Who Gets the Beach House?

who gets the beach houseVacation homes are typically high-value properties. Ending your marriage will necessitate dividing those assets and properties. When properties other than a primary residence come into play, the next steps you and your attorney take are crucial to determining whether or not you will receive what you deserve from the sale of those assets.

Like other assets, it is vital to make sure that the value of your vacation home is properly assessed during divorce proceedings. It is possible, and even likely, that if you and your spouse are separated during the proceedings that one of you will use the second property.

Complicating factors

You and your spouse may decide to continue sharing use of the vacation home. However, the details of a sharing agreement often prove too complicated to bear out in reality. It is important to objectively assess the importance and value of the vacation home to determine whether or not selling is better than sharing.

Yet another complicating factor can affect the value of your vacation home; the real estate market. For example, the median sale price of vacation home sales surged from 2012 to 2013 by almost 30% according to the National Association of Realtors. A detailed understanding of the market can greatly affect the outcome of asset division during your divorce.

As with all issues in a divorce, there is no prescribed course and no best way to handle vacation homes. A divorcing couple must examine all aspects of their finances, and take that information into account. Of course, having an emotional attachment to a home can change the game; you may be willing to keep a property regardless of the cost if it is important to your family.

Our skilled attorneys are experienced in the complexities of high-asset divorces, and can help you clarify priorities during an emotionally charged time. In addition to vacation homes, there are likely other investments as well as stocks, pensions, and retirement plans. If you are looking for experienced representation during a high-asset divorce, look no further than Cynthia H. Clark & Associates, LLC Contact us today to reserve a consultation.

As always, an amicable agreement is preferred. However, if you and your spouse are unable to reach an agreement, the court will provide a solution. Regardless, having the experienced lawyers of Cynthia H. Clark & Associates, LLC on your side will ensure that you keep the assets that are important to you. Please contact our firm to reserve a consultation.

Is a Gift from Family “Marital Property”

We are just 2 days away from Halloween when kids all across America will venture out “trick or treating”. If the truth is to be told, I probably went “trick or treating” longer than most. I remember being well into my high school years donning a costume of some sort (“punk rocker” one year, as I recall) and knocking on neighbors’ doors scoring tons of great candy and treats. After my evening of trick or treating was over, my sister and I would dump out our bags and survey our spoils, swapping some goodies for others. For me, I was willing to trade almost anything for Reese’s Peanut Butter Cups! My goodness, it was like a little bit of Heaven dipped in chocolate and wrapped in a gold seal! When I think back on those years it fills me with such joy. But these happy childhood memories would be altogether different if the day after Halloween I awoke to discover that half my candy had been taken from me and given to my sister. Cue the scary music and the shiver-inducing SCREAM!!!

Well it is just this kind of tale of woe that has inspired this week’s question. What if a special treat that was meant just for you somehow overnight becomes a gift that you are forced to share with someone else? You’d be wondering how this horrible injustice happened.

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Question: If one spouse receives a cash gift from a family member during the marriage is that gift treated as non-marital property under the Maryland Family Law Code?

Answer: It depends. Generally speaking, a gift of cash that one spouse receives from a family member that is made solely to that spouse will be considered non-marital property. However, this non-marital property can be converted into marital property if the giver of the gift and the receiver of the gift are not careful. For example, if the giver of the gift does not make it absolutely clear that the gift is made solely to one spouse (e.g., by writing the check solely in that spouse’s name) there may be an argument as to whether the monies was not intended to be a gift to both spouses. Moreover, the receiver of the gift may muddy the analysis by depositing the funds in a joint bank account. Then a court may wonder whether a “second” gift was made from the spouse who received the gift from his or her family member to that person’s spouse. To make matters worse, if the account into which the money was placed is one in which both spouses deposit their paychecks and other funds that the couple receives, the “gift money” will have commingled with marital money – making it difficult to “trace” the gift (which is claimed to be non-marital) from the other marital funds in the account.

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I have seen first-hand how clients have inadvertently forfeited their right to hold on to non-marital assets by failing to keep monetary gifts or inheritances separate from marital funds. In several cases, down payments for home purchases were “gifted” by one party’s parents and then placed in joint bank accounts with other household funds until the closing date. In another case, a father of one client provided a loan to the parties to purchase a home. Upon the death of the client’s father several years later the father’s estate forgave the debt of the parties, thereby making a “gift” to both parties rather than a gift or inheritance to his son solely. As you might imagine, it was a bitter pill to swallow for the client whose father’s gift that purchased a lot of equity in the couple’s marital home was shared equally by the father’s soon to be former daughter-in-law.

This Week’s Takeaway: Mind your goodie bags lest you find that you’ve sprung a hole in the bottom and half your treats have been lost.

Engagement Rings: Who Gets to Keep it in Maryland?

Many of us can relate to the inordinate amount of time shopping for the perfect engagement ring. There is so much pressure involved in choosing the ring as it seems to symbolize more than just the intention to marry your special someone.

Whether we like it or not, in many cases the engagement ring is seen as a measure of success and wealth on the part of the ring-giver. Sometimes, the engagement ring is viewed as a reflection of how highly the ring-giver esteems and cherishes the ring recipient. Personally, I think it’s a lot of “hog wash” designed to get people to spend a lot of their hard earned money even before the “I do’s” are said.

