What Does Equitable Distribution of Property Really Mean?

The Maryland Marital Property Act governs the division of property In divorce cases. Marital property is all property acquired by the couple dur-ing the marriage except gifts, inheritances, real estate titled as tenants by the entireties, or anything traceable to those sources. Maryland requires "equitable" distribution of property. This does not necessarily mean that the property is divided 50/50. In fact, the Maryland legislature specifically rejected the notion that marital property should presumptively be divided equally when it adopted the Marital Property Act. The legislature also determined that property should not be divided according to which spouse has title to the property. Rather, the divorce Court is to divide equitably and fairly the property interests of spouses by giving consideration to a number of factors. In order for there to be an equitable result, the Court can order one party to make a monetary award (literally a payment) to the other party.

With the exception of pensions, the Court cannot transfer ownership of property from one spouse to another. The judge must instead undertake a three-step process before granting a monetary award. First, the Court must characterize the property owned by the parties as marital or non-marital. Secondly, the judge determines the value of all marital property at the time of the divorce, not the separation. Finally, the Court can order one spouse to pay a monetary award to the other spouse to adjust for the inequity based on how the marital assets are titled.

The judge must consider a number of factors when deciding whether to make a monetary award and, if so, how much of one to make. Generally, the most important factors are considered to be the monetary and nonmonetary contributions of the parties and the duration of the marriage. How specific property was acquired is also a significant factor and is closely linked usually to the question of which party made which contributions. The other criteria include the spouses' ages, economic circumstances of the parties and value of all the property, physical and mental condition of each spouse, the granting of alimony and possession of the house to one of the parties, and any other factor the Court thinks is necessary to achieve an equitable result.

The General Assembly, in drafting the Marital Property Act, focused on the importance of the non-monetary contributions of spouses for the first time. A spouse, whose activities within a marriage do not include the production of income, cannot be said to have contributed nothing to the acquisition of property by either or both of the spouses during the marriage. The legislature maintained that non-monetary contributions made by spouses "as homemaker, parent, housewife, handyman (of either sex), etc.," although unquantifiable, are contributions which may be equivalent to the monetary contributions of the other spouse.

Property distribution in divorce cases has become increasingly complex and now involves not just divorce law, but also issues of taxation, corporate law, real property, and pension issues among others.

For more information on this article, contact Ferrier R. Stillman at 410/752-9731.