Articles Posted in Marital Property

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As the Baltimore Sun reports, Thursday night, February 23, 2012, the Maryland Senate passed Govern Martin O’Malleys’ bill to legalize same-sex marriage in Maryland. We blogged on June 28, 2011 that New York had passed the law allowing same sex couples to wed, making it the 6th state to do so. Maryland is now the 8th state to approve same sex marriages. While it is a victory for supporters of the bill, many believe that the law will likely be up to the voters in November. If the law is passed by the voters, it will be effective in January 2013.

As expected the church has voiced their disapproval of the bill’s passing. The Maryland Daily Record reports that Baltimore’s Cardinal O’Brien states that the bill “threatens families.” He has pledged that the Baltimore Archdiocese will work to overturn the law and likely will be a key proponent in making sure the voters have a say in November.

We discussed the potential of this bill passing last February and discussed the changes we may see in the area of family law as a result of the law. . As stated in the blog, the law will affect custody and visitation law, as now same-sex couples who marry and adopt a child will both be the legal parents of the child; pre-nuptial agreements; and same sex divorces.
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The legislation pending to allow same-sex couples to marry is scheduled for a final vote this Friday, March 11, 2011 in the Maryland House of Delegates as reported by the Baltimore Sun. The legislation has already passed the Maryland Senate and the House Judiciary Committee. The passage of the bill, if signed by the Governor, would allow same-sex couples to marry in the State of Maryland. The passage of this bill would not afford same-sex couples who chose to marry more rights than those of their heterosexual counterparts. The bill would solely extend the civil protections already afforded to married couples to same-sex couples who chose to marry.

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The same sex marriage bill passed at the House Judiciary Committee on Friday, March 4, 2011 by a 12-10 vote as the Baltimore Sun reports. This means that the bill will move to the full House of Delegates for debate, which is scheduled to start as early as this Tuesday, March 8, 2011. As we previously blogged, on February 25, 2011 the bill if passed into law would allow same sex couples to wed. Delegates who had previously opposed the bill have expressed that they will vote to pass the bill as they believe it should ultimately be up to the voters to decide. As the Sun reports, if the bill passes in the House of Delegates, “Gov. Martin O’Malley has said he will sign the legislation if it reaches his desk. Opponents could then gather the roughly 55,000 signatures needed to petition the new law to referendum, where voters in the 2012 presidential election will decide whether to repeal it or leave it on the books.

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Maryland law defines dissipation as when “one spouse uses marital property for his or her own benefit for a purpose unrelated to the marriage at a time where the marriage is undergoing an irreconcilable breakdown.” Sharp v. Sharp, 58 Md. App. 386 (1984). At issue is also whether or not the party spent or depleted the marital funds or property with the principal purpose of reducing the amount of funds that would be available for equitable distribution at the time of divorce. In a recent opinion by Judge Murphy on behalf of the Court of Appeals the Court faced the question as to who has the burden of proving that the assets had been dissipated. The case, Omayaka v. Omayaka was originally heard by the Circuit Court for Prince George’s County for the final divorce hearing in July 2007. At this hearing the attorney for Mr. Omayaka attempted to prove that the wife had dissipated martial assets. Mr. Omayaka claimed that Mrs. Omayaka had opened up an account in her name only during their marriage and had withdrawn over $80,000.00 from the account since 2005. Mr. Omayaka’s attorney questioned Mrs. Omayaka on what the money was spent on and she stated clothing, food, insurance for the baby, rent, credit card debt, a car loan and the babysitter. At the conclusion of the case the Circuit Court found that there had not been a dissipation of assets because the attorney for Mr. Omayaka had not met the burden of proving that the money was spent for a purpose unrelated to the marriage during a time when the marriage is irretrievably broken. The attorney for Mr. Omayaka filed an appeal based on the contention that he had met his burden of proof showing dissipation of the assets. The Court of Appeals, in its’ opinion, clears up the burden of proof question with the following guide:

