Category: Property Division

In some states, property is split up pretty much 50/50 in a divorce, giving half of the assets — from monetary assets to items the couple owns — to one party and half to his or her spouse. If you go into a divorce in Maryland thinking that this is what you should expect, though, you’re going to be surprised, because Maryland does not use these community property laws. Instead, the state uses equitable division laws.

So, what is equitable division? It is the fair split of the assets, and the judge can decide after examining the case what is fair for each party.

There are numerous factors that must be taken into account, from who earned the most money to what property one person may have bought on his or her own. One of the most important things to think about is the economic circumstances that you and your spouse will find yourselves in after the divorce. The judge is going to make a decision based, in part, on these circumstances.

For example, you may not have a job, but your spouse may have a well-paying job. In some cases, this could mean that you are provided with a larger share of the assets because you have more need. Other things that factor into this are child support requirements, debt and additional types of income that you each may have access to. When the judge can see the big picture of your economic situation without your spouse, he or she will then decide how your wealth should be split up.

To learn more about this and divorce in general, check out our webpage on property division today.

No matter how much you feel like your pet is a member of your family, the unfortunate truth is that a court in Maryland is not going to use child custody laws when dealing with pets. Instead, the court will look at your pet as property, just like a car or a house. What this means is that your pet could be given to your spouse during a divorce.

If you both want to own the pet, however, there are some things that you can do to make this happen. To start with, you may want to think about setting up a pet parenting plan. You can do this largely in the same way that you would create a child parenting plan, as long as you can come up with something that you both agree to.

For example, you could have the pet one week, and your ex could have it the next week. You could determine who will need to take care of it on holidays, and you could divide the major holidays between the two of you. One important thing to consider is what ability you have to drop the pet off at your ex’s if you are going on a trip and you need someone to watch it. Will your spouse be open to that or not?

Finally, it’s a good idea to work out a plan to cover the expenses of caring for the pet. Unless you want to have two of everything — such as leashes, food bowls and toys — you need to split these things up. Additional vet costs may also have to be divided.

If you want to make sure that property division laws don’t take your pet away, consider your legal option to create a plan to share your pet with your ex.

Source: Huffington Post, “Divorce Confidential: Crafting a Creative Pet Parenting Plan” Caroline Choi, Nov. 19, 2014

Depending on what each spouse wants and depending on each spouse’s unique financial circumstance, divvying up the family home in a way that makes everyone happy could prove difficult. A lot of times, one spouse will want the home, and the other will want to get his or her name off the mortgage. Sometimes, this is easy if both spouses have good credit, but sometimes refinancing the mortgage solely in the other spouse’s name is impossible. In such cases, it may be necessary to sell the residence outright.

One typical snag with regard to refinancing involves so-called “jumbo loans,” which are loans above the government-backed loan limit. The limit is $417,000 in most cases and up to $625,500 in certain high-priced neighborhoods. With jumbo loans, both individual income and net worth figures are important. For this reason, it is important to keep in mind that lenders do not tend to consider alimony and child support to be reliable income until after a year of payments have been received. Lenders will also want to see the spousal or child support payments continuing at least three years into the mortgage.

As for solutions, if ex-spouses receiving alimony and/or child support are having a difficult time getting approved, they might try to use some cash or assets received from a divorce settlement to make a larger down payment on a home mortgage. This could serve to reduce the amount of the loan, making monthly payments lower and making the loan easier to get approved. In other cases, a spouse might agree to keep his or her name on a mortgage, so that the ex-spouse can keep the family home, but this requires trust and confidence on the part of both spouses, and it also means that it will affect the other spouse’s credit report.

Even the moneyed spouse — the one who has to pay spousal or child support – could run into trouble trying to refinance a mortgage because his or her net income would be reduced by the monthly alimony and child support payments owed.

Because of the complexities involved with transferring home ownership during property division, Maryland couples are encouraged to discuss the matter with their divorce attorneys before completing any kind of agreements to remove a spouse’s name for home title and before executing a divorce agreement that requires one spouse to refinance.

Source: The Wall Street Journal, “In a Divorce, How One Spouse Can Keep the House” Anya Martin, Nov. 05, 2014

Aside from child custody disagreements, usually the most difficult issue that divorcing couples face involves property division. Indeed, property division proceedings can make or break an individual’s financial circumstances depending on the outcome. For that reason, Maryland residents will want to be as informed as possible going into such proceedings.

