What Is Separate vs. Marital Property in a Columbia Divorce

Separate vs. marital property is an important distinction in family law and divorce. Understanding the difference between these two categories of property is essential if you’re going through divorce or separation, as it dictates how assets are divided between spouses.

Marital property refers to assets acquired by either spouse during the marriage. It typically includes income earned, real estate purchased, and retirement accounts accrued throughout the marriage. Marital property is subject to equitable distribution upon divorce, meaning it’s divided fairly, though not necessarily equally, between spouses according to Maryland law.

Separate property, on the other hand, consists of assets that are owned or acquired by one spouse before the marriage, as well as certain assets received by gift or inheritance during the marriage. Separate property also includes assets such as property owned before the marriage and personal injury awards. Unlike marital property, separate property is typically not subject to division upon divorce.

However, several factors may influence the classification of property as separate or marital:

• Timing of acquisition: Property acquired before the marriage or after the date of separation is generally considered separate property if it is kept separate. Conversely, assets obtained during the marriage, regardless of which spouse acquired them, are typically classified as marital property.
• Source of funds: The source of funds used to acquire an asset can also affect its classification. For example, if one spouse uses funds from their separate bank account to purchase property during the marriage, that property may retain its status as separate property.
• Intention and documentation: Couples can also designate certain assets as separate property through prenuptial agreements or postnuptial agreements. Clear documentation demonstrating the intent to keep specific assets separate can help clarify their classification in the event of divorce or separation.

During divorce proceedings, the classification of property as separate or marital has significant implications for asset division. Maryland follows equitable distribution principles, meaning marital property is subject to division based on factors such as the length of the marriage, each spouse’s contributions to the marriage, and their respective financial needs.

Separate property, however, typically remains with the spouse who owns it and is not subject to division. However, there are exceptions to this general rule. For instance, if separate property becomes commingled with marital assets or if the non-owner spouse significantly contributes to the appreciation of separate property, a portion of the separate property may be subject to division.

What is commingling and transmutation?

Commingling occurs when separate property and marital property are mixed or combined, making it difficult to distinguish between the two. For example, if funds from a joint bank account are used to improve or maintain separate property, such as a premarital home, the separate property may become commingled with marital assets.

Transmutation refers to the conversion of separate property into marital property or vice versa. This can occur through actions such as adding a spouse’s name to a deed or commingling separate funds with marital funds. Transmutation often occurs inadvertently but can have significant consequences during divorce proceedings, putting who owns what into question.

How our Columbia divorce attorneys can help

Here’s how our Columbia divorce attorneys can assist with asset division:

• Asset identification: One of the initial steps in asset division is identifying and cataloging all marital assets and liabilities. We can help you compile a comprehensive list of assets, including real estate, bank accounts, retirement accounts, investments, and personal property. We can also assist in obtaining appraisals or valuations of assets, especially for complex or high-value assets.
• Evaluation of assets: Not all assets are created equal, and their values may fluctuate over time. Our Columbia divorce attorneys can help you evaluate the financial implications of different asset distribution scenarios. We can assess the tax consequences, liquidity issues, and long-term financial considerations associated with various asset division options.
• Negotiation: In many cases, asset division is negotiated between the divorcing parties and their attorneys. We advocate for your interests during negotiations and work to achieve a fair and equitable division of assets. We can help you prioritize your goals and identify areas where compromise may be necessary to reach a mutually acceptable agreement.
• Mediation and alternative dispute resolution (ADR): If traditional negotiation fails to produce a resolution, we can represent you in mediation or other forms of alternative dispute resolution. Mediation allows divorcing couples to work with a neutral third-party mediator to facilitate discussions and reach a mutually acceptable agreement on asset division outside of court.
• Litigation: If negotiations and mediation efforts are unsuccessful, asset division may be resolved through litigation. In this case, we will represent you in court proceedings, presenting evidence, making legal arguments, and advocating for your interests before a judge. We will work to ensure that your rights are protected and that the court considers all relevant factors in determining asset distribution.
• Enforcement and compliance: Once a divorce decree is issued, our attorneys can help ensure that the terms of the asset division agreement are properly executed. We can assist with the transfer of property titles, the establishment of trust accounts, and the enforcement of any financial obligations outlined in the divorce decree.
• Post-divorce planning: Asset division can have long-term implications for your financial well-being. An experienced divorce attorney can help with post-divorce financial planning, including budgeting, investment strategies, and estate planning considerations.

If you’re facing divorce and navigating the challenging process of asset division, you don’t have to go it alone. At McCabe Russell, P.A., our team of experienced asset division attorneys is here to guide you through every step of the journey. With our deep understanding of family law and commitment to protecting your financial interests, we’ll work tirelessly to ensure that your assets are fairly and equitably distributed. To schedule an appointment or consultation with one of our skilled attorneys, call our offices or fill out our contact form. We are proud to serve clients in Fulton, Bethesda, Rockville, and Columbia.