Now if you have ever watched “Judge Judy” you probably have seen her tackle the question of what happens to the engagement ring if the engagement falls apart and the couple never marries. Well, this week’s question explores what happens to the engagement ring once the marriage has soured and the couple decides to divorce.

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Question: Is an engagement ring considered “marital property“?

Answer: Generally speaking, it is not. Typically, engagement rings are given prior to the marriage and are considered to be gifts by one party to the other in contemplation of marriage. Upon divorce, the engagement ring would generally be excluded from marital property division. However, a wedding ring would be treated differently by Maryland courts.

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As with all things related to marriage, do not let your emotions trick you into making an impulsive decision. The consequences can be costly. Make sure that your greatest investments in the marriage are your, love, patience, commitment and fidelity — not your money on the engagement ring purchased long before the marriage begins.

Cynthia Hawkins Clark regularly posts to this blog, her “What’s on Your Mind Wednesday” blogs which address questions we are frequently asked by our clients.

Marital v Non-Marital Property

Marital v. Non-Marital Property Classification is extremely important in determining ad of issues that arise in a custody dispute and turn to issues related to the classification of property as marital or nonmarital. The first thing a Maryland family law judge must determine when deciding how to equitably divide assets that a married couple have acquired either jointly or separately is whether such property is marital property or nonmarital property.
This determination is significant. Property that a court decides is nonmarital will be excluded from equitable division by the court. In other words, if a court determines that a parcel of land, an automobile or a house was acquired by one spouse alone, the other spouse will be precluded from laying claim to any of the value associated with that property.

Most people have an intuitive sense of what belongs to them. In a divorce, spouses sense of entitlement and right to certain property becomes even more keen. Countless family law clients have come in saying “I paid for that ___ (fill in the blank) out of my hard-earned money. It’s mine.” Others have come in dispirited saying, “I am at a loss, I put so much sweat equity in the house and made mortgage payments but my spouse never got around to putting me on the deed.” Well, as you will see with this week’s question and answer, your intuition regarding what’s mine and what isn’t may not serve you well in this area of family law.

Does It Matter if My Name is Not on the Deed?

*Marital Property is all property acquired during the marriage except by gift or inheritance and its classification is not directed by title to the property under Maryland family law.

Question: If my name is not on the deed to the family home but the home was purchased during the marriage, do I have any marital interest in the equity of the home?

Answer: Yes. Under the Maryland Family Law Code, property that is acquired during the marriage is considered marital property REGARDLESS of how the property is titled. There are a few exceptions to this rule. For example, if the home was acquired by inheritance or gift from a third party or the home has been excluded as marital property by a valid agreement between the parties then the Court will consider the property to be non-marital. ***************************************************************************
This all sounds very straightforward. However, making these marital property determinations can be more difficult then simply applying the above-stated rule to the facts in your case. Maryland courts have added more complexity (judges would call it clarification rather than complexity) to the rule through its various decisions. For example, Maryland courts have held that property will not be considered “acquired” before marriage unless 100% of the funds used to purchase that property are provided by one person alone from premarital funds. Therefore, a home that has been purchased in part since the date of the marriage will be considered marital property.

I know that may sound like a lot of legal mumbo jumbo so let me boil it down to a simple admonition. DO NOT SIGN A SEPARATION AGREEMENT DIVIDING UP PROPERTY WITHOUT FIRST SEEKING THE ADVICE OF AN aNNAPOLIS, MARYLAND FAMILY LAW ATTORNEY.

“Lean not unto your own understanding!” [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][Not my expression although I love it.] You may be sorry. For those not familiar with that centuries old expression there is the more modern interpretation of that verse “If you don’t know you better ask somebody.”[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

Identifying Marital Property During Divorce

Dividing assets during divorce is becoming increasingly complicated in the modern economy. With couples sharing homes, vacation properties, pension plans and stock options and even professional licenses, a higher level of care is required in today’s property divisionagreements. It is important to recognize the difference between separate and marital assets before you can begin to split your holdings during your breakup.

In general, separate property in Maryland consists of the following: property that was owned by one spouse before the marriage; inheritances; a gift provided by a third party; or payment from pain and suffering related to a personal injury suit. Separate property can become marital property if the value is comingled with other jointly-held assets. If you deposit your inheritance money into a joint account, for example, those funds become fair game during divorce negotiations.

Alternatively, other property acquired during marriage is generally considered to be a joint asset. This is true regardless of the official owner of the property listed on titles or deeds. As a divorcing spouse, you are entitled to value held in your husband’s or wife’s 401K, even if the other person’s name is listed on the account. State laws differ somewhat with regards to specific assets, so be sure you are consulting a qualified attorney to find out more about your legal rights to marital property during divorce.

Some states also recognize the increase in value from a separate property as marital property. For example, if you held a rental property before getting married and its value increased, the difference could be considered dividable property during divorce. Maryland is an equitable distribution state, so several factors are considered when marital property is being divided.

If you have questions about property division during your divorce, consider consulting a qualified family attorney. These professionals can help you learn more about your property rights during your breakup, allowing you to understand your claims to retirement accounts, real estate, tax refunds, art and antiques, among other holdings.

Source:  www.huffingtonpost.com, “Understanding how assets get divided in divorce” Jeff Landers, Jun. 14, 2013