The alleging party must first put on a prima facie case that the marital assets were taken by one spouse without agreement with the other spouse. Then, the burden shifts to the alleged spending party to produce evidence that generates a genuine question of fact on the issues of whether the assets were taken without agreement, and/or where the funds are, and or were they used for marital or family expenses. However, the court points out that it is clear that the burden lies on the party who claims that the other party has dissipated marital assets to clearly prove that the funds were spent solely to reduce the money available for equitable distribution.
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As the Baltimore Sun reports, the Maryland Senate approved the Civil Marriage Protection Act on Thursday, February 25, 2011, which would allow same-sex couples to wed. Although the House of Delegates still needs to pass the Act, the Senate’s passage is still “historic.” We have previously blogged about the issues that surround the recognition of same-sex marriages in Maryland, specifically the Attorney General’s support of recognizing same sex marriages created validly in other states maryland and Maryland lawmakers attempt to block gay marriages. With this Act being passed by the Senate, it is time for us to prepare for changes we may see in our divorce and family law practice with the allowance of same-sex marriage.

The potential changes are vast but include the changes that we will see in custody and visitation law. Often same-sex couples adopt a child, however when couples are not married, only one partner is usually the legally recognized adopted parent. When these relationships end, the child is left with one legal parent and one who is presently recognized as a third party (not a parent) in the State of Maryland. For more information on the third party status that same sex parents currently face see our November 27, 2009 blog. With the passage of this legislation, same-sex couples who marry and adopt a child will both be the legal parents of the child and will be recognized as same should the marital relationship end in separation and/or divorce.
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When meeting with clients initially and discussing the general course of litigation, I will advise them that discovery is part of that process, which usually prompts many questions. First and foremost is what is discovery? Discovery is a litigation tool used to gather and exchange relevant information and potential evidence from and with the opposing side prior to a trial. In a divorce matter it most frequently consists of Interrogatories, Request for Production of Documents, and Depositions of parties and witnesses. However, discovery may also involve Request for Admission of Facts, Notice of Records Depositions, and/oror Mental or physical Examinations of parties. Interrogatories are a list of a maximum of thirty questions usually involving employment history, lifestyle, assets, marital and non-marital property, child rearing responsibilities, and reasons for the dissolution of the marriage. Request for Production of Documents are a list of requests asking for documents from a party. These usually consist of financial documents, employment records, documents regarding the children, documentation of communications with the other party, documentation of expenses/debt and documents regarding the parties’ assets.

Many clients question why these documents need to be exchanged as they feel it is an invasion of their privacy. The theory of broad rights of discovery is that all parties will go to trial with as much knowledge as possible and that neither party should be able to keep secrets or have withheld discoverable information from the other. Further, client’s must know that if you or the opposing party makes a request or raises a particular issue in a matter, then the issue must be explored. The old adage “what is good for the goose is good for the gander”, often applies in these situations. If a document is requested that is particularly confidential in nature or for some reason should not be turned over to opposing counsel, clients can seek protection of that document by filing a motion with the court. If the opposing side is not turning over their documents and answers in a timely fashion then one may file a motion with the court asking them to compel these documents or to prohibit that party from entering any evidence regarding same at trial. If a party tries to introduce a document at trial that was not turned over to the other side prior to the hearing then the Judge may prohibit it from being entered into evidence. The discovery process is governed by the Maryland Rules commencing with Rule 2-401. Clients should also understand that while all pleadings in a matter are filed with the court, the discovery requests and responses are not. The court will not see the Answers to Interrogatories or Responses to Request for Production of Documents unless they are admitted in evidence at a trial.
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The Baltimore Sun reported on July 7, 2010 that retired Prince George’s Circuit Judge Graydon S. McKee III ordered Gayle and Craig Meyers to split custody of their dog at their limited divorce proceeding . For more information on limited divorce see our March 19, 2010 blog. In accordance with Maryland law, pets are considered marital property and are to be divided as such. For more information on marital property in Maryland, see Maryland Code, Family Law 8-203 and see August 19, 2009 blog. Instead of ordering the couple to sell the dog and split the proceeds, the Judge ordered that the dog will alternate spending six months with each party. As reported, “it was very clear that both of them love this dog equally,” McKee said. “The only fair thing to do was to give each one an equal chance to share in the love of the dog.”
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The Maryland Daily Record reported on June 28, 2010 that 81% of divorce attorneys have used Facebook as a form of evidence. It is a growing phenomenon in the family law practice and it has occurred in our practice in divorce hearings, custody hearings, and protective order hearings. The statements on a spouse or parent’s Facebook page may be just enough, and appears to have been just enough, to push the Judge in one direction or another in a case. Most Judges may not be aware of the context of a picture or statement on Facebook and with blurry evidentiary rules regarding their admission a picture that is funny to you may appear disturbing to a Judge.