During your Maryland property division proceedings, the Law Offices of Paula J. Peters, P.A. will assess each party’s contribution to your marital estate — both in monetary and non-monetary terms. We will also look at any kind of misconduct that caused the dissolution of the marriage. The duration of the marriage, both spouse’s ages and health conditions and a variety of other factors will also be important to review in a property division case.

The more experienced a divorce attorney is, the more he or she will be able to help you protect your rights and ensure that you are fairly treated in the property division process. A lawyer must also have the ability to create a good attorney-client relationship of trust and confidence. Indeed, attorney-client communication and trust are essential in promoting favorable outcomes in any family law proceeding.

Sometimes, one side may try to argue that certain assets are marital assets when they are actually not. Other times, a spouse may try to argue the opposite. Depending on which side you are on, this could have a dramatic impact on your finances. It is important that individuals are aggressively represented in cases like this, whenever their property division rights are being threatened in divorce proceedings.

No one ever said that divorce was easy — quite the contrary. Generally, when Maryland residents think of divorce proceedings, they think of the complexities of property division and the pain of having to give something up. However, a big financial windfall from the close of a divorce settlement can also be difficult to handle — especially if one is not accustomed to managing the family finances.

In order to stay on track and not get overwhelmed, there are several things that Maryland residents can keep in mind if they are going to receive a lot of assets after a divorce. First and foremost, getting organized is key. Making a list of all one’s assets, both jointly owned and separately owned going into the divorce process is vital. By knowing what you have, by understanding your prior tax filings, and by knowing what you want coming out of the divorce, the divorce proceedings can continue without the same level of fear and stress.

Creating a budget is also helpful. That budget will need to include daily living expenses, money to put in savings, a budget for legal expenses, and other potentially unexpected costs, which may have previously been paid by a future ex-spouse. In the event that a large divorce settlement is expected to be received, it is vital not to sign any kind of legal documentation until an attorney has reviewed it. That way you can avoid unintentionally signing away your right to a future divorce settlement and other negative consequences.

When in doubt about one’s finances and legal rights leading to a divorce, it is important to consult with professionals. Maryland residents can benefit greatly from assistance from legal and financial professionals during their divorce proceedings. These individuals can help one to navigate the complex property division process to limit emotional turmoil and fear band to ensure that all parties are equally treated under the law.

Source: The Huffington Post, “Sudden Wealth From a Divorce?” David A. Dedman, Aug. 21, 2014

Dividing the family home during a Maryland divorce can be difficult for a variety of different reasons. Although the process can be challenging, though, there are some specific strategies that divorcing individuals can employ depending on the obstacle that presents itself.

For example, individuals who are legally married and not yet divorced (or not yet legally separated), may wish to purchase a new home to move into before the separation process has been carried out. Because these individuals are still legally joined to their future ex-spouse, though, the future ex-spouse would need to execute a quitclaim document, in order to release his or her interest in the new property.

Another challenge could involve an individual whose ex-spouse was awarded the home in a divorce settlement. If the ex-spouse has not been able to obtain a new mortgage for refinancing the other spouse off the original mortgage, the old mortgage could present a credit report challenge for the individual seeking to buy a new home. In order to completely remove one’s name from the old home, the ex-spouse must either sell the home or refinance it — which may be easier said than done in some cases.

There are other challenges that Maryland couples might face in the property division process. However, these and the above challenges are easiest to resolve when both spouses are able to maintain open communication throughout the separation process and/or make use of peaceful mediation services during their divorce. While this is easier said than done in many cases, those who can achieve a peaceful separation will save money and prevent unnecessary emotional turmoil in the long run.

Source: Fox Business, “How to Divide Your House in a Divorce” Jul. 14, 2014

In an ideal world, marriages would last forever, and wealthy Maryland residents wouldn’t have to ever worry about divorce and all the complexities it can bring. Although some couples are fully prepared with prenuptial agreements and other legal documents outlining how assets are to be split in a divorce, many are not. This can lead to complex property division – as well as many mistakes along the way.

