Custody, alimony and asset distribution are the three major issues surrounding
divorce. How your assets, including real property, personal property,
bank and investment accounts and retirement accounts are divided by a
court can have a major impact on divorcing couples. Maryland is an “equitable
distribution” state which allows leeway for a court to grant a larger
share of the marital assets to one spouse over the other. Martial assets
(property) is any asset acquired during the marriage, no matter how it
is titled, which was not received by inheritance to one spouse, gift from
a third party to one spouse or assets directly traceable to one spouses
In order to protect your assets during a divorce you should keep and maintain
accurate and complete records of you financial affairs. Know all of your
and your spouse’s banks, investment accounts and income information.
Jointly filed tax returns should have most information regarding salary,
interest income from investments and savings and other pertinent financial
information. Be sure you keep a copy or have access to a copy of tax returns
for at least the past 5 years. Pay stubs are also chock full of information
regarding retirement investments, income and other benefits. If you inherit
money keep it in a separate account and do not add money earned from marital
sources. Interest or investment income directly traceable to the inherited
account will be deemed non marital. Keep the account separate and in your
name only. Use of inherited funds to pay a mortgage, pay living expenses
or making investments in both spouses’ names will be deemed a gift
from one spouse to the other.
Additionally try to keep records of assets you may have had at the time
of your marriage. Look for or keep bank statements, retirement statement
or assets valuations from the period of time around you wedding date.
Many bank or investment accounts will only be preserved by the institution
for 10 years, which can make tracing the asset to pre-marital property
very difficult under Maryland divorce law.
Lines of credit, home equity loans and credit cards should be frozen in
the event of divorce to reduce the marital debt for which you may be liable.
Pay down debt in your name first then marital debt. Use marital money/assets
to pay debt, not pre-marital assets first to pay down debt.
Business with other partners should have buy-sell agreements to protect
from costly fights about the value of the business and long term ownership.
Lastly be sure to obtain competent legal advise from an attorney who specializes
in martial law. Call Nicholas T. Exarhakis at 410-224-7464 for a free