Many may question why a Facebook page would be relevant in a divorce, custody or protective order matter. As explained in our February 28, 2010 blog, a fault based divorce such as adultery requires proof of both the opportunity and disposition for the adulterous relationship to be proven. A Facebook page displaying pictures or words of affection may be the key to proving the disposition element needed for adultery. As explained in our October 23, 2009 blog, in custody proceedings a significant factor that is considered is parental fitness. A Facebook page displaying irresponsible habits of a parent may question the fitness of that parent in caring for their child. As explained in our August 16, 2009 blog, the alleged abuse that is needed to enter a protective order can consist of a threat of serious imminent bodily harm. Such a threat on a Facebook page may be enough for a Judge to enter a protective order.
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The short answer is, they do not. Martial property is defined as “the property, however titled, acquired by 1 or both parties during the marriage.” Maryland Code, Family Law § 8-201(3). This includes a marital business acquired by one or both of the parties during the marriage. For more information on marital property division during a divorce proceeding see our Marital Property Blog from August 19, 2009 . Many times the issue of how to solve the ‘division’ of a martial business in a divorce proceeding is a complicated one due to stock ownership, the value of the business, and consideration of employees of the business.

In accordance with Maryland Code, Family Law § 8-202 (b) when the court determines the ownership of personal or real property, the court may: (1) grant a decree that states what the ownership interest of each party is; and (2) as to any property owned by both of the parties, order a partition or a sale instead of partition and a division of the proceeds. A business is not real or personal property and due to how the stock of the company is held, a sale of the business may not always be a viable option. In the recent case of Turner v. Turner, 147 Md. App. 350 (2002) the Court of Special Appeals found that they could not order sale of the marital business or partition (divide) the marital business, awarding wife 50% of the business, because the husband owned 87% of the shares of stock in the company and Wife owned the remaining shares. The court does not have the authority to re-title stock and does not have the authority to sell it. Therefore in Turner, the court awarded the wife a larger percentage of the parties total value of marital property (a monetary award). What this means is that when a marital business is an issue and stock is held by both husband and wife, but titled individually, in addition to divorce proceedings, an action to dissolve the corporation may also be necessary if parties are unable or unwilling to continue to work/ run the business together.
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When disclosing or researching your marital property in a Maryland divorce action, it is important that clients are informed that any portion of a retirement account accrued during the marriage is marital property. For more information on marital property in Maryland, see Maryland Code, Family Law 8-203 and see August 19, 2009 blog. The courts in Maryland have the authority to transfer any percentage of the martial portion of the retirement account whether it be a pension, profit sharing plan, deferred compensation plan, thrift savings account, 401k or IRA from one spouse to the other, Maryland Code, Family Law §8-205. The court may apply one of several methods when valuing the marital portion of the retirement account, all of which an attorney would be able to advise you.

In order for a portion of the retirement benefit to be transferred a Qualified Domestic Relations Order, otherwise known as a QDRO, must be signed by a Judge and submitted to the plan administrator. The QDRO is an order by the court to modify the payee of all or a portion of the retirement plan. Each plan administrator may require a different type of QDRO and QDRO’s must comply with the ERISA (The Employee Retirement Income Security Act of 1974) laws, so it may be important to hire an attorney to assist you in this drafting process.