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Understanding Marital Property Division: Classification, Distribution, and New Issues

Learn how to classify and distribute marital property, including pensions, professional degrees, and goodwill. Navigate the complexities of equitable distribution and alimony decisions. Understand the treatment of marital debts and court authority.

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Understanding Marital Property Division: Classification, Distribution, and New Issues

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  1. Review – Marital Property Step One: Classify Prop: Mar/Non-Mar/Mixed Issues • Appreciation: active/H or W efforts = marital passive = non-marital • Commingling: mixing of non-mar/mar prop results in non-mar prop becoming mar • Pension – portion that is mar # of yrs married # of yrs. employed February 19, 2004

  2. Step Two: • FMV – Debt (Liens, Mortgages) • Parties Responsibility/Battle of Experts

  3. Step Three: Equitable Distribution • Court’s authority varies from state-to-state • Md limited – sale of joint property; transfer ownership in pension-like assets; order one party to pay other party monetary award *Note: Fact that property classified as marital in Step One does not always lead to 50/50 split in Step Three (Example: lottery in Alston; train set in Long)

  4. Marital Property III New Issues: HOW TO TREAT: • Pensions • Professional Degrees/Licenses • Goodwill from Business or Professional Practices Divisible Marital Property or Source of Funds for Future Payments of Spousal Support/Alimony?

  5. Marital Prop/Alimony Factors(8-205) (11-106) Contributions: mon/non-mon Income/prop of each party Circumstances of breakup Duration of marriage Age and health of parties Award of alimony/marital prop Marital prop add: any other factor relevant to fairness Alimony add: standard of living during marriage

  6. Mar. Prop. AwardAlimony Decision to award based Also multi-factor on multi-factor standard standard Lump sum pymt based on Periodic pymts past acquisition of assets based on current income May be dischargeable in Gen. not bankruptcy dischargeable Non-taxable transfer Tax. income to payee Goals: More Emphasis Goals: More Emphasis on on Compensation Need

  7. Marital Debts I. Definitions: MD: Debt directly traceable to acquisition of marital property Roberts (and some other jurisdictions): debt acquired during the marriage II. Court’s Authority Roberts (and some other jurisdictions): allocate marital debt between the spouses

  8. MD: If debt deemed “marital” court cannot “distribute” or allocate between spouses but relevant for either: 1) Reducing value of marital asset, and 2) Determining “economic circumstances of party” for purposes of monetary award or alimony

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