Marital and Non-Marital Property in Maryland
With a few important exceptions, all the property that was acquired during a marriage is considered marital property. Marital property normally includes such things as houses, cars, furniture, appliances, stocks, bonds, jewelry, bank accounts, pensions, retirement plans and IRA’s. It generally does not include the value of professional degrees/licenses.
Marital Property
All property obtained during the course of the marriage is marital property, regardless of who paid for it. The exception to this general rule is property received by one spouse as a gift, inheritance from a third party, or excluded by a valid agreement. As stated above, this property is considered non-marital property. Marital property can include real estate, bank accounts, stock, furniture, pensions and retirement assets, cars and other personal property.
Read the Law: Md. Code, Family Law § 8-201
Non-Marital Property
Non-Marital Property is any property obtained prior to the marriage. It remains the property of the party who owned it prior to the marriage. Non-marital property remains non-marital as long as it is not gifted or titled to the other spouse.
Any property received by a spouse by gift or inheritance during the marriage from a third party remains the non-marital property of that spouse unless gifted or titled to the other spouse.
Property acquired by the two of you during a period you lived together before marriage is not considered marital property.
If the marriage is dissolved and one spouse wants to claim particular items as his or her own, the person must have proof that the property in question belongs to him or her alone. A couple may acquire joint ownership in property brought to their marriage by either spouse through appropriate agreements or transfers of title.
Non-marital property is protected from the debts of the other spouse. Each party has the power to dispose of property owned by him or her alone, as if unmarried.
A married person may engage in business, make contracts, bring lawsuits, and be sued in his or her own name. Neither spouse is liable for contracts made by the other spouse in his or her name or for the debts the other spouse may have acquired prior to marriage.
Property that is Part marital, and Part non-marital
Some assets can be both marital and non-marital property.
- A house that was purchased before the marriage is not marital property. However, when you and/or your spouse use marital funds to pay the mortgage, the house then becomes part marital and part non-marital.
- Real property that is held by “tenants by the entireties” is considered marital property unless you have a valid agreement to exclude it.
Read the Law: Md. Code, Family Law § 8-201(e)(2)
Making a Claim for Property Division
If you and your ex-spouse cannot agree on how to divide your property, the court will decide what is marital property and how much that property is worth.
- The court will also look at any marital debts when determining the value of the marital property.
- The court will then determine each spouse’s share of the property.
- The court will use a variety of factors (see below) to decide the relative value of each spouse’s share of the marital property.
- Under the Maryland Marital Property Act, the court can consider both the monetary and non-monetary contributions of each spouse to the marriage.
- Non-monetary contributions can include childcare, meal preparation, maintaining the home, etc.
- The court cannot transfer property titled in one spouse's name to the other. Instead, the court will give the spouse without title a monetary award to cover their share of the property.
- If the property cannot be divided (such as a house), the court will decide on a value.
- One person can “buy out” the other person as long as both parties agree to it.
- Otherwise the asset may be sold and the funds divided.
- In Maryland, the court does not decide what to do about the marital assets to be divided.
CRAWFORD CREDITS
In Baran v. Jaskulski, 114 Md. App. 322, 328-32, 689 A.2d 1283 (1997), the Court explained the origin and meaning of the term "Crawford credits," and presented the following definition, id. at 332:
"Crawford Credits--the general law of contribution between co-tenants of jointly owned property applies when married parties, owning property jointly, separate. A married, but separated, co-tenant is, in the absence of an ouster (or its equivalent) of the nonpaying spouse, entitled to contribution for those expenses the paying spouse has paid."
The Court of Appeals considered the concept of contribution in divorce cases in the case of Crawford v. Crawford, 293 Md. 307, 443 A.2d 599 (1982), from which the term "Crawford credits" is derived. There, the Court expounded on the "general law of contribution that applies to co-tenants. . . ." Id. at 309.
It said: "Generally, one co-tenant who pays the mortgage, taxes, and other carrying charges of jointly owned property is entitled to contribution from the other." Id.
The Court explained that the doctrine of contribution is equally applicable to a married couple, and such credits are given to the spouse who pays the mortgage, taxes, etc. especially during a separation or divorce.
Limitations on Jointly Owned Property
Property jointly owned by husband and wife cannot be sold by one without the consent of the other. The creditors of one spouse may not make a claim to it. However, a creditor of both parties may move against property jointly owned.Division of Property
Agreement of the Parties
The parties may agree on the division of any property held by them without the assistance of the court.
Equitable Distribution by the Court
If the parties do not have an agreement, Maryland's Marital Property Act governs the division of property. Under the act, all marital property is subject to equitable distribution.
When the court makes an equitable distribution of the property, the court first determines what property belonging to the couple is marital property. It then determines the value of that property.
Finally, the court determines who is entitled to what share of the valued, marital property, taking into account the following factors:
- The contributions, monetary and non-monetary, of each party to the well-being of the family;
- The value of all of the property interests of each spouse;
- The economic circumstances of each spouse at the time the award is to be made;
- The circumstances and facts which contributed to the estrangement of the parties;
- The duration of the marriage;
- The age and physical and mental condition of the parties;
- How and when specific marital property was acquired, including the effort expended by each party in accumulating the marital property;
- Any award or other provision which the court has made with respect to family use personal property or the family home, and any award of alimony;
- Such other factors as the court deems necessary or appropriate to consider in order to arrive at a fair and equitable monetary award; and
- The contribution of either party to the acquisition of the property is also considered.
The court cannot transfer ownership of property titled to one spouse to the other. In these instances, the court will grant a monetary award to one spouse as an adjustment of the rights and equities of the parties concerning marital property. However, the parties may agree and take steps to transfer this property on their own in and as a result of a marital agreement.
Read the Law: Md. Code, Family Law § 8-205
Special Note on Pensions & Retirement Assets
Pensions can also be part of the marital property “pool.” The court has the ability to determine whether the pension should be included in the marital property and if so, what its value is.
After the court makes its determination, it can transfer ownership of an interest in a pension, retirement, profit sharing, or deferred compensation plan from one spouse to the other (or both) and/or grant a monetary award to provide for an equitable distribution of the pension.
Read the Law: Md.Code, Family Law § 8-205
Family Use Personal Property
In addition to the concept of marital property, there is also property that is categorized as “family use personal property.” Family use personal property includes the family home, car, furniture, appliances, etc. The court has the authority to award exclusive use and possession of the family home and other family use property to the spouse with custody of the minor child or children. The purpose of such an award is to permit children to continue to live in an environment and community which is familiar to them. Such an award can last for up to three years from the date of the decree.
The court must take into account the following factors in making this award:
- The best interests of any minor child;
- The respective interest of each spouse in continuing to use the family use personal property or occupy or use the family home or any portion of it as a dwelling place;
- The respective interest of each spouse in continuing to use the family home or part of it for the production of income; and
- Any hardship imposed upon the spouse whose interest in the family home or family use personal property is infringed upon by an order issued under this section.
Read the Law: Md. Code, Family Law § 8-208
Property Acquired During Separation
Separated spouses can still acquire marital property. For example, lottery winnings that resulted from a win on a ticket purchased two years after the parties separated (but before they divorced) are considered marital property.
Read the law: Md. Code, Family Law Title 8
Source: People’s Law Library of Maryland
Equitably distributing property during a divorce can be very complex. An attorney is essential to help you determine what property is and is not subject to equitable distribution, the percentage of the distribution and how much (monetary value) is to be distribute. The Law Office of Robin J. Gray can help you make the best decision for your situation and will aggressively pursue your rights to the marital property. Contact us at
