Marital Property

Published on: February 25, 2011

Same-Sex Marriage in Maryland

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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Published on: December 15, 2010

Discovery in Maryland Divorce Matters

By Monica Scherer

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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Published on: July 12, 2010

Calvert County Judge Orders Couple to Share Custody of Dog

By Monica Scherer

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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Published on: June 30, 2010

Facebook Page Evidence in Maryland Divorce Cases

By Monica Scherer

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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Published on: January 28, 2010

How Do Courts Divide a Marital Business in a Maryland Divorce

By Monica Scherer

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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Published on: December 7, 2009

Retirement Accounts in a Maryland Divorce

By Monica Scherer

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.

For more information, contact Monica Scherer, Esq. at 410-625-4740

Published on: August 19, 2009

Non-Marital Funds Used to Purchase the Marital Home: What Happens to Those Funds In a Maryland Divorce?

By Monica Scherer

With more and more Maryland couples coming to a marriage with substantial assets, those couples have property disposition issues at the time of divorce. For example, I am frequently asked what happens to the marital home that is titled as tenants by the entirety, but that one spouse contributed a substantial amount of non-marital money towards (for instance, one spouse sold a home that was acquired before the marriage and never lived in by the parties, and used those proceeds for part or all of the down payment on the marital home). Clients ask is this home then marital or non-marital, and can I get all of the non-marital money I back that I put into the home? The answer is it depends.

In accordance with Section 8-201 of the Family Law Article, Annotated Code of Maryland, “marital property includes any interest in real property held by the parties as tenants by the entirety unless the real property is excluded by valid agreement.” Therefore, even if non-martial funds are used to purchase the marital home, if it is titled as tenants by the entirety (T by E) both spouses are equal owners of the home and it is marital property. Under this scenario, Maryland case law precludes the court from employing a “source of funds” theory as it may with other types of marital property. However, the court may utilize Section 8-205 of the Family Law Article to “reimburse” a spouse by way of a monetary award. This is not an automatic refund to the contributing spouse and by current Maryland case law cannot be when non-marital funds are used to purchase a home titled as tenants by the entirety, but the court may use the monetary award to correct inequities in the way which martial property is titled.

A three-step analysis is to be used when determining a monetary award in a Maryland divorce proceeding: (1) the trial court must first determine whether each piece of property owned by the parties is marital or non-marital, (2) the court must then determine the value of all marital property, and (3) the court may then make a monetary award as an adjustment of the parties’ equities and rights in the marital property. Oftentimes the biggest dispute arises over whether property is marital or not and in some case, partial marital and partial non-marital. If the home is titled T by E it is marital property. However, I have had cases where the home was owned prior to marriage by one spouse, the deed was changed at some point during the marriage to reflect a T by E ownership interest, and the Court found it was partly marital and partly non-marital.

Once the court applies the three step analysis, it then needs to take into consideration a number of other factors. Specifically, Section 8-205 of the Family Law Article, states that the court shall determine the amount and the method of payment of a monetary award, after considering each of the following factors: (1) the contributions, monetary and non-monetary, of each party to the well-being of the family; (2) the value of all property interests of each party; (3) the economic circumstances of each party at the time the award is to be made; (4) the circumstances that contributed to the estrangement of the parties; (5) the duration of the marriage; (6) the age of each party; (7) the physical and mental condition of each party; (8) 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; (9) the contribution by either party of property to the acquisition of real property held by the parties as tenants by the entirety; (10) any award of alimony and any award or other provision that the court has made with respect to family use personal property or the family home; and (11) any other factor that the court considers necessary or appropriate to consider in order to arrive at a fair and equitable monetary award or transfer of an interest in property, or both. What this means is that even if the court determines the home is marital, there is a non-marital monetary contribution by one spouse, a monetary award is still not automatic. While the court must apply and take into consideration the required factors, the Court has discretion when applying those factors as to whether or not a monetary award should in fact be granted.
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