 at the time of divorce, then the $100,000 is marital property. Similarly, contributions from non-martial funds can be excluded from the analysis of division of marital property. For example, if a person contributed non-marital money toward the down-payment of a home, then that contribution remains his or her non-marital property when determining the marital equity in the home. Maryland courts are required to be equitable in division of marital prperty, not necessarily equal. If helping reach an equitable outcome regarding marital property, the court can order the spouse that has more property in his or her name pay a monetary award to the other spouse to reach a balance of marital property.
Finally, debt is also subject to some division in a divorce. Marital debt is debt which was incurred to acquire marital property and may be divided between the spouses. Spouses are jointly liable for debts in their joint names, although the Court cannot require either spouse to satisfy joint debts. Conversely, a spouse cannot be held liable for the other spouse's debts. To resolve this, the Court (if proper arguments are made) may decide that although the debt is marital (by definition) only the spouse that uses the card will be obligated or the court may decide that they will offset property to cancel a portion of the debt.
Categories: Maryland Family Law