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Commingled Assets, Burdens of Proof, and Equitable Distribution in Divorce Cases in Maryland

When two people marry in Maryland, especially if they marry later in life, they may bring multiple assets into the marriage, including bank accounts, retirement accounts, stocks, and more. Those assets may start out as non-marital but, if you and your spouse mix marital funds with a non-marital account’s funds, that mixing may change how the law views that asset, and may entitle you to a more favorable distribution of assets. Whether you are seeking or opposing a finding that an asset is non-marital in your divorce, it pays to have an experienced Maryland divorce attorney on your side to get the fair resolution you deserve.

A.S. and T.R. were a couple with these kinds of assets. The pair married in 2006 then separated a decade later. The wife had an individual retirement account that, at the time of the couple’s divorce trial, had a balance of $86,453. In the trial court’s final judgment of divorce, the judge found that the IRA’s funds were almost entirely non-marital.

The husband appealed successfully. A key reason for that related to the way the trial court erred in analyzing the couple’s marital and non-marital assets.

When it came to the wife’s IRA, the trial court ruled that $8,968 of the $86,453 was marital property. That figure represented the amount the wife withdrew from two other IRAs purchased during the marriage and deposited into the IRA in dispute. The remainder of the IRA’s funds, $77,485, was the wife’s non-marital property, according to the court. In making that decision, the trial judge stated that the husband had fallen short of proving that the $77,485 sum was marital in nature.

As the appeals court noted in reversing this ruling, that is not the way that Maryland law works. It was undisputed that the two IRAs from which the wife withdrew the $8,968 were marital assets. By putting those marital funds into the IRA in dispute, that meant the IRA’s balance represented commingled funds. (Commingling means mixing marital and non-marital funds.)

The Spouse Asserting Non-Marital Status Has the Burden of Proof

Maryland law says that, when a spouse seeks a court ruling declaring an asset with commingled funds to be non-marital property, he/she bears the burden of proving that the asset is non-marital in nature. In other words, the wife had the obligation to demonstrate that the IRA funds were non-marital, as opposed to the husband bearing the burden to prove that the funds were marital, as the trial judge incorrectly required.

It is also important to recognize that, if you are arguing that disputed funds are marital, the law starts out on your side. Maryland law very strongly favors finding assets in a divorce to be marital, not non-marital. Maryland law has been clear for decades that “any property acquired during the marriage that cannot be directly traced to a non-marital source is marital property.”

Whether your position in a divorce involves arguing that a disputed asset is marital or is your own non-marital property, you need a skilled advocate who knows how to provide the court the proof you need for success. Rely on the knowledgeable family law attorneys at Anthony A. Fatemi, LLC to provide you that sort of powerful advocacy to get you the outcome you seek. To learn more about how we can assist you, contact us at 301-519-2801 or via our online form.

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