The first thing to understand is that all the marital property of value needs to be considered and split appropriately. This is not limited to bank accounts. Many wealthy couples share business assets and property. There are also 401(k)s, IRAs, pensions, stocks, and retirement accounts that must be disclosed and split fairly. A divorce financial specialist can help the wealthy ensure their fiscal health.

Divorce can be very stressful, and many people need a shoulder to cry on during this emotional time. They may look to friends and family for advice. While these loved ones may try to be helpful, their well-meaning advice could lead someone in the wrong direction. Wealthy couples often have complex property division issues and are better off getting information from their lawyer or financial adviser.

In addition, put aside the misconceptions about the court. The court will not produce the results most people desire. Couples are far better off trying mediation or negotiating a settlement rather than having their day in court.

It can be challenging to agree on an equitable division of assets in a divorce. That is why more and more couples choose prenuptial agreements before tying the knot. But even without an agreement in place, couples can still come out ahead by avoiding common mistakes.

Source: Forbes, “Three Of The Biggest Mistakes The Wealthy Make When Divorcing” Russ Alan Prince, Jun. 09, 2014

Divorce documents have just been released in connection with the breakup of high-profile political power couple Heather and Tony Podesta. The pair, active in the national political scene, may be preparing for a contentious split, as both members attempt to maintain their business brand for future use. Maryland couples who are divorcing after building their businesses together may face similar struggles as this Washington, D.C., pair during the property division process.

Although the couple is reportedly arguing over a large collection of art, the primary point of contention in this divorce appears to be all business. The members of this couple both built themselves up as industry insiders, but the man is taking credit for the lion’s share of the woman’s success. News reports show that he is accusing his soon-to-be ex-wife of using his name and associated reputation to build her own business empire. Courtroom documents say that the man introduced his wife to important people and processes that could lead her to success as a high-powered lobbyist. The man explains that his contacts and experience contributed greatly to the woman’s meteoric rise in the political scene.

The woman’s perspective appears to be more egalitarian; she says that she worked cooperatively with the man to build a political presence in the nation’s capital. Her divorce-related documents show that she is seeking possession of the family home; she is justifying that request by pointing out that she oversaw a massive renovation of that house over a period of several years. Her courtroom documents focus on equitable distribution, according to insider reports. She wants a fair share of the couple’s extensive collection of artwork, in addition to other specific assets.

Even high-powered government couples need help sorting out their marital property during a breakup. A Maryland attorney may help those with unusual assets — such as this couple’s collection of 1,300 pieces of art — achieve equitable distribution. Attorneys may provide guidance throughout complex property divisions, facilitating complex valuation for a fair split of property obtained during the marriage.

Source: Politico, “Heather and Tony Podesta divorce documents released” Tal Kopan & Lucy McCalmont, Apr. 11, 2014

Maryland couples may realize that property division — even that involving straightforward assets such as the family home — can be far more complicated than anticipated. The more complex the property division becomes, the more unusual the assets that are up for grabs. Financial experts say two types of financial holdings are among the most difficult to value and divide: stock options and restricted stock.

For those who are not familiar with these two types of assets, a quick primer: Stock options allow employees to purchase shares at a previously determined low price. That price is valid for a period of years, during which the worker may purchase and then sell the shares at a profit. Restricted stock, on the other hand, is provided at no cost to workers, but it can only be sold when certain conditions, such as a specified term at the company, have been fulfilled.

Couples who are looking to divide such assets may face some hurdles in determining the exact worth of these holdings. In a volatile marketplace, it can be difficult to speculate about the future cost or value of stock options. Divorce teams for those with this type of complex valuation should include forensic accountants or economists to help determine the potential growth of the assets over time.

Attorneys may help clients receive their fair share of the restricted stock or stock options. A divorce financial planner is a valuable ally during this process, as that person may be able to determine a reasonable division that promotes client interests. It is also helpful to have an idea about your future plans for the stock options, including the time frame in which you intend to exercise them.

A divorce team that includes an attorney may provide the comprehensive support needed during this complex property division scenario. Maryland residents with such holdings may benefit from the assistance of a divorce attorney who can help them learn more about their legal rights. Both parties deserve their fair share of such business assets.

Source: Forbes, “Dividing Stock Options And Restricted Stock In Divorce” Jeff Landers, Mar. 19, 2014