Articles Posted in Division of Property

In cases of divorce where businesses are among the spouses’ marital property, the issues can be very intricate. A value must be established for the business (just as it must be for every other marital asset), and this often requires the services of an accounting and business valuation expert. In order to achieve your fullest and fairest outcome in your divorce, it may often be worth your while to retain your own expert witness to perform a valuation of the business. Whether it is expert witness evidence, document evidence or testimony, when it comes to amassing and presenting the evidence you need for a fair result in your divorce case, be sure to reach out to a knowledgeable Maryland family law attorney.

L.H. and K.K.’s divorce was a case that centered around asset division and a business as a marital asset. The pair married in the fall of 1997. They separated 15 years later and their divorce became final in 2016. With regard to the division of assets, the court concluded that a tree service company owned by the wife was a marital asset. The court ordered that the wife keep the business, but that the husband should receive a monetary award for his portion of the marital asset.

In order to make an equitable division and set a proper amount for the award to the husband, the court needed to know the business’s worth. The husband retained an expert to assess the value of the business. (The wife hired an accountant to serve as her expert, as well.)

Back in the 1990s, a famous politician once responded to a question under oath by noting that “it depends on what the meaning of ‘is’ is.” While that answer might be puzzling to some, the reality is that, in the law, sometimes outcomes hinge upon small phrases or even single words, and the very precise definition of those terms. The outcome of a Florida case not too long ago hinged upon what the definition of a “sale” was. Recently, here in Maryland, the outcome of one ex-wife’s case alleging her ex-husband violated the couple’s marital settlement agreement rested squarely upon two things:  whether a thing qualified as an “asset” and whether that asset had an established, non-speculative value. All of these very nuanced details had the potential to have major consequences, and they highlight why it is so important to have skilled Maryland divorce counsel on your side.The couple, R.G. and S.G., began divorce proceedings in 2012 after 25 years of marriage. Seven months after the wife filed her divorce petition, the husband had a dream. That dream was the origin of a groundbreaking invention – a flossing toothbrush. The husband consulted one of his former patients, a businessman, about the invention, but he did not consult a patent attorney right away. Allegedly, the husband was trying to avoid leaving a “trail” that could provide the wife with an opportunity to claim the invention as a marital asset.

The couple entered into a mediated marital settlement agreement on Nov. 18, 2013. Sixteen days later, the husband contacted a patent attorney. In late January 2014, the divorce became final. A week later, the husband filed a provisional patent application for his toothbrush invention. The following November, the wife brought the husband back into court, asserting that he violated the settlement agreement when he failed to disclose the idea for the invention. Specifically, the wife alleged that the husband violated the “Disclosure” paragraph, which required that each spouse disclose all of the assets in the litigation. An improper non-disclosure, according to the agreement, meant that the injured spouse would receive 50% of the value of the undisclosed asset.

The question in this case was, what is an asset? When does a thing become an asset, and even if it was an asset, was the husband’s non-disclosure a violation of the agreement? The husband argued that the idea for the invention was not an asset and had no value as of the date that the spouses signed the settlement agreement.

With modern technology comes modern problems. That can be true in divorce as in other legal areas. One aspect of this is the very contemporary issue of electronic/digital assets. Digital assets can be complicated, as one person’s electronic files may be housed on a computer, hard drive or other storage device that belongs to another. Because these digital files may be things like emails, photos or videos with high sentimental value, those that are potentially embarrassing or harmful, or digital documents with important personal or financial information, resolving the distribution of these assets in a divorce is very important. To make sure that all of your assets, both electronic and physical, are distributed properly, be sure you have an experienced Maryland family law attorney on your side.

A recent case from Anne Arundel County was an example of this type of dispute. In the divorce, the husband agreed that he would return all of the wife’s computer files. This included the email archives from several email accounts.

The husband did not return all the files, however. The wife went back to court, this time seeking an order declaring the husband in contempt for his failure to deliver the files. The husband declared that he had deleted many of the files “in a fit of rage” a year before the spouses established the agreement for delivery of the emails. The wife then asked to review the husband’s hard drives. He asserted that the hard drives were damaged in his move out of the marital home and that he had thrown them away.

Distributing marital property can be one of the most complex elements of any divorce, especially one in which minor children are not involved. Sometimes, in order to achieve a genuinely equitable outcome, it may be necessary for a trial judge to order one spouse to make a monetary payment to the other. There are certain rules that govern monetary awards, though, and if they are not followed, the spouse ordered to pay may be entitled to get the order thrown out. All of these concepts and litigation strategies highlight how having an experienced Maryland property division attorney can provide a substantial benefit to you in your divorce case.

The divorce of Samuel and Joyce, a couple who separated after nearly 30 years of marriage, was an example of a monetary award case that ended in a successful appeal. In dividing the couple’s assets, the court concluded that, with all of the assets distributed, the husband owed the wife a monetary award of $54,000. A monetary award is something that may be ordered in some Maryland divorce cases when the distribution of assets between the spouses yields an outcome that is not entirely equitable. Requiring one spouse to pay the other a certain sum of money thereby “evens the scales” and achieves the equitable outcome required by the law.

In order to order a monetary award, the trial judge has to do several things and consider several factors. Maryland has created a three-step process to be used to determine if a monetary award is appropriate. First, the judge must divide assets into the categories of marital and non-marital. Second, the judge must assess the value of all of the assets that are determined to be marital. Third, the court must decide if dividing the assets “according to title” would be unfair to one spouse.

Most areas of the law, including family law, are evolving and changing constantly, to one degree or another. Ensuring that you give yourself a good chance of success means working with a knowledgeable Maryland divorce attorney who is up-to-date on all of the new changes in the law. These changes can occur through a variety of means, whether it is a new ruling from the Maryland Court of Appeals, a new law enacted by the legislature, or, as was the case in one couple’s military pension dispute, a recent U.S. Supreme Court decision that effectively upturned several decades of Maryland caselaw.

The spouses in the case, Walter and Verdena, were married from 1972 to 2004. During the marriage, the husband served in the Army National Guard from 1985 to 1987. (He previously served before the marriage from 1969 to 1971.) During his four years in the National Guard, the husband suffered three injuries. The husband retired from the National Guard in 1998 and filed for retirement at that time.

The couple’s 2004 divorce judgment stated that the wife was to receive one-third of the marital portion of the husband’s military pension benefits. In 2009, though, the husband sought a re-evaluation of his disability status. The government increased the husband’s disability rating, which meant that he was entitled to receive 30 percent of his compensation as disability benefits, instead of the previous 10 percent.

When you go to court in your divorce case, you may think that the key in your case is your factual proof, whether it is proof related to the value or nature of your spouse’s and your assets, the amount of income your spouse and you make (for the purposes of alimony or child support), or how the court should adjudicate child custody and visitation. But there is much more to most cases, including complying with the procedural rules related to how you get your factual evidence before the court. Knowing how to submit evidence in a compliant manner, as well as knowing how to respond when your spouse doesn’t follow the rules, can be as important a part of your case as the facts themselves.

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Trials and court hearings, in some ways, can be like sporting competitions. Both litigation and sports have their own sets of rules. Some of these rules may seem excessively technical and unnecessary, but they are the rules, and you overlook them at your peril. For example, the rules of civil cases say that generally, if you want the judge to order a particular outcome, you must expressly ask for it in your court pleading documents (meaning your complaint if you are the petitioner or your answer or counter-complaint if you are the respondent). In the case of one Maryland husband, his failure to follow this rule cost him the opportunity to obtain his part of the marital portion of his wife’s retirement benefits, according to a Court of Special Appeals decision.

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