One of the most challenging and contentious issues every divorcing couple must address is how to divide mutually-owned property and assets. It can be a complicated and overwhelming process, depending on the type of property involved and the circumstances of the marriage.
Below are some basic concepts of property division in a divorce and tips on how you can protect your rights and interests during this consequential period of your life.
What is marital property and separate property?
Identifying and classifying property that belongs to each spouse is one of the first steps in the property division process. Generally speaking, there are two types of property: marital property and separate property.
Marital property is classified – with some exceptions – as any property that was acquired by either spouse during the marriage, regardless of whose name is on the title or deed. This can include real estate, vehicles, furniture, bank accounts, retirement accounts, stocks, bonds, businesses and debts. Marital property is usually divided when a couple decides to split.
Separate property is (generally) any property that was owned by either spouse before the marriage, or that was received as a gift or inheritance during the marriage. It also includes any property that was agreed to be separate by a valid prenuptial or postnuptial agreement.
How is marital property divided?
In Maryland, marital property is divided fairly but not necessarily equally in the event of a litigated divorce. A couple that is able to reach an agreement out of court can divide its property however it chooses. In the event of litigation, the court will consider various factors, such as each spouse’s contributions, their financial circumstances, age and health and the needs of any dependent children. The goal is to achieve a fair distribution of assets and liabilities, taking into account the specific circumstances of the case.
Tips to protect your financial interests
It is advisable to prepare yourself accordingly before divorce to avoid getting short-changed. Below are some tips that can help protect your financial interests during the property division process.
- Know where everything stands by taking inventory of all your assets and liabilities, including their current value and date of acquisition
- Gather all financial documents, such as bank statements, tax returns and investment records
- Consider getting in touch with a financial expert to assist in evaluating your finances and creating a realistic budget
- Avoid making hasty financial decisions
- Seek guidance to understand your rights and legal options
It is also advisable to consider alternative dispute resolution mechanisms like mediation or a collaborative divorce. You can potentially reach an amicable and mutually beneficial agreement with your spouse without going to court if this is a viable